The Bare Knuckled Pundit
06-24-2008, 03:25 PM
As noted yesterday in Part I, this initiative and the various proposals are designed to address America’s long term energy needs.
While Part I was derided and criticized by Liberals, I fully anticipate Part II will likewise be lambasted by Conservatives. The bottom line, however, is for the good of us all, regardless of our political persuasions, our views on the environment and oil corporations; we must quit talking past each other and begin talking to each other. The energy crisis affects us all; Democrats, Republicans and Independents alike. I’ll not be so Pollyannaish as to lament why can’t we all just get along, but in the end that is precisely what is going to be needed if we are to overcome this challenge to our nation, our economic security and our way of life.
And with no further adieu, Part II.
-Increased federal gas taxes: Incremental gas tax increases should be enacted to A) gradually diminish demand and encourage the addition of more fuel efficient and flex fuel vehicles to the national fleet, B) provide funding for our dire infrastructure needs and C) underwrite tax incentives in other areas of the energy initiative.
-Accelerated increases in Corporate Average Fuel Economy (CAFÉ) standards: The deadline for increasing CAFÉ standards should be accelerated to three to five years from the passage of the comprehensive energy initiative. While automakers would still be free to produce vehicles that do not meet the new CAFÉ standards, they would pay a surcharge on each non-industrial unit that does not meet the new standards. With those surcharges naturally passed on to the customer, the end result will steer consumers to purchase more fuel efficient models.
-Consumer tax credits for hybrid vehicles: Tax credits that allow consumers to recoup the annual cost of the maintenance of hybrid vehicles as well as a third of the vehicle’s purchase price over a five year period would be used to accelerate the move to a more diversified and efficient national auto fleet.
-Hybrid infrastructure expansion: If hybrid vehicles are to become a significant part of the nation’s auto fleet, they must have an infrastructure network that supports their use. Gas station owners would be allowed to write off the expense of adding equipment that supports hybrids over a three year period.
-Increased regulation and oversight of energy futures markets: With speculation and excess global liquidity a major force in the spring run up of oil prices, it is clear that enhanced regulation and oversight is in order. As part of that, futures margins should be increased from 5 percent of a contract’s bid price to 50 percent which is the standard for stock options. By forcing players in the market to seriously insure their positions and risk considerable amounts of capital it will encourage them to act more responsibly and resist taking purely speculative action.
In addition to this, enhanced regulation and oversight will provide an active and aggressive defense against market manipulation and collusion.
-Creation of the American Energy Innovation Awards program: Picking and choosing who the winners and losers are in the marketplace and who is most worthy of research funding often becomes mired in partisan and geographic politics. In order to minimize this negative force, the American Energy Innovation Awards program would create multi-million dollar tax-free prizes that would be awarded to firms, institutions and individuals that design, develop and perfect commercially exploitable products that enhance America’s energy use and efficiency. Based on the X-Prize model of the commercial space industry, the AEIA would provide concrete, uncomplicated standards and incentives for private development of cutting edge energy-related technologies, services and goods.
For example, a tax-free prize of 50 million dollars could be offered for the first mass producible battery-powered mid-size vehicle that can travel 500 miles on a single overnight charge. Similar awards could be granted for sustained commercial tidal generated electrical systems and hybrid heavy industrial vehicles like tractor trailers and construction equipment.
In addition to the cash awards element, the AEIA would also establish a scholarship fund that would encourage the study of petroleum engineering, geology and energy-related sciences at both the undergraduate and graduate levels. With the ranks of these critical professionals diminishing due to retirement, the energy industry and our national security depend on an ample and well-trained pool of available talent to replace them.
-Increased funding for the Advanced Research Project Agency – Energy (ARPA-E): While the AEIA program will provide substantial incentives for independent research and development, ARPA-E is focused on the more traditional model of government funded research grants and coordination. Having produced significant developments in the past, this model should be retained with a substantial funding increase directed towards expanding the breadth and depth of its projects.
