There's a great discussion going on over at Bubblehead's site following his post on the Palin selection and I encourage all to read it. This post will focus on Obama's and McCain's energy policies, as expressed on their campaign web sites. So let's get to the specifics.
- Obama wants to enact a windfall profits tax to provide a $1000 rebate to American families. McCain has no analog to this. While I am always in favor of giving the American people more of their money back to them, I am not in favor of taking from one group and redistributing their money to others, even if I'm one of them. How about just reducing our tax burden by $1000? Inasmuch as this will remove money that would have been used for R&D or pulling oil out of the ground, or investing in new technologies, I have a newsflash - oil companies have a responsibility to their shareholders, and they'll deliver on that promise to them by keeping their net income growing - so, they will cut somewhere else to make up for that new tax. So, we'll all get $1000, but we'll get less of something that we really need - energy. Advantage: McCain.
- Obama will crack down on excessive energy speculation. McCain doesn't advocate this. Since the FCTC allowed much broader rules for oil speculation in 2003, it has soared and much more money is invested in energy speculation. Dick Morris argues passionately that this is one of the biggest problems we have with high oil prices. Of course, this is true as long as speculators are betting that oil prices will go up. We saw recently, when the President lifted the executive ban on offshore drilling what can happen to oil prices driven by speculators. In theory, speculation ought to just reflect what investors see as the future of oil prices. Speculators take risks and are rewarded if they bet right, just as in any market. However, for years prior, there were tighter rules around speculation in oil commodities. I guess I could live with this as part of an approach, but, I don't see it as something that will have any real meaningful impact. Advantage: Neutral
- Obama will release oil from the strategic petroleum reserve, McCain is silent on it (I assume he wouldn't). Again, I don't have a major problem with this, it's been done by presidents of each party to address short term spikes in oil prices. It could help in a very short term, but, as a long term solution, it's a meaningless feel good measure. Advantage - neutral.
- Obama will increase CAFE standards 4% per year. McCain supports CAFE, but instead of increasing the standards, he wants to enforce them where automakers can't just pay the penalties for non-compliance, but have to comply, by making the penalties severe. I guess if we believe the automakers can meet the 4%/yr requirement, it's not a rotten approach, but I don't generally support either of these, since I'm against CAFE to begin with. Since both candidates support CAFE, if we're going to have it, let's make it meaningful, and I suppose the 4%/yr requirement is technically feasible, so it would be ok. Beware the law of unintended consequences here, though. If the 4% requirement drives up prices on those new cars so much that they are too expensive to replace an existing car, it could find people holding on to their less economical older cars longer, and would have the ultimate effect of not improving conservation. It will also result in lighter and smaller cars. Do Americans want these? With $4/gal gas, I think there's a market. Advantage: Slight for Obama
- Obama would get 1M plug-in hybrids on the road by 2015. He claims they will get up to 150MPG. I don't know where that 150MPG figure is coming from. McCain is proposing a $300M prize for for full commercial development of plug-ins and fully electric cars to spur battery development. I actually think McCain's idea more accurately reflects the current state of technology here and is more likely to produce results than Obama's mandate. And, it's much more of a free-market approach. Auto state representatives will resist any mandate, and they're mostly Democrats, so that's a non-starter for Obama. McCain's idea is much more likely to produce results. Advantage: McCain
- Obama is going to give a $7000 tax credit for purchasing advanced vehicles. He doesn't have any specifics on this. Is this to entice us to buy those plug-in hybrids? Of course, McCain is going to give a $5000 credit for purchasing no-carbon cars. He's going to pro-rate the credit for really low carbon emitters. McCain's credit is lower, but it's going to more purchasers. Advantage: Neutral
- Obama is going to establish a National Low Carbon Fuel Standard - McCain has no analog to this. If Obama is proposing this to put a national standard in place of the hodgepodge of state laws around oxygenated fuels, then I think this is a good idea and will help refiners to make one standard of fuels. If that's what he means, good idea. Advantage: Obama
