[Editor Note: Tomorrow’s post,”A Free Market Energy Vision,” explains the philosophy behind the Institute for Energy Research/American Energy Alliance.]

The New York Times is upset with “Big Oil,” including the advocacy group American Energy Alliance (AEA). This is evident in their Saturday opinion-page editorial, Big Oil’s Bogus Campaign, subtitled “Industry spends heavily to preserve tax breaks and blame Mr. Obama for rising gas prices.”

What is the philosophy behind AEA, what are the Times’s complaints, and what is a free-market response?

American Energy Alliance

The American Energy Alliance is the C4 (advocacy) arm of the C3 (educational) Institute for Energy Research. I am founder and CEO of IER.

AEA’s “About” section on its website reads as follows:

Founded in May, 2008, The American Energy Alliance (“AEA”) is a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies.

The Wall Street Journal‘s Marketplace headline of March 5th said much: “Natural Gas to Power Pickups.” The piece did not mention the Nat Gas Act or other special government favors, just an effort by U.S. automakers to get natural-gas-fueled trucks into the mix given the large BTU disparity between gas and gasoline/diesel prices.

Reporter Jeff Bennett described a “growing wave” of interest in natural gas trucks:

On Tuesday, Chrysler Group LLC plans to disclose it will build the first production-line pickup truck powered by natural gas. The auto maker is promising to build at least 2,000 heavy-duty Ram bi-fuel trucks that run on a combination of compressed natural gas and gasoline starting in June.

General Motors Co. on Monday plans to disclose it will offer bi-fuel Chevrolet Silverado and GMC Sierra 2500 pickups in the fourth quarter.

In the closing act, we have the protagonist foisting on the world a set of insights, which we proceeded to dissect in Act II and Act III. Is there a happy ending to our play? Alas, it is a tragedy.

The Bradley Project, which can be overviewed at his website Political Capitalism,  brilliantly narrates the ethos of what he calls “Heroic Capitalism” in contrast with “Political Capitalism.” As applied to energy policy, Bradley is largely correct in his insights that the energy industry has become so mixed up with the mixed economy that corporate leaders legitimately fear that capitalist advocacy will be punished.

As an out-of-the-closet energy policy market advocate, I have often been privately besieged to take public positions that corporations were loath to take publicly because of their fear of regulatory retribution.…

“The forcings that drive long-term climate change are not known with an accuracy sufficient to define future climate change.”

– James Hansen, “Climate Forcings in the Industrial Era,” Proceedings of the National Academy of Sciences, October 1998, p. 12753.

“In view of the immense power of natural weather and climate fluctuations and the great buffering capacity of the Earth, especially the ocean, it is easy to be skeptical about whether small anthropogenic changes of atmospheric composition can have important practical impacts.”

– James Hansen et al., “How Sensitive Is the World’s Climate?,” National Geographic Research & Exploration, 9(2): 1993, p. 157.

“Climate is always changing. Climate would fluctuate without any change of climate forcings. The chaotic aspect of climate is an innate characteristic of the coupled fundamental equations describing climate system dynamics.”