Upton: The Gipper's Energy Lesson
Washington, DC, February 6, 2011 | Meghan Kolassa ((202) 225-3761)
By Rep. Fred Upton -
Many will use the 100th anniversary of Ronald Reagan's birth this Sunday, February 6, to reflect on his accomplishments as president. Winning the Cold War and reviving the economy will get most of the attention, and both achievements merit their place in the history books.
Yet Americans should also remember the very first thing Reagan addressed after taking office: energy policy.
I had the great privilege of working for President Reagan, and his successful, free-market approach to energy offers important lessons for today's energy debate and its consequences for economic growth and job creation. Reagan inherited all the energy policy mistakes of the 1970s - a decade in which every energy challenge was met with ill-advised federal programs and mandates.
For example, domestic oil production was hampered by a convoluted system of price controls that favored imports while sparking shortages and gas lines - ironic, since they were touted as the answer to OPEC and a benefit to consumers. Just one week after his inauguration in January 1981, Reagan issued an Executive Order sweeping away this market interference.
Lamenting that "restrictive price controls have held U.S. oil production below its potential," Reagan said that eliminating them "is a positive first step towards a balanced energy program."
Within a few years, domestic oil production went up - and prices went down. Affordable energy helped usher in a quarter century of phenomenal economic growth. Reagan understood that keeping the lights on for families with abundant, reliable energy was not a partisan issue, it was a moral issue, and the entire country would benefit.
In contrast with Reagan's pro-growth energy policies, President Obama's energy moves are Big Government micromanaging straight out of the '70s playbook.
Within weeks of taking office, his Department of the Interior revoked dozens of oil and gas leases in the West and shelved a plan to increase offshore production. Ever-tightening drilling restrictions are limiting domestic production much like price controls once did.
Unfortunately, Obama's State of the Union address offered more of the same: digs at oil producers as purveyors of "yesterday's energy" to be replaced by government-selected "clean energy breakthroughs." The President repeatedly mentioned "clean" but never said "affordable." In contrast, Reagan considered the latter at least as important as the former, because he understood that affordable, abundant, and reliable energy sources are essential to job creation and economic strength.
Reagan never assumed central planning would replace the ingenuity and efficiency of a free marketplace.
Just last week, Shell postponed a $3.5 billion Alaska drilling project in an area believed to contain up to 25 billion barrels of oil following a decision by the Environmental Appeals Board to invalidate its air quality permit. Shell reported that it has complied with 34 other permits.
No wonder we import 70 percent of our oil today.
Reagan's work on energy did not end with the elimination of price controls. He also recognized the threat to the economy - and to freedom - of burdensome, cost-raising environmental measures. Needless to say, nothing enacted by the Reagan EPA threatened to boost energy prices and destroy jobs like the agency's current global warming strategy under the Clean Air Act. EPA's multi-pronged crackdown on fossil fuels - the coal, oil, and natural gas that provides 85 percent of the nation's energy - threatens homeowners, car owners, and businesses large and small. The costs could reach into the trillions, and the job losses into the millions.
Reagan's famous line that "government is not the solution to our problem, government is the problem" is particularly appropriate in describing EPA's global warming power grab.
Ronald Reagan's free-market and limited-government approach to energy has a proven track record. On Reagan's centennial the current administration would be wise to follow his course. Two critical first steps would be to remove the obstacles to domestic oil production and put an end to EPA's global warming regulatory overreach.
Regardless, it is incumbent upon those of us in Congress to channel our inner Gipper and fight for an energy policy that works for America.
Congressman Fred Upton represents Michigan’s 6th district. He is chairman of the House Energy and Commerce Committee. He served in Reagan's Office of Management and Budget from 1981-1985.