Democrats using market manipulation to split energy sector

NY Times:

...

“It’s much harder to pass clean-energy legislation when big oil and other energy interests are united in their opposition,” said Daniel J. Weiss, climate policy director at the liberal Center for American Progress. “The companies that recognize the economic benefits in the bill can help bring along their political supporters.”

The American Petroleum Institute trade group, dominated by major oil companies, opposes the legislation, saying it would discourage domestic exploration and lead to higher oil prices. But some natural gas companies, though longtime members of the institute, have formed a separate lobby and are working actively with the bill’s sponsors to cut a better deal for their product.

The proposal moving through Congress would cap the emissions of greenhouse gases each year and allow companies to buy and sell permits to pollute. That approach, known as cap and trade, is meant to guarantee that emissions will decline, while providing market incentives for companies to invest in low-carbon technologies.

The measure would effectively put a price on carbon, raising the prospect that some energy producers might have to pay more than others. For that reason, billions of dollars could be at stake in some of the most arcane language in the bill.

Energy lobbies are using every tactic in the book to protect their industries, producing alarming studies about $5 gasoline and other steep cost increases that might result from a cap-and-trade system. They are also financing protest groups and advertising campaigns. In one case, a public relations firm working for the coal industry even sent opposition letters to Congress under forged names.

The divisions in the energy sector mirror a split in the broader business community. Several large companies like Apple and the utility Exelon left the United States Chamber of Commerce recently over the group’s opposition to climate change legislation.

But the biggest fights are among energy producers. They have spent more than $200 million in the first half of the year on lobbying efforts in Washington, according to the Center for Responsive Politics, a nonpartisan research group, up from $174 million in the same period last year.

...

Today, each energy subsector, fearing any legislation that might give it a disadvantage, is battling for favor. The gas producers, for example, have formed the American Natural Gas Alliance, which is spending heavily on advertising and lobbying to point out that gas emits roughly half the carbon dioxide of coal. The group has also helped organize its allies in Congress into a new natural gas caucus, with two dozen members.

“These fissures are happening because a policy is increasingly seen as inevitable,” said David G. Victor, an energy expert at the University of California, San Diego. “Old coalitions are splintering and fascinating new alliances are being formed.”

The most important fight is over whether companies have to buy pollution permits, called allowances, or whether the government hands them out free in the early years to help ease the cost of the transition.

President Obama has said the permits should be auctioned, an approach that would cost companies tens of billions of dollars. But after fierce lobbying from electrical utilities, the House made the permits free in the first decade of the program, to help finance the transition to cleaner fuels and to shield electrical consumers from higher prices.

Industry analysts say the utilities’ willingness to negotiate with Democratic lawmakers gained them a huge advantage when the House passed its climate bill in June. The oil and natural gas industries, by contrast, felt shunned in the House debate because they would not negotiate, these analysts say.

For example, oil companies complained that their mandated purchase of emissions permits would amount to a tax to be used to clean up dirty coal plants.

...

This is a shameful abuse of the free market system by manipulating prices to favor one supplier over another. It confirms my analysis that Democrats are attempting to use control freak policies to impose a system of dubious merit that has the potential of destroying our economy in the vain hope of some "magic" energy discovery sometime in the future. This is a reckless gamble of our posterity on dubious scheme based on an unproven belief that the world is getting warmer when most of the evidence of the last decade suggest just the opposite.

You add this dubious scheme with the health care nightmare the Democrats are proposing on top of the stimulus nightmare and it is easy to believe that they intend to deliberately bankrupt the company. They seem intent on doing for the country what they did for the housing sector with their insistence that loans be made to people who could not pay them. Now they are running up debts that this country cannot pay and ruing the economy in the process.

If private individuals attempted the same form of market manipulation the government would be trying to put them in jail.