Renewable Energy and Energy Conservation Tax Act of 2008
Tuesday, February 19, 2008
By: Tom Schatz

U.S. House of Representatives
Washington, DC  20515

Dear Representative,

            The House Leadership has introduced H.R. 5351, the Renewable Energy and Energy Conservation Tax Act of 2008.  This legislation once again puts Congress in the role of picking winners and losers in energy policy.  H.R. 5351 raises taxes on current energy companies by $18 billion and transfers the funds to energy sources such as wind, solar, and biofuels in the form of tax credits and bonds.

            The tax increases included in H.R. 5351 will destabilize the domestic oil and gas markets with the resulting cost increases passed along to consumers.  With Americans already experiencing high prices at the gas pump and increased utility bills, it makes no sense to deliberately raise costs on the nation’s most reliable energy sources.  Furthermore, increased taxes on the nation’s energy companies will stifle their ability to conduct research and development and discourage investment in refining capacity.  Higher taxes will cause a loss of jobs in the energy industry, hurting the 6 million Americans that are employed by the energy companies, approximately 3.5 percent of total full and part-time jobs in the United States.
 
            Punishing oil and gas companies by raising taxes is an old, failed approach to energy “independence.”  A similar initiative, the “windfall” profit tax, was placed on oil and gas companies in the 1980s.  The end result was less domestic energy and a greater dependency on foreign sources for our energy needs.  In addition, according to a study conducted by noted economist and former Clinton official, Robert Shapiro, 41 percent of energy shares are held in pension and retirement accounts of average Americans, 30 percent in mutual funds.  These investors will not be pleased to see their portfolios fall in value.

             More scientific studies are showing that ethanol, particularly corn ethanol, is not the panacea to solve our energy woes.  Two studies from the February 8 Science magazine point out that converting crops, such as corn, sugarcane, and palm oil, into fuel is causing food shortages and destroying forests.  For those concerned about global warming, scientists are finding that some manufacturing of biofuels emits more CO2 than gasoline.  Citizens around the world are beginning to see the unintended consequences of politicians making decisions about energy policy and use.

            Congress needs to permit more domestic oil production such as drilling in the Arctic National Wildlife Refuge and off the coasts, while allowing more nuclear power facilities to be built in order to create more competition in the energy markets.  Allowing markets to work will keep prices down and help create alternative energy sources.  All votes on H.R. 5351 will be among those considered for CCAGW’s 2008 Congressional Ratings.

Sincerely,