ARPA-E is the logical venue through which government works on projects such as algae biomass and other currently experimental and theoretical processes and proposals. Furthermore, it should play the primary role of serving as the intermediary between fledgling private sector ventures and governmental agencies. With the government serving as the primary client and consumer initially, such ventures would be provided the financial lift and stability necessary for expanding to greater commercial viability and long term societal adoption.
-Passage of a tariff on imported oil: In order to pay for expanded funding for ARPA-E and the AEIA, a 2 percent tariff on imported oil would be imposed. At $100 a barrel, the tariff would generate in excess of $8.7 billion a year. Should Congress and the President elect to expand the areas funded by the tariff, one of 3 percent would generate revenues in excess of $13.1 billion a year at $100 a barrel.
By imposing an oil tariff, Americans would in essence require oil producers to fund research geared towards energy efficiency and decreasing oil imports.
-Establishment of the Western Hemispheric Energy Cooperation Council: In order to encourage greater dialogue and cooperation between both producers and consumers of energy in the Western Hemisphere, the United States would propose the establishment of the Western Hemispheric Energy Cooperation Council. The WHECC would allow for greater coordination of hemispheric energy policies and would encourage members to work closely with their neighbors to maintain stability for the region’s energy supply.
One of the primary goals of the WHECC would be to orient Brazil and its burgeoning oil industry towards regional considerations and away from potentially joining OPEC. Accordingly, members of the WHECC would be granted an exemption from the tariff on imported oil.
This is by no means the Holy Grail, Ten Commandments or a silver bullet. To portray it as such would be an exercise in delusional arrogance. However, it is offered as a starting point; a platform to jump off into debate and discussion.
It is a hybrid proposal in that it incorporates market-oriented initiatives as well as expanded governmental involvement and oversight in various energy-related sectors. It increases taxes as well as loosens regulations. It provides for expansive incentives and punitive penalties. Accordingly, it is rooted not in political philosophy, but rather practicality, flexibility and comprehensiveness.
And with that, I will place it on the backstop and you may fire your slings and arrows at it as you please.
And you may ask yourself, faithful readers, where is my large automobile? Stay tuned for further updates as the crisis mounts and the stubbornly ideological sit on their hands.
Except, of course, when they’re pointing fingers at yours truly. Now there’s the love!
While Part I was derided and criticized by Liberals, I fully anticipate Part II will likewise be lambasted by Conservatives. The bottom line, however, is for the good of us all, regardless of our political persuasions, our views on the environment and oil corporations; we must quit talking past each other and begin talking to each other. The energy crisis affects us all; Democrats, Republicans and Independents alike. I’ll not be so Pollyannaish as to lament why can’t we all just get along, but in the end that is precisely what is going to be needed if we are to overcome this challenge to our nation, our economic security and our way of life.
And with no further adieu, Part II.
-Increased federal gas taxes: Incremental gas tax increases should be enacted to A) gradually diminish demand and encourage the addition of more fuel efficient and flex fuel vehicles to the national fleet, B) provide funding for our dire infrastructure needs and C) underwrite tax incentives in other areas of the energy initiative.
-Accelerated increases in Corporate Average Fuel Economy (CAFÉ) standards: The deadline for increasing CAFÉ standards should be accelerated to three to five years from the passage of the comprehensive energy initiative. While automakers would still be free to produce vehicles that do not meet the new CAFÉ standards, they would pay a surcharge on each non-industrial unit that does not meet the new standards. With those surcharges naturally passed on to the customer, the end result will steer consumers to purchase more fuel efficient models.
-Consumer tax credits for hybrid vehicles: Tax credits that allow consumers to recoup the annual cost of the maintenance of hybrid vehicles as well as a third of the vehicle’s purchase price over a five year period would be used to accelerate the move to a more diversified and efficient national auto fleet.
-Hybrid infrastructure expansion: If hybrid vehicles are to become a significant part of the nation’s auto fleet, they must have an infrastructure network that supports their use. Gas station owners would be allowed to write off the expense of adding equipment that supports hybrids over a three year period.
