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Swing State Energy Policy

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Programs: Agriculture
August 13, 2004

In a speech in the heart of corn country last week, Senator John Kerry introduced his $30 billion plan to solve our nation's energy woes, which includes increasing subsidies to the coal industry and to ethanol producers. Seemingly to create a dramatic political moment, the speech was given in Missouri, a state Vice-President Gore lost by 3%, on a farm that grows corn for ethanol production.

All political pundits agree that this presidential election has come down to about 16 battleground states. So, both the President and Senator Kerry are looking for ways to woo (read: pay off) the voters from these zip codes. Just like Senator Kerry's energy plan is written to win the coal and corn belts, the President is in Oregon today to promise $15 million for the Columbia River Deepening project, a wasteful water boondoggle that the Corps of Engineers has been pushing for years.

Hey, we understand how the system works. Both candidates for president have to promise things they do not like. To paraphrase the popular slogan: don't hate the political player, hate the political game. There is no better example of pandering to constituencies than ethanol subsidies.

Ethanol subsidies started in the 1970s as an attempt to encourage alternative and renewable fuels and to help wean America off Middle Eastern oil. Today, ethanol has failed to make major inroads into the motor fuels market and is not even close to becoming cost-effective, but it costs taxpayers hundreds of millions of dollars a year all the same. Ethanol is now perpetually fueled by parochial interests in corn producing states who have become addicts of the massive corn subsidy program.

In response, Senator Kerry proposes doubling the use of ethanol in the coming decade - requiring 5 billion gallons of ethanol in the nation's motor fuel supply by 2012. Current presidential candidates must pass the ethanol litmus test or fear offending voters from nine states, including the battleground states of Missouri, Illinois, and Iowa. Bill Bradley and John McCain, the last two candidates with anti-ethanol positions, were KO'd because of it. If ethanol were produced in Maine, where the outcome of the election is not in doubt, ethanol subsidies would not have such a long parade of political support.

Senator Kerry also proposes $10 billion for "Clean Coal." Like ethanol, the Clean Coal Program has been a failure and a complete waste of money. After 18 years and billions of dollars, the Clean Coal Program has proven ineffective. Taxpayers should not be forced to shovel their hard-earned money into a coal-fueled furnace of waste. Clean Coal technology is about lining King Coal's pockets and about winning votes in West Virginia, Ohio, and Pennsylvania, all key battleground states. It has very little to do with national energy policy or reducing our dependence on foreign energy sources.

On that note, Senator Kerry should also stay away from the political sound bite, "energy independence." Politicians from both parties echo that phrase mindlessly, as if simply repeating endlessly will make it come true. Since the United States burns about 11 million barrels of foreign oil a day and consumes a quarter of the total world supply, while sitting on just 3% of the proven reserves, independence is not going to happen until cold crude is replaced with something else.

Senator Kerry's plan has several things in common with the President's own policy and with Congress' recent bills. Guess who wants $10 billion to help make today's coal plants cleaner, grow more corn in Iowa, and give breaks for consumers to buy fuel efficient cars built by Detroit? All of them do. And surprise, Michigan is a swing state!

You could make the argument that in total the Kerry energy plan is more balanced than anything we have seen so far. Indeed, it might have been impossible to create a plan worse than the $95 billion pork party pushed by the President and Congress last year. But Senator Kerry's plan still contains a hefty portion of election year goodies designed to increase his chances of being elected, and none of them are good policy for getting us on the path to energy independence.

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