I should write something other than "Boo Democrats!" about the energy bill that the Senate is so furiously fighting over today. Here's one big problem:
Until this week, Mr. Bingaman [who chairs the Senate Energy Committee and is circulating the bill] had opposed big subsidies for coal-based fuels, saying that each new production plant would cost billions of dollars and that the economic uncertainties posed risks for taxpayers.
But in what could be an effort to fend off demands from coal-state lawmakers for bigger subsidies, Mr. Bingaman’s draft proposal would offer up to $10 billion in direct government loans for coal-to-liquid plants.
It's so great to know that a senator can be made to cave so quickly and in such a remarkable way! But let me say two things. First, I have no idea what the roll call on this will look like, but I sort of doubt that a lot of these handouts will make it through. I know for a fact that Reid thinks that Bingaman's climate change proposal is terrible and that he refuses to get behind anything that weak. And if that's an indication of where the energy bill is going, then that's a good thing.
But if the $10 billion does get allocated, what will be really, truly, madly, deeply disspiriting is not the funds per se, but the potential implications they will have for a comprehensive climate bill in the future. No serious greenhouse gas reduction strategy can allow coal to play a major part at all, let alone a $10 billion part. It's almost definitional--a CTL handout would be pretty well obviated by an Edwards-like cap-and-trade system. And that would be fine if I didn't think the existence of the handout itself would serve as a de facto impediment to passing a cap-and-trade plan in the first place. This kind of program has inertia, and eliminating it so quickly after its creation (remember, this has to happen fast!) will be a tough--perhaps impossible--political sell.
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