No. 1 • September 2008 Incoherent at Best: The Energy Policies of Barack Obama and John McCain By Kenneth P. Green and Abigail Haddad Energy policy is a subject at the very center of this year’s presidential election. But if the candidates and their brain trusts are spending significant amounts of time thinking about energy policy, you would not know it from their rhetoric or their websites. While both candidates showed signs of having coherent energy policies at the beginning of their campaigns, the pandering as Election Day nears has produced incoherent platforms that signify a deep lack of seriousness. An examination of John McCain’s and Barack McCain changed the subtitle of his plan to “An Obama’s energy policies begins with the big idea All of the Above Energy Solution,” further blur- of “energy independence.” Although it is eco- ring the meaning of the entire idea and tossing nomically undesirable, both candidates have economic prioritization completely out the window. embraced it. Examining what they propose, one McCain has portrayed American reliance on could invoke Inigo Montoya, the great swords- foreign oil as an economic, foreign policy, and man in The Princess Bride who says, “You keep environmental evil. His plan emphasizes how for- using that word. I do not think it means what eign oil imports significantly increase the trade you think it means.” deficit, calling U.S. energy imports “the largest transfer of wealth in the history of mankind.”4 McCain on Energy Independence. John McCain In a speech, the senator said that dependence has made energy independence the focal point on oil imports weakens the United States and of his energy policy, calling his energy plan “The declared that by expanding domestic energy pro- Lexington Project,” after the site of the first battle duction, “we will break the power of OPEC over of the Revolutionary War, and subtitling it “A the United States. And never again will we leave Comprehensive Plan to Break Our Dependence our vital interests at the mercy of any foreign on Foreign Oil.”1 In June, he proposed increasing power.”5 In the same speech, he described energy domestic drilling and building more power plants security as a solution to global warming because in the United States as ways to defund state spon- it would reduce greenhouse gas (GHG) emissions sors of terrorism and bring down energy prices.2 from fossil fuels. He combines these proposals with classic protec- McCain intends to bring about energy inde- tionist rhetoric: his campaign materials state that pendence through increased domestic drilling we should expand domestic drilling because we and investment in various other forms of energy. “should keep more of our dollars here in the U.S. He advocates spending $2 billion yearly on [and] lessen our foreign dependency.”3 In August, investments in clean coal research, development, Energy and Environment Outlook and deployment; he also calls for building forty- Kenneth P. Green ([email protected]) is a resident scholar at AEI. Abigail Haddad ([email protected]) is a five new nuclear power plants by 2030. In his research assistant at AEI. speeches and campaign materials, McCain has 1150 Seventeenth Street, N.W., Washington, D.C. 20036 202.862.5800 www.aei.org - 2 - not directly said that increased domestic energy produc- including mandating that oil companies drill on lands they tion will bring down prices, but he has implied that his currently own but do not use, leasing more of the National policies are solutions to rising prices: Petroleum Reserve in Alaska for oil and gas production, and recovering more from oil shale formations—some of Opponents of domestic production cling to their the most GHG-intensive fossil fuels—across the country. position even as the price of foreign oil has doubled and doubled again. And we’re left to wonder Obama’s case for and plan to achieve energy what it will take to shake their faith in this dogma of dependence on foreign oil. As for me, my con- independence differs in two key ways from victions place a priority on the well-being of people who cannot afford these ever-rising prices.6 McCain’s. First, Obama relies less on protectionist rhetoric and fear-mongering. Second, Obama “Energy independence” and “energy security” are not meaningful concepts as McCain uses them: energy prices proposes a laundry list of government programs are set on the world market, so even if the United States as solutions to energy dependence. severely curtailed its import of foreign oil, it would not guarantee lower prices, and even if America increased its domestic production, the oil produced would sell at the Obama’s case for and plan to achieve energy independ- world price to any who choose to pay it. A trade “deficit” ence, however, differs in two key ways from McCain’s. in