Americans love big cars, air conditioning, and running lights and televisions when not in the same room.
Cheap energy encourages this behavior. Those who have visited Europe know that gasoline is much more expensive there because of higher taxes. As a result, cars are smaller and more fuel-efficient. Higher electricity prices also prompt users to turn off lights and use less to save money. Devices in many rooms turn off lights when no one is present.
We’re headed that way. The main reason is not government intervention, but nature and the market. Oil companies are not finding enough new crude to replace reserves at the same time the middle class is exploding in developing nations. Wealthier people eat more meat, which requires more energy, and are driving up demand for cars. General Motors sold more cars and trucks in China last year than it did in the U.S. for the first time in the company’s history.
So the question is not if but when Americans will have to change their behavior – and start paying more for energy.
The new reality does not mean we should adopt any and all “alternative energy” projects, however. Gov. Martin O’Malley’s plan to subsidize offshore wind is a case in point.
Under his proposal ratepayers could see a surcharge from about 92 cents to $9 each month on their electricity bills (based on different reports) to build an offshore wind farm projected to supply only 3 percent of the state’s energy. The money taken from consumers would be transferred to developers of the $1.5 billion project.
One of the potential developers is Michael Enright, O’Malley’s former chief of staff. It makes the situation not unlike how politicians in Baltimore city continually transfer residents’ wealth to a few politically connected people without generating any new jobs or tax revenue in the process.
Political connections aside, where is the logic in forcing taxpayers to subsidize a deal that affects such a tiny slice of the state’s energy use? Imagine what it would cost to subsidize the other 97 percent of energy Marylanders will use.
It also locks in payments to developers for two decades regardless of whether or not the project achieves its goals.
O’Malley says that if legislation (SB 861) supporting offshore wind does not pass, the state will not meet his goal of deriving 20 percent of electricity from renewable sources by 2022. While it is a worthy goal to wean us from fossil fuels, is this legislation about making O’Malley’s wishes come true or benefiting energy consumers in Maryland?
U.S. Rep. Roscoe Bartlett, R-6th, has long advocated a “Manhattan Project” to develop alternative energy sources. As he says, no other means will help us to break our oil addiction.
But he is skeptical of this project. “I wouldn’t want the enthusiasm and support for renewable energy and energy efficiency projects by Marylanders to be sapped by unaffordably high costs for electricity,” he said.
At a time when the state cannot balance its budget without borrowing money, taxpayers should not be forced to subsidize a project with so little impact and such a huge price tag.
Marta Mossburg is a senior fellow at the Maryland Public Policy Institute. She lives in Baltimore. (firstname.lastname@example.org)
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