Opinion: Energy costs decrease when government gets out of the way

By Commissioner Wayne Christian, Railroad Commission of Texas on 12/16/2020
Commissioner Wayne Christian, Railroad Commission of Texas
Commissioner Wayne Christian, Railroad Commission of Texas

It looks like the mainstream media have finally realized that government intervention in energy markets impacts the cost of energy for consumers. In a recent article in the Houston Chronicle, discussing legislation that would add a 1-cent tax per kilowatt hour (equal to leaving a light bulb on overnight) to energy generated from specific energy sources, including wind, solar and coal—but not natural gas—the author stated, “power bills likely would rise next year for Texas consumers,” as the tax would be passed on.1 

I hope this concern for consumers will continue in the paper’s coverage of pending legislation, like the Green New Deal and bans on hydraulic fracturing. 

Hydraulic fracturing. According to a study published by the U.S. Chamber of Commerce, Sen. Bernie Sanders' (Dem – Vt.) fracking ban proposed earlier this year would kill 3.2 million jobs and cost Texas $1.5 trillion in GDP between 2021 and 2025.2 A recent report by the White House Council of Economic Advisors estimated that fracking saves American families $2,500/year on gasoline and electricity bills.3

Renewables’ differential. I am glad that the mainstream media are providing coverage that is not one-sided, ensuring a level playing field in energy markets. Maybe they can investigate the massive differential, in terms of taxpayer subsidies, received by different forms of energy. When looking at federal taxpayer subsidies per unit of electricity generated between 2010 and 2019, oil and natural gas received 39 cents for every $82.46 that solar received, and every $18.86 that wind received.4

Maybe they can keep their investigation local, and only research corporate welfare from the state. In 2005, CREZ (Competitive Renewable Energy Zones) transmission lines were built at a cost of more than $7 billion, for the sole purpose of providing transmission for wind and solar generation. This cost was passed along to consumers on their monthly electricity bills. According to the Comptroller of Texas, Chapter 313 agreements (limits the appraised values of properties of large businesses, for purposes of school district property taxes) have cost local taxpayers $1.6 billion on wind projects, alone, through 2016.5

Uneven coverage continues. Unfortunately, I don’t foresee these types of write-ups showing up in any major newspaper anytime soon. No, they will continue to report on groups who advocate for anything that moves us closer to eliminating the use of oil and natural gas. 

Their stories, which rely on agenda-driven reports, will rail against the carve-out for natural gas in the aforementioned legislation as unfair, but they fail to mention that the government currently taxes the land that natural gas is produced from (property taxes), as well as the extraction of natural gas from the ground (severance taxes). The government also taxes the profits of natural gas companies (franchise and corporate taxes), along with hundreds of other taxes, fees and surcharges, all of which are eventually paid by consumers of natural gas (i.e., all of us).

It is a shame, too, because if their premise was an even playing field for all forms of energy, to decrease costs to consumers, I think that this is something the majority of Texans could get behind.

REFERENCES

  1. https://www.houstonchronicle.com/business/energy/article/Texas-bill-would-tax-wind-solar-generation-but-15719128.php
  2. https://www.worldoil.com/news/2019/12/20/us-chamber-of-commerce-says-proposed-fracing-ban-puts-texas-economy-at-risk
  3. https://www.whitehouse.gov/wp-content/uploads/2019/10/The-Value-of-U.S.-Energy-Innovation-and-Policies-Supporting-the-Shale-Revolution.pdf
  4. https://lifepowered.org/wp-content/uploads/2020/07/2020-04-RR-Bennett-LP-Federal-Energy-Subsidies-2.pdf
  5. https://www.mrt.com/opinion/article/Commentary-It-s-time-to-end-tax-abatements-for-13239702.php

 

 

 

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