-Increased regulation and oversight of energy futures markets: With speculation and excess global liquidity a major force in the spring run up of oil prices, it is clear that enhanced regulation and oversight is in order. As part of that, futures margins should be increased from 5 percent of a contract’s bid price to 50 percent which is the standard for stock options. By forcing players in the market to seriously insure their positions and risk considerable amounts of capital it will encourage them to act more responsibly and resist taking purely speculative action.
In addition to this, enhanced regulation and oversight will provide an active and aggressive defense against market manipulation and collusion.
-Creation of the American Energy Innovation Awards program: Picking and choosing who the winners and losers are in the marketplace and who is most worthy of research funding often becomes mired in partisan and geographic politics. In order to minimize this negative force, the American Energy Innovation Awards program would create multi-million dollar tax-free prizes that would be awarded to firms, institutions and individuals that design, develop and perfect commercially exploitable products that enhance America’s energy use and efficiency. Based on the X-Prize model of the commercial space industry, the AEIA would provide concrete, uncomplicated standards and incentives for private development of cutting edge energy-related technologies, services and goods.
For example, a tax-free prize of 50 million dollars could be offered for the first mass producible battery-powered mid-size vehicle that can travel 500 miles on a single overnight charge. Similar awards could be granted for sustained commercial tidal generated electrical systems and hybrid heavy industrial vehicles like tractor trailers and construction equipment.
In addition to the cash awards element, the AEIA would also establish a scholarship fund that would encourage the study of petroleum engineering, geology and energy-related sciences at both the undergraduate and graduate levels. With the ranks of these critical professionals diminishing due to retirement, the energy industry and our national security depend on an ample and well-trained pool of available talent to replace them.
-Increased funding for the Advanced Research Project Agency – Energy (ARPA-E): While the AEIA program will provide substantial incentives for independent research and development, ARPA-E is focused on the more traditional model of government funded research grants and coordination. Having produced significant developments in the past, this model should be retained with a substantial funding increase directed towards expanding the breadth and depth of its projects.
ARPA-E is the logical venue through which government works on projects such as algae biomass and other currently experimental and theoretical processes and proposals. Furthermore, it should play the primary role of serving as the intermediary between fledgling private sector ventures and governmental agencies. With the government serving as the primary client and consumer initially, such ventures would be provided the financial lift and stability necessary for expanding to greater commercial viability and long term societal adoption.
-Passage of a tariff on imported oil: In order to pay for expanded funding for ARPA-E and the AEIA, a 2 percent tariff on imported oil would be imposed. At $100 a barrel, the tariff would generate in excess of $8.7 billion a year. Should Congress and the President elect to expand the areas funded by the tariff, one of 3 percent would generate revenues in excess of $13.1 billion a year at $100 a barrel.
By imposing an oil tariff, Americans would in essence require oil producers to fund research geared towards energy efficiency and decreasing oil imports.
-Establishment of the Western Hemispheric Energy Cooperation Council: In order to encourage greater dialogue and cooperation between both producers and consumers of energy in the Western Hemisphere, the United States would propose the establishment of the Western Hemispheric Energy Cooperation Council. The WHECC would allow for greater coordination of hemispheric energy policies and would encourage members to work closely with their neighbors to maintain stability for the region’s energy supply.
One of the primary goals of the WHECC would be to orient Brazil and its burgeoning oil industry towards regional considerations and away from potentially joining OPEC. Accordingly, members of the WHECC would be granted an exemption from the tariff on imported oil.
This is by no means the Holy Grail, Ten Commandments or a silver bullet. To portray it as such would be an exercise in delusional arrogance. However, it is offered as a starting point; a platform to jump off into debate and discussion.
It is a hybrid proposal in that it incorporates market-oriented initiatives as well as expanded governmental involvement and oversight in various energy-related sectors. It increases taxes as well as loosens regulations. It provides for expansive incentives and punitive penalties. Accordingly, it is rooted not in political philosophy, but rather practicality, flexibility and comprehensiveness.
And with that, I will place it on the backstop and you may fire your slings and arrows at it as you please.
And you may ask yourself, faithful readers, where is my large automobile? Stay tuned for further updates as the crisis mounts and the stubbornly ideological sit on their hands.
Except, of course, when they’re pointing fingers at yours truly. Now there’s the love!