Nuclear power is happy power.
I just read through the energy plans of John McCain (The Lexington Project) and Barack Obama (New Energy for America). I was surprised by both.
Obama’s is deeper than I expected it to be. That says more about my expectations than the plan, though. McCain’s, however, is thoroughly impressive. If you put the two side by side and were honest with yourself, I don’t think even the strongest O supporter could reasonably disagree. Unreasonable disagreement is always a possibility.
The candidates have a few goals in common: development of alternative energy, regulating speculation, increase fuel economy, develop clean coal, and a few others. But they differ in some profound ways, even where their goals seem the same.
First, and one of the most bothersome - at least on the surface, because I am neither an economist nor an accountant - is Obama’s support of a windfall profits tax on oil companies. Now, aside from the fact that the oil companies will absorb this tax by raising the price of gas (as well as the ingredients they supply for plastics, rubber, makeup, etc.), it will make it more difficult for American oil companies to compete globally.
Obama’s plan “will require oil companies to take a reasonable share of their record‐breaking windfall profits and use it to provide direct relief worth $500 for an individual and $1,000 for a married couple.” I checked our national employment stats and the civilian workforce is at about 154 million. If you alot $500 for each of those people, and don’t even worry about the millions of housewives, retirees, and others who aren’t part of the workforce (but who would probably get a check), that’s $77 billion. But exactly how big were those windfall profits?
Of the six “supermajor” oil companies, 3 are headquartered in the US: Exxon/Mobil, Chevron, and ConocoPhillips.In 2007 Exxon/Mobil made about $40 billion in profit; Chevron made almost $19 billion; ConocoPhillips made just under $12 billion. That may sound like a lot, until you add it up and find that that adds to a measly $71 billion. And that’s all the profits. These companies would have to go into $6 billion debt to cover “direct relief” to members of the workforce. McCain doesn’t support the windfall tax.
Both candidates favor a cap-and-trade system for emissions credits. I don’t like the idea, but at least McCain’s is mostly private - companies sell their own credits and keep the cash. Obama wants the gov’t to auction off the credits to the highest bidder. McCain’s is more favorable to small companies who wouldn’t be able to compete with Exxon and GE for auctioned credits, and can increase their capital - and therefore their ability to compete - by selling their credits.
Elecrifying: the Tesla Roadster
McCain’s worst idea is the $300 million X-Prize knockoff. At least the pricetag is .04% of Obama’s “direct relief”. They both support a tax credit for buying more efficient cars. Obama’s is a flat $7,000 for “advanced technology vehicles”, while McCain’s is graduated based on fuel economy, and capped at $5,000 for “zero-emissions” vehicles.
Both have ambitious goals for 2012, but McCain’s seems plausible, while Obama seems to be living in a dream world:
John McCain Supports Flex-Fuel Vehicles (FFVs) And Believes They Should Play A Greater Role In Our Transportation Sector. In just three years, Brazil went from new cars sales that were about 5 percent FFVs to over 70 percent of new vehicles that were FFVs. American automakers have committed to make 50 percent of their cars FFVs by 2012. John McCain calls on automakers to make a more rapid and complete switch to FFVs.
And to help create a market and show government leadership in purchasing highly
efficient cars, an Obama administration will commit to:
- Within one year of becoming President, the entire White House fleet will be converted to plug‐ins as security permits; and
- Half of all cars purchased by the federal government will be plug‐in hybrids or all‐electric by 2012
Obama’s plan seems very naive. Naive and highly unlikely. It becomes more of both when you add in his plan to “ensure that all new vehicles have FFV capability – the capability by the end of his first term in office.”
Both got on my good side by endorsing cellulosic ethanol and other biofuels. Both also want to increase fuel economy. McCain wants to do so by enforcing the CAFE standards on the books; many companies will break them, and accept the fine as a production cost. Obama wants to “increase fuel economy standards 4 percent per each year”.
One of the best ideas that’s shared by both is to increase the energy efficiency of the federal gov’t, which is the largest consumer of energy in the world. Both also want to retrofit the nation’s electricity grids.
I think one of McCain’s best ideas is to establish a permanent 10% tax credit on wages spent for research and development. Obama is essentially saying, “We’ll spread $15 billion in tax money for you to research alternative energy.” McCain is saying, “If you research alternative energy, we’ll give you 10% of your money back.” That ensures that every company that puts some effort in will have an incentive, as well as promote creativity; the competition for grants generally seems to lead to a homogenization of ideas once the researchers figure out which kinds of projects get the dough. It will also mean that the budget appropriation for R&D grants won’t be subject to the annual 2-3% increase that will turn an ok idea into a nightmare of political posturing and bureaucratic wastefulness.
All-in-all, I think McCain’s plan is deeper, stronger, and more grounded in reality than Obama’s. It’s also more conservative, putting the money in the hands of people who know what to do with it. My energy vote goes to John McCain.
Technorati Tags: alternative fuels, clean coal, drilling, energy efficiency, energy plan, mccain, nuclear power, obama, windfall profits, x-prize
2 responses so far...
Is that $33 a month or year? $33/month is a big deal for me…that’s 20%.
One thing I’ve found interesting is that in Alaska Sarah Palin executed Obama’s idea for a taxpayer rebates funded by a windfall profits tax. Hers was on a much smaller scale, and the state could actually afford it, but still interesting against the larger scale idea.
Blogs4God
Great read, glad to see someone analyzing the plans vs. the hype. I agree the plans are more alike than different, even the nuclear vs. renewable part is the same once you dive through the numbers.
I did a few hours of research the other day and broke down the costs. There is only a potential $33 difference on your energy bill between Obama’s plan and McCains plan.
http://blog.arkayne.com/?p=8