Issue Position: Energy

Issue Position

By:  Paul Ryan
Date: Jan. 1, 2011
Location: Unknown

The economic well-being of the United States and the livelihood and safety of our citizens is largely dependent on maintaining a strong energy supply. We depend on electricity to light our homes and businesses, natural gas to heat them, and gasoline to operate the cars and trucks that carry us to work and transport our goods. Because of the vital role of energy in our daily lives, we must continue to develop new sources of energy that are reliable, renewable, affordable, and environmentally safe.

Cap and Trade Legislation

On June 26, 2009, the House passed sweeping legislation under the guise of curbing global greenhouse emissions. H.R. 2454, the American Clean Energy and Security Act, would achieve this by putting in place a complicated "cap-and-trade" scheme requiring all energy producers to purchase expensive government permits in exchange for the right to produce energy from certain natural resources or to produce certain goods like steel, aluminum, or cement. The legislation will devastate our economy and cost Wisconsin critical manufacturing jobs.

The proposed cap-and-trade plan, would in effect place a new tax on energy consumption, from transportation, to food, to electricity. It will cost taxpayers on average $3,000 per year and raise taxes by more than $840 billion. The impact on Wisconsin would be especially severe. Estimates from the Congressional Budget Office and the Energy Information Administration predict Wisconsin families alone will shoulder an extra $230 million in energy costs as a consequence of this bill. At a time when families are struggling to cope with harsh economic conditions, driving up the cost of their heat and power bills is wildly irresponsible.

Further, the consequences this unilateral energy tax will have on our fragile job market are just as alarming. Under H.R. 2454, the 1st District of Wisconsin is predicted to lose roughly 3,000 jobs. We have already suffered the closure of major car factories in Janesville and Kenosha, and the unemployment rate in Racine and Janesville remains above 10%. It is unacceptable for Congress to consider legislation that would drive even more Americans out of jobs and force businesses to close their doors. Wisconsin manufacturers, already facing stiff competition from overseas, would be put at an even further competitive disadvantage with countries such as China that have no intention of inflicting a similar tax on their businesses.

Additionally, it is unclear if this legislation would reduce carbon emissions enough to have a significant impact on global temperatures. In fact, studies from across the spectrum indicate that the various cap and trade schemes being proposed in Congress would produce a change in global temperatures of less than 0.5o F. And, this change would not take full effect until 2095. Further, this small reduction in temperature also assumes that other countries will not increase carbon emissions.

Although the Senate did not act on a cap-and-trade plan, the Environmental Protection Agency is moving ahead with regulation of greenhouse gases through the Clean Air Act -- substances that the Clean Air Act was not written to cover -- beginning on January 2, 2011. As the regulations progress, millions of entities, including small businesses, farms, hospitals, and even churches, will be exposed to burdensome federal regulations for the first time. Similar to H.R. 2454, these regulations will actually hinder the environmental goals they set out to achieve. By making manufacturing more expensive here in America, this bill would send manufacturing jobs overseas to our competitors, like India and China. For every ton of emissions we reduce, India and China will produce several tons more.

I believe that environmental stewardship and economic growth are not mutually exclusive goals. That is why I have outlined a national energy proposal built on principles of conservation, American-made energy, regulatory reform, and alternative energy development.

Bucyrus Export-Import Bank Decision

On June 25, 2010, the U.S. Export-Import Bank announced its intention to deny several hundred million dollars in loan guarantees to Reliance Power Ltd, an Indian utility company which is set to build the country's largest coal-fired power plant. Bucyrus International Inc., based in South Milwaukee, won an international competitive-bidding process to supply an estimated $600 million worth of mining equipment for this, which would create an estimated 1,000 good-paying manufacturing jobs in and around Milwaukee. Bucyrus' bid relied on favorable financing rates from the Export-Import Bank, whose stated mission is to "assist in financing the export of U.S. goods and services to international markets."

Fortunately, in October, the Export-Import Bank reversed its decision and approved the loan financing for Bucyrus. I am encouraged by the Bank's decision and will continue to work with the Wisconsin delegation to support policies that will create jobs and grow the economy.

A Long Term Solution for Energy Independence

I believe a national energy proposal must take a three-pronged approach focused on increasing American-made energy, reforming outdated fuel regulations, and investing in alternative energy sources. In the 111th Congress, I was happy to help author H.R. 5899, A Roadmap for America's Energy Future. This legislation, introduced by Representative Devin Nunes, promotes an all-of-the-above energy policy that facilitates untapped, American-made energy, and recognizes the importance of transitioning towards alternative energy from a long-term perspective. H.R. 5899 also streamlines the outdated regulatory process for clean technologies like nuclear power.

Alternative Energy

From a long-term perspective, I also support the development of alternative fuel vehicles. American automakers have already made strides in this area with the production of cars and trucks that run on ethanol, electricity, hydrogen and natural gas. We must encourage this type of innovation to continue so that Americans can continue to enjoy the freedom of owning automobiles without contributing to our increasing demand for crude oil. Equally important, this course of action will also have many positive benefits for our environment. That is why I have supported proposals that would require the Environmental Protection Agency (EPA) to implement research programs that would make biofuels more compatible with petroleum-based fuels.

More Refineries

I also support reforms to our regulatory regime to allow for new refineries to be built in the U.S. We have not built any new refineries since 1976. At that time, our country was only using a handful of blends of gasoline. Now, we are attempting to refine four dozen blends of gasoline in a system designed to only produce a few. This has imposed substantial constraints on our ability to refine the gasoline that we use on a daily basis and has forced us to import more and more of the gasoline that we use. Furthermore, adding new refineries to the market will lead to greater competition and help place downward pressure on prices.

Boutique Fuels

In addition to problems with supply, we pay more for gasoline because of an outdated reformulated gasoline policy that requires different areas of the country to use different blends of fuel to meet environmental requirements. This fragmented system results in the under-production of certain blends and allows refineries to charge more for the unique boutique fuels that they produce due to a lack of competition in the marketplace. The use of boutique fuels also causes price spikes any time that there is a supply disruption, such as a refinery fire or pipeline break, because there are few refineries that can make the special blend to cover the loss in capacity. Furthermore, areas like Southeastern Wisconsin that are required to use different fuels during the winter and summer months experience price spikes when the transition between fuel types is made.

I have been working hard to help address the boutique fuels problem since 2001.


We must also affect the demand side of increasing gasoline prices. I believe that energy conservation and responsible fuel efficiency improvements can go hand in hand with our efforts to expand our economy. I believe that initiatives such as requiring efficiency improvements on vehicles using a class-by-class basis, rather a company-by-company basis, are proposals that can help reduce the demand for gasoline while not undermining U.S. auto manufacturers. It is my hope that Congress will pass legislation that will reduce energy consumption in an efficient manner, protecting both industry and ensuring lower energy prices for consumers.

Help us stay free for all your Fellow Americans

Just $5 from everyone reading this would do it.