Perry’s Energy Speech: Part I (Real Energy, Real Jobs–but what about the governor’s windpower baggage?
Texas Gov. Rick Perry is swimming upstream in his quest for the Republican nomination for President of the United States, primarily from his weak performances during several debates. To improve his odds, last Friday he gave his first policy speech, titled Energizing American Jobs and Security.
Energy is that important. And it is a breath of fresh air that Perry’s analysis and prescription is 180 degrees from President Obama’s government-knows-best approach to energy and energy/environment.
The Governor’s plan focused on four objectives that promise economic growth and numerous jobs in America. In Perry’s words:
- “First, we will open several American oil and gas fields for exploration that are currently off limits because of political considerations.”
- “It is equally important that we take a second step: eliminate activist regulations already on the books and under consideration by the Obama Administration.”
- “The third part of my plan is to reform the bureaucracy, in particular the EPA, so that it focuses on regional and cross-state issues, providing scientific research, as well as environmental analysis and cost-comparison studies to support state environmental organizations. We will return greater regulatory authority to the states to manage air and water quality rather than imposing one-size-fits-all federal rules.”
- “The fourth component of my plan is to level the competitive playing field among all energy producers. As the governor of the nation’s leading producer of wind energy, I clearly believe there is an important role for green sources of energy as a part of our generation mix. The fact is, every energy producer receives incentives and subsidies that cost taxpayers and distort the marketplace.”
He finished his address by stating that his plan is focused to “Make what Americans buy, buy what Americans make, and sell it to the world.”
I agree with these proposals. In particular, getting rid of all energy subsidies and tax incentives across the boardwill allow the market to direct the allocation of resources to energy sources that are profitable without government intervention.
Perry: Big Wind
Perry’s case for energy expansionism, however, is weakened by his past energy actions as governor and by the interventionism by other Republicans.
MasterResource has documented the role of Perry in the (artificial) Texas windpower boom:
In October 2006, Governor Perry announced $10 billion in commitments from wind developers to increase increase installed Texas wind capacity by about 7,000 MW.19 And to get it, he committed the state to a $5 billion–and now $7 billion– transmission project.
“While Perry’s been governor,” saidthe American Wind Energy Association “we’ve had a business climate that allows a generator to build, connect to the grid and sell power. Under those conditions, wind has been able to compete and bring benefits to Texas consumers, and to the environment.”
As Paul Sadler, executive director of the Wind Coalition, told the New York Timestwo months ago: “He [Perry] has been a stalwart in defense of wind energy in this state — no question about it.”
“The GOP’s Solyndra Problem”
Perry is hardly alone among Republicans, supposedly the party of free markets and small government. This was brought to light by Kimberly Strassel of the Wall Street Journal in The GOP’s Solyndra Problem, subtitled “Republicans have their own green baggage.”
Where the handouts really got rolling was at the state level. It used to be that Republican governors competed for business by lowering taxes and regulations. Then some genius worked out that it was easier to flat-out bribe companies to relocate by offering cold, hard taxpayer cash.
And with green energy all the rage, a lot of state tax dollars started flowing to Solyndra-like ventures. Mr. Perry did all this on a grand scale, convincing his legislature to create two investment funds, one being the Emerging Technology Fund, which has acted as state venture capitalist to more than a hundred firms, including green companies.
In fairness, he wasn’t alone. Indiana’s Mitch Daniels, Mississippi’s Haley Barbour, Louisiana’s Bobby Jindal—conservatives all—have happily staked their taxpayers’ dollars on green bets.
Governor Perry is a politician, not a principled free-marketeer. He stepped right into the unholy George W. Bush/Ken Lay windpower nexus and chose to expand it (and now has a transmission boondoggle on his hands).
But times have changed, and the tradeoff between pro-job real energy and bubble-job ‘green energy’ has never been starker. Part II will focus on EPA’s war on real energy in the name of the ‘precautionary principle.’
Vance Ginn earned a BBA in Economics and Accounting and minored in Political Science and Mathematics at Texas Tech University where he is completing his doctorate in economics. He recently joined the economics faculty at Sam Houston State University (Huntsville, Texas) where he teaches micro and macro economics.