New Energy Reform Act Missing Many Reforms

Won’t Reduce Oil or Gasoline Prices For Years

August 1, 2008

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Contact: Madeline Meth
Phone: 202.741.6277
Email: mmeth@americanprogress.org

Statement of Daniel J. Weiss, Senior Fellow and Director of Climate Strategy

“The New Energy Reform Act is missing many essential reforms that would reduce oil use and prices. While it includes some very valuable provisions, it will do nothing to reduce oil prices today, tomorrow, or next year. There are relatively popular measures excluded from the proposal that could do a lot more to speed the transition to a low-carbon, low-price, and high-growth energy future.

“Senators Kent Conrad (D-ND), Saxby Chambliss (R-GA), and their eight colleagues deserve credit for recognizing that it makes little sense to provide $30 billion in tax breaks and subsidies to big oil companies that just announced record profits. This reform is long overdue, and has been repeatedly blocked by a conservative minority.

“The provisions to reduce vehicle oil use are important steps forward. However, they seem to rely solely on incentives without any enforceable oil reduction targets. This package needs an enforceable oil savings plan.

“The proposal is missing several consensus policies that would reduce energy use and greenhouse gases. A renewable electricity standard has been adopted by 26 states and supported by a majority of the Senate, but blocked by conservatives.

“The Climate Security Act included a low-carbon fuel standard, but it too was blocked by a minority of senators. It should be added to the proposal.

“Another hole in this proposal is the giveaway of the oil in part of the Outer Continental Shelf and Gulf of Mexico to big oil companies. Recipients of leases under this proposal should have to send 10 percent of the oil to the Strategic Petroleum Reserve to maintain energy security.

“There are only a handful of measures that would immediately reduce oil and gasoline prices. Sell a small amount of oil from the government stockpile in the Strategic Petroleum Reserve, reign in speculators, and provide some direct rebates to middle- and low-income families using funds from the elimination of oil company tax breaks and recovering lost royalties. None of these measures is included in the New Energy Reform Act.

“Senators Conrad, Chambliss, and their colleagues get an A for effort, but their proposal is unsatisfactory and needs many improvements.”