Energy Bill
By Kudlow Money Politic$
So now we have an energy bill, signed into law by President Bush today.
Will it help us produce more energy at affordable prices? I actually think it will. Despite the ever-present government spending subsidies, which I do not like, there are some big pluses.
FERC, the federal energy regulatory commission, has the power to override state and local not-in-my-backyard objections to nuclear, liquid gas, refining, and clean coal plants. Though not absolute, this is a big plus.
Repeal of the 1930's Public Utility Act will bring a lot of new capital to improve utility delivery and infrastructure.
I can't stand the ethanol subsidy, which takes more energy inputs to produce ethanol than it will have outputs, but in the end, I agree with Daniel Yergin about the importance of market forces. With new deregulation, high market prices and profits will attract the necessary new capital for new energy production among a more diverse portfolio of energy sources.
It may take five years or more for the payoff, but those market forces are already beginning to work. Let's hope the auto industry moves forward with its own diverse hybrid silicon-chip-based quest for more efficient car power.
So that's my take. I want to hear yours. Email me at kudlow@cnbc.com and tell me whether you approve or disapprove of the energy bill and why. Thoughtful questions and comments will be read on the air. |