- Obama will place a "use it or lose it" requirement on oil leases - we already have this. I believe oil leases expire after 10 years today. Does he mean to shorten it? Since Democrats all love to tell us it takes 10 years to get oil to market, isn't 10 years the right length? Anyway, meaningless since it's already in place. Advantage: Neutral
- Obama will "promote the responsible domestic production of oil and natural gas." He says he'll remove barriers to production in fields that are already being exploited. I believe this is good, but it's pablum. McCain is silent on this, but it's so obvious as to not need stating and something Congress could do tomorrow (if they were in session). Advantage: neutral
- Obama will reduce domestic energy consumption by 15% by 2020. He doesn't say how, but we might be able to reduce the growth in energy requirements, but I don't see us using 15% less without either seriously slowing immigration or somehow cutting population, or a serious change in our lifestyles. Maybe since we'll be providing so much less health care (since it'll be rationed following an Obama administration) we can cut their energy consumption? It's unrealistic. Fortunately, McCain is a realist and doesn't have such a goal. Advantage: McCain
- Obama will weatherize one million low income homes annually for ten years. Good idea, but how are you going to pay for this? It's a good idea for individuals, but I don't support a government program to do this. We already have tax credits for energy efficient appliances and windows (among other things). Advantage: McCain
- Obama will develop clean coal technology. McCain will devote $2B annually to this same goal. Obama is short on specifics, but, the goal is the same. Advantage: Neutral
- Obama will accelerate completion of the Alaskan natural gas pipeline. McCain is for increased production of natural gas, particularly from offshore sources. Again, Obama wants to help get an existing source to market quicker, while McCain is going after new sources, while Obama is silent on this. I think the ANGP sounds like a good idea to speed up, but McCain adds the new sources, so Advantage: McCain
- Obama wants to institute cap and trade to reduce greenhouse emissions 80% by 2050. See McCain-Lieberman. He's Mr. Cap and Trade. I'm opposed to cap and trade, so, Advantage: Neutral (actually, bad for both)
- Obama will re-engage the US in the UN's ridiculous UNFCC. McCain's silent on this. There's a reason we voted 98-0 in the senate against Kyoto. The UN is only interested in limits on the West. Advantage: McCain
- McCain will commit to increased oil exploration from domestic sources. Obama is silent (but has expressed limited willingness to drill). Advantage: McCain
- McCain wants to increase our sales of Flex Fuel Vehicles from the pledged 50% by 2012, to sooner, in the Brazilian model. Obama is silent. Advantage: McCain
- McCain believes alcohol based fuels hold great promise and he wants to remove tariffs that prevent us from importing non-corn based alcohol-based fuels, and subsidies that promote the creation of these fuels from corn, vice cellulosic ethanol. If one believes that alcohol based fuels are part of the solution, then one needs to accept that cellulosic fuels are our best hope, not corn-based. McCain's approach would allow us to get these fuels from sources such as Brazil, and ultimately develop them here ourselves, vice subsidize corporate farmers and raise the cost of corn. Obama is silent. Advantage: McCain
- McCain wants to build 45 new nuclear plants by 2030, eventually building 100 new plants. Now, these are the kinds of high-paying jobs I can get behind. Advantage: McCain
- McCain wants to make a 10% tax credit for R&D permanent. Obama is silent. Advantage: McCain
- McCain wants to rationalize the tax credit system that exists for wind, solar, and hydro power. It's a small step, but one Obama is silent on (I expect he wouldn't resist this, though). However, his silence makes it Advantage: McCain.
All this data was taken directly from the candidates' web sites (except any mention of cap and trade on McCain's site, whichI expect he wants to soft pedal since so many conservatives oppose it). It doesn't take much reading to see that, much like Obama, his plans are short on specifics, while McCain's are detailed enough, and his plan is much, much more comprehensive. Obama is going to rely largely on conservation measures, doesn't talk at all about new domestic sources, and specifies several mandates.
It's pretty clear that unless you believe the conservation goals Obama sets can be reached, his plan has little chance of reducing our dependence on foreign oil by very much. This is both a supply and demand problem, and Obama really on focuses on demand. If you want a lower standard of living, with reduced energy consumption, Obama's your man. If you want the same, or greater standard of living, with continued growth in the economy, and less greenhouse emissions, then McCain's ideas are superior, and much more of a change to the way we do business today.