IER and AEA: For a Free Market

Elliott Negin of the Union of Concerned Scientists has updated his 2013 six-part series, “Unreliable Sources: How the Media Help the Kochs and ExxonMobil Spread Climate Disinformation.” His subtitle says it all:

Too often the news media have provided a platform for fossil fuel industry-funded think tanks and advocacy groups to make spurious claims about global warming and renewable energy and allowed them to pass themselves off as disinterested parties promoting free markets and limited government.

In Part I, Negin reported a jolt he received from the normally reliable National Public Radio.

One of my morning rituals is half-listening to NPR’s “Morning Edition” while I’m getting ready for work. But on January 3 [2016], when a story came on about the fate of the wind industry’s production tax credit, I snapped to attention. It was good news. Congress’s eleventh hour “fiscal cliff” agreement had left the tax credit in place for at least one more year.

The NPR story featured a spokesman for a small Iowa wind project who explained how the tax credit benefits rural communities. For balance, it also included a naysayer: Thomas Pyle from the American Energy Alliance, who wanted Congress to kill the subsidy.

“It’s not that the subsidies for the wind industry in and of themselves are bad, but it is part-and-parcel of a larger problem, and that is, is that the federal government is notoriously bad at energy policy,” Pyle said. “They have been for decades, and we think it’s time for them to step aside.”

But who is Thomas Pyle and what is the American Energy Alliance? The story didn’t say. It turns out that the American Energy Alliance is a front group for the oil and gas industry…. Digging a little deeper, I learned that AEA is the political arm of the Institute for Energy Research…. [A]t the very least the reporter should have identified Pyle as an oil and gas industry spokesman….

May I personally respond, Mr. Negin?

IER was founded in 1989 in Houston, Texas, as a free-market voice in the energy debate—and remains so today. As founder and CEO of IER, I can attest that not much has changed except for our greater reach and influence. In 2008, in response to growing energy politicization, IER opened a Washington office, and soon after an advocacy arm, the American Energy Alliance, was founded.

We are one of many nonprofit energy-related organizations that populate the nation’s capital. Our niche is a philosophical orientation and a consistent support of free-market energy policy. IER and AEA are not “front groups” for anything but private-property, free-market entrepreneurial capitalism.

We favor voluntary solutions over coercive ones because self-interested individuals constrained only by the rule of law and ethical custom have better incentives, knowledge, and outcomes than those engineered by politicians and bureaucrats. We believe that energy decisions should be made by regular citizens. Decentralization, not centralization.

The work of IER and AEA reflects a number of long-standing academic traditions, including market-process economics, Public Choice theory, and natural-rights philosophy. We are influenced by F. A. Hayek’s insights on the failure of central government planning, such as that experienced during the energy-crises the 1970s. James Buchanan’s explanation of government failure elucidates the gulf between intention and result in the public sector.

Julian Simon’s ultimate resource uniquely explains why so-called depletable resources expand over time in a business/economic sense. Milton Friedman’s numerous insights about energy during his lifetime have proven reliable. These four (three being Nobel Laureates in economics) were not fronts for anything, much less a particular energy interest. Their work inspires our work today.

Politically, IER and AEA seek to replace crony capitalism and corporate welfare with consumer-driven creative destruction and government neutrality. We faulted T. Boone Pickens yesterday and criticize Elon Musk today in this regard.

We oppose special government favor for any energy company, whether it be a tax carve-out, a mandate, or a taxpayer check that is outside of a free-market norm. Thus, Mr. Negin, if Tom Pyle did not answer this question, then he was not asked it:

OK, but didn’t Pyle say the federal government should stop subsidizing all energy? That sounds pretty evenhanded, right? In fact, as aggressive as Pyle and his benefactors are about undermining their competition, they are even more vehement about protecting themselves—and they know full well their friends in Congress wouldn’t dare touch oil and gas subsidies. Indeed, legislation introduced last May to pull the plug on the billions in annual tax breaks and subsidies the oil, gas and coal industries enjoy died a quick death.

Indeed, get rid of all tax favors and federal research-and-development spending for oil, natural gas, coal, ethanol, nuclear, wind power, and solar power. Mineral tax law should be the same for all companies and industries and not be based on special considerations (in favor of a “strategic” industry). End the Production Tax Credit for wind turbines and the Investment Tax Credit for solar panels. End special subsidies for electric vehicles. End mandates and non-market incentives for energy conservation (conservationism). Let the best energies and technologies win.

For more about IER’s purpose and mission, please peruse our website. I do not know anyone on our staff, or on the staffs of other free-market organizations, who does not believe they have a superior intellectual case and are proudly doing their part to advance a free and prosperous commonwealth. Ad hominem argumentation is quite inappropriate.

Finally, IER and AEA did not ask for politicized energy. Energy politicking should end on all sides. Surely the burden of proof should be on government coercion, not consenting adults in a free marketplace.

The post IER and AEA: For a Free Market appeared first on IER.