Rick Perry Makes a Good Plan Sound Bad

The Texas governor's energy pitch strikes all the wrong notes.

The biggest problem with the energy plan that Rick Perry released recently is Rick Perry himself. Like a desperate used-car salesman, he is making such outlandish claims for it that his customers might walk out before taking a good look.

That, however, would be a pity, because the plan is actually better than any proposed by any president in recent memory.

The liberal blogosphere is up in arms against it because it stands for everything liberals despise. Unlike that other yahoo from Texas, George W. Bush, who made curing America’s “addiction to oil” a guiding principle, Perry is absolutely unapologetic about this “addiction.” To the contrary, rapidly exploiting America’s fossil fuel reserves—coal, oil, gas—is a key plank of his energy agenda.

To this end, he wants to:

• Expand oil drilling in the Gulf and the mid-Atlantic, as well as federal lands including Alaska’s hallowed Arctic National Wildlife Refuge.

• Blast out natural gas trapped in shale basins through a new process called fracking. Fracking, incidentally, can help America unlock enough clean-burning natural gas to replace all its coal-generated electricity for 70 years. Enviros initially welcomed this development—until they realized it would make their beloved renewables even more uncompetitive.

• Rescue coal, as abundant in the U.S. as oil is in Saudi Arabia, from President Obama’s greenhouse gas strictures, which make it prohibitively expensive.

Perry isn’t hostile to renewables. He insists he would use an “all of the above” energy strategy, including wind, solar, and biomass. But he won’t give them government handouts, something that every president, Democrat or Republican, has done since Gerald Ford.

He also promises to end federal subsidies for non-renewables. This is more easily said than done, given the complex web of direct and indirect tax breaks and subsidies that have long distorted the energy sector. One would take his promise more seriously if he offered more specifics, but his plan is blissfully vague. Still, it represents progress (of sorts) that he hasn’t identified any sacred cows for special protections.

However, the part that has liberals really foaming at the mouth is his suggestion to severely check the power of the EPA and give states more leeway to set their own environmental regulations. The standard criticism of such rollbacks is that states, released from Uncle Sam’s iron fist, will engage in a race to the bottom and gut environmental standards to attract business. But states have a far greater incentive than distant bureaucrats to look for ways to protect their natural resources with minimal sacrifice of economic and other priorities.

All in all, Perry’s plan offers a radical blueprint for energy liberalization. So what’s wrong it? His sales pitch.

For starters, precisely because it is so ambitious, it won’t be easy to pull off. But instead of leveling with the American public, Perry is exaggerating the plan’s political feasibility, claiming that most of it can be implemented by executive fiat without congressional action.

Take the EPA, for example. It was created to enforce duly enacted federal laws, such as the Clean Water Act and the Clean Air Act, whose constitutionality courts have long upheld. Rolling back the EPA’s authority over states will require congressional approval, something harder to come by, these days, than divine grace. Pretending otherwise is just dishonest.

What’s more, Perry is touting his energy plan as a jobs program, claiming that it will create 1.2 million jobs. This is not as wild as Obama’s promise of generating 5 million green jobs by shoveling stimulus money into politically-connected duds like Solyndra. However, job projections are notoriously difficult to make accurately, and there is every reason to believe that Perry’s claims, largely lifted from oil industry studies, are way off. Michael Levi, senior fellow for energy and environment at the Council on Foreign Relations, estimates that Perry’s plan will create 620,000 jobs at best. If Levi is right, Perry has needlessly opened himself up to attack by using inflated numbers. And for what? The main point of energy liberalization is not to create jobs. It’s to make cheap and reliable energy available to individuals and businesses. That’s the message that Perry should be hammering.

Perry touts his plan as the road to energy independence, and in this lies its fatal flaw. The world market sets energy prices, especially the prices of oil and gas. Energy won’t cost any less because it is made in America. Yes, America should tap its energy resources if it can do so competitively. If it can’t, it should buy energy from abroad, just as it does food, clothing, electronics, and every other commodity. Chanting an energy independence mantra will commit America to generating its own energy, eviscerating the entire initial rationale for energy liberalization: letting the market determine where and how to generate supply to meet demand.

Perry has a solid energy plan that can distinguish him from the pack and force a real debate on the issue. But he has to stop claiming that it can cure every American ill. He’s pouring good medicine into a snake oil bottle.

Reason Foundation Senior Analyst Shikha Dalmia is a columnist at The Daily where this column originally appeared.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Fluffy||

    the complex web of direct and indirect tax breaks and subsidies that have long distorted the energy sector

    Does anyone know of a nice web page or .PDF document web link that gives bullet points for the various elements of this "complex web"?

    Because we talk about the existing subsidies for fossil fuels a lot, but it would be nice to get granular and say what they are, specifically.

  • Live Free or Diet||

    Dirt on the fossil fuel industry is most freely available from the renewable energy industry. I have found EESI to be a useful place to start: http://files.eesi.org/fossil_f.....62311a.pdf

    If someone has a better link for this kind of information, I'd love to have it!

