A Free-Market Energy Blog

Bipartisan Energy Policy: Consumers, Taxpayers Beware

By Peter Grossman -- January 13, 2015

Lately, people in and out of the federal government have expressed nostalgia for the good old days of bipartisan lawmaking.  Today, we have legislative gridlock, and an ideologically polarized Congress; back then Congress got things done.

There is some truth to this, but what were the results of bipartisanship?

With respect to energy, the answer is mostly awful.

Here’s a list of some major pieces of energy legislation (and the votes) of the last 40+ years; commentary to follow:

Bill/Year Final House Vote Final Senate Vote
Emergency Petroleum Allocation Act of 1973 (EPAA) 348-46 83-3
Energy Policy and Conservation Act of 1975 (EPCA) 300-103 65-27
Crude Oil Windfall Profit Tax Act (1980) 302-107 66-31
Magnetic Fusion Energy Engineering Act of 1980 (MFEE) 365-7 Acclamation
Energy Security Act of 1980 (SFC) 317-93 78-12
Comprehensive  Energy Policy Act of 1992 (EPAct 1992) 381-37 93-3
Energy Policy Act of 2005 (EPAct 2005) 275-156 74-26
Energy Independence and Security Act of 2007 (EISA) 314-100 86-8

The table shows there was plenty of bipartisanship. But what did aisle-crossing cooperation give us?

The Emergency Petroleum Allocation Act of 1973 (Democratic Congress, Republican President) was passed in the midst of the Arab oil embargo; it added oil allocation controls to price controls—making a bad situation worse.  It also created new wrinkles to oil price controls—none of which improved what was fundamentally an impossible system. Overall, the EPAA magnified the impacts of the embargo many times over.

Republican President Gerald Ford proposed an energy bill in early 1975, which was promptly replaced by a different bill written mainly by the Democratic Congress but was signed by Ford–the Energy Policy and Conservation Act of 1975.  A key feature of this bill was a Congressional compromise on what the weighted average price of oil should be (they settled on $7.66/bbl).  The haggling over pennies per barrel by legislators who clearly had no idea what they were talking about would be comical except for the fact that it assured us of oil shortages to come.  The bill did create CAFE standards, which cost the U.S. economy an estimated $4 billion per year over simply letting the market set the price.

The Crude Oil Windfall Profit Tax Act of 1980 (Democratic Congress, President) was predicated on an ever-rising price of oil and was expected to raise over $200 billion during the ensuing decade.  Instead oil prices collapsed and by 1986, the tax take was zero. The bill was repealed—one of the few times an energy bill (no matter how foolish) has been repealed.

The Magnetic Fusion Energy Engineering Act of 1980 (Democratic Congress, President) was a Congressional directive for the creation of a working nuclear fusion electricity generating facility by 2001; it was expected to cost $20 billion.  But a few years later, it was clear that the scientific and engineering issues with fusion were decades away from solution—a Congressional action notwithstanding.

The Energy Security Act of 1980 (Democratic Congress, President) often referred to by its major component, the creation of the Synthetic Fuels Corporation (SFC), authorized spending $88 billion to derive substitutes for oil and natural gas from coal. A few billion was wasted before it became apparent that the technology was not, and would not be, commercially viable—especially in a world of low oil and natural gas prices. The act was finally defunded in the mid-1980s.

The Energy Policy Act of 1992 (Democratic Congress, Republican President) was the government’s response to the first Gulf War.  The bill took a long time to get through Congress because by the spring of 1991 it was clear that oil prices, which had spiked, were returning to lower levels. But this bill has continued to haunt us as it provided for the Production Tax Credit (PTC) for wind generated electricity, which became the vehicle for the Obama administration’s expansion of alternative generation technologies.  EPAct was also notable for the congressional limits on the water volume of new flush toilets.

The Energy Policy Act of 2005 (Republican Congress, President) was a gargantuan bill of more than 1,700 pages.  It is best remembered for the creation of the Renewable Fuel Standard (RFS), which began America’s ethanol binge. The bill also contained a loan guarantee program that became a major component of the Obama administration’s green energy crusade.

With gasoline prices rising in 2007, a Democratic Congress and a Republican president gave us a year-end gift of Energy Independence and Security Act. This bill greatly expanded the RFS, predicated on the belief that cellulosic ethanol would be commercially viable by 2012.  Given its bipartisan origins and its benefits to farmers it seems almost impossible to repeal even though the evidence shows it has been a bad idea in almost every respect.

So that’s what we’ve gotten from bipartisan energy bills.  Do we really need more of the same?


Dr. Peter Grossman, professor of economics at Butler University, is author of U.S. Energy Policy and the Pursuit of Failure. His previous posts at MasterResource can be found here.