a good that you can buy elsewhere for less than you First, Obama relies less on protectionist rhetoric and fear- can manufacture it is generally not considered problem- mongering. He does not say that importing oil makes atic economically. Without the nationalistic spin, it America weak, nor does he say that foreigners manipu- would be praised as free trade and specialization of labor late oil markets to the detriment of Americans. Second, and natural resource production. Obama proposes a laundry list of government programs as solutions to energy dependence, emphasizing expansion Obama on Energy Independence. Barack Obama holds of clean energy investment, particularly by the govern- similar opinions about the need for energy independence. ment, as a jobs creation program. Through costly invest- In a recent speech, he hit the same notes as his oppo- ment ($150 billion over the next ten years) in cleaner nent, condemning America’s addiction to foreign oil: energy, Obama promises to create 5 million new “green” jobs—an economic fallacy debunked well over one hun- Without a doubt, this addiction is one of the most dred years ago by Claude Frédéric Bastiat, who explained dangerous and urgent threats this nation has ever that government projects do not “create” jobs on net; faced—from the gas prices that are wiping out your they simply kill some jobs while substituting others, paychecks and straining businesses to the jobs that invariably to the detriment of social welfare.9 Obama are disappearing from this state; from the instability also promised to provide job counseling and placement and terror bred in the Middle East to the rising in the green energy field for war veterans and set up an oceans and record drought and spreading famine “energy-focused youth jobs program for disconnected that could engulf our planet.7 and disadvantaged youth.”10 In Obama’s energy plan, even more than McCain’s, the need for energy security Like McCain, Obama implies that if we produce a provides an opportunity for various new and expensive higher percentage of oil domestically, or buy it from government programs. friendly and democratic countries, we would be more insulated from the effects of chaos in the Middle East Renewable Energy and less responsible for funding terror. He also frames energy security as a solution to global warming, noting Prior to the presidential primaries, there was a fairly that warming caused by fossil fuels is “melting our gla- crisp distinction between McCain and Obama on ciers and setting off dangerous weather patterns as we renewable energy forms such as wind, solar, geothermal, speak.”8 But in the very same speech, he called for and biofuels. McCain was dubious about biofuels, par- expanding domestic operations to extract fossil fuels, ticularly ethanol, and was primarily focused on the - 3 - expansion of nuclear power (which actually is a renew- McCain also made a strange statement recently able but is not generally presented as one). Obama, regarding energy that did not appear to fit in his plat- while dancing nimbly around the issue of expanding form. In July, he was asked about the feasibility of tran- conventional power generation such as nuclear, coal, sitioning to 100 percent renewable energy to meet U.S. and natural gas, is gung-ho on biofuels, wind and solar electricity needs, as former vice president Al Gore has power, and the like. But as the primary season and then advocated. In response, McCain told reporters that “if the electoral campaign wore on, the candidates con- the vice president says it’s doable, I believe it’s doable.” verged in a mushy and somewhat incoherent middle. Obama on Renewables. Obama is enthusiastic about McCain on Renewables. During the past few months, renewables, and his platform includes several policies McCain has been lukewarm on renewable energy. He to support them. His plan, dubbed “New Energy for gave a speech in May at a wind power production site America,” would mandate that 10 percent of electricity in which he endorsed cap-and-trade and spoke about come from renewable sources (apparently not including the need to replace fossil fuels with cleaner sources of hydroelectric power) by 2012 and 25 percent by 2025.13 energy, but he was short on specifics. He spoke against (In 2006, about 2.4 percent of electricity was generated “special favors, subsidies, and tax breaks”; for “send[ing] from these types of sources,14 and even that may be a the special interests on their way”; and in praise of free high estimate because the figure includes burning wood, markets. Later, though, he said that “[f]or the market to which would presumably not be included in an Obama do more, government must do more by opening new administration’s arithmetic.) In order to reach this, the paths of invention and ingenuity.