  • ||

    why should ANY part of the energy industry get subsidies? Or any industry, period, for that matter? This highlights the problem with the tax code.

  • Realist||

    Perry's eyebrows stay put and his suit fits. What do people want?

  • Mark||

    You gotta be crazy my dude
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  • Fluffy||

    Dude, you are NOT putting forth Perry's eyebrows as a good thing, are you?

    Because before posting my subsidy open question I seriously considered just posting "WTF is up with this dude's eyebrows?" instead.

    They look like deepsea animal life.

  • Joe M||

    Woolly Bear Tiger Moth Larvae, is what they are.

  • Lord Humungus.||

    he has nothing on Martin Scorsese

  • Riverside Plumber||

    i likey this bloggy

  • PIRS||

    "Perry touts his plan as the road to energy independence, and in this lies its fatal flaw."

    I am far more concerned about comic-book themed action figure independence. I want all of our comic-book themed action figures to be made in the USA! Yes, even the hentai ones.

  • Live Free or Diet||

    Complexity in tax code? A 12-inch Victorian gentleman doll, a G.I. Joe doll, a Steve Rogers/Captain America doll, and a Barbie-boyfriend Ken doll are all supposed to be taxed differently. One is a "doll", one an "action figure," one a "collectible statuette" and one an "aspiration figure."

  • PIRS||

    Complex indeed! It is no wonder we are losing the aspiration figure trade war!

  • ||

    What a steaming cow pie. If you aint talking nuclear, you aint talking sense.

  • dentist huntington beach||

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  • Fatty Bolger||

    What a strange set of criticisms. Since when did Presidential candidates ever warn people that their plans could be hard to pass or implement? It's always "As President, I will do this, I will do that, etc., etc." with no regard to how likely it is that Congress will pass anything. And at least Perry kept the jobs promises in the ballpark, instead of pulling crazily impossible numbers right out of his ass like the current holder of the office likes to do.

  • Fatty Bolger||

    Oh, and there is nothing wrong at all with telling people that good economic policies will create jobs. That is not the same as promising that government spending will create jobs. In fact, it's necessary to make this clear, because the bullshit stimulus and multiplier claims are not going to go away, and people need to understand that free and open markets are far better at creating jobs than government spending.

  • ||

    Regarding the second bullet-point: "Enviros initially welcomed this development—until they realized it would make their beloved renewables even more uncompetitive."

    I think the bigger reason enviros don't like it is the impact on drinking water, and the elevated levels of methane that have been created as a result of fracking.

  • Apatheist||

    Shorter Derek: I think the bigger reason enviros don't like it is they are retarded.

  • Metazoan||

    Yes, because only retarded people think that drinking water should be clean.

  • ||

    no one opposes clean drinking water, but a good many people oppose pushing govt money toward nice-sounding ideas that don't work while ignoring energy sources that are proven. As it is difficult to take someone who refuses to help himself seriously, so it becomes difficult to take a country seriously when it refuses to take advantage of vast energy sources literally under its feet.

  • ||

    I'm pretty sure Ron Bailey has done a couple articles on fracking and how it DOESN'T usually impact drinking water. Not sure about the methane thing though.

  • I, Kahn O'Clast||

    The proposals are completely deaf to environmental concerns. Sufficient numbers of Americans have sufficient concern over the environment that this package is already a tough sell. You don't even have to believe that global warming exists or is man made to be at least a little concerned about the long run here. I think the zeitgeist may be a little further "left" on this one than Perry may understand.

  • ||

    environmental concerns would more credible if they did not start from the "man is the problem" approach and/or center on radical degradation of our standard of living. Oddly, most Americans are not interested in our resembling 1970s China with everyone on bicycles. And if you look, things like leaded gasoline are gone; we have a million cleaner-burning blends that change with the season; and above all, oil and natural gas are proven to work AND they are available. Unless you enjoy reading about things like Solyndra, Obama trumpeting loans to Petrobras, and the EPA wanting to regulate carbon.

  • Hate Potion Number Nine||

    So long as the energy companies clean up after themselves - or at least make an effort to minimize the damage, I'm okay with it.

  • ||

    Met your new president as your country continues its course to Idiocracy.

  • ||

    "Perry is...claiming that most of [his plan] can be implemented by executive fiat without congressional action."

    So? What's the problem with that? We don't need no stinkin' congress!

  • DDavis||

    " The world market sets energy prices, especially the prices of oil and gas. Energy won’t cost any less because it is made in America. "

    The market sets oil prices, but if oil becomes available in more stable regimes, the risk associated with it diminishes, and the cost goes down.

  • ||

    Not to mention that if there's simply more of it on the market...supply, demand, etc.

  • ||

    Don't expect Shikha to mention something like that.

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    Surely investors can't believe that buying when expected returns are low and selling when they're high is a good strategy. Yet, they persistently repeat this behavior.

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    You could unintentionally say something that may come back and bite you," says McKee.

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