I'm not certain whether to be pleased or nervous that Congress is bearing down on a new energy bill. Given the lack of reality regarding our energy circumstances that's thus far permeated both Houses, to say nothing of the administration, we might be better off with no bill at all.
Late last week, the Senate passed by a strong 86-8 margin a bill that was a shadow of what many members of the House, who will vote on it this week, had wanted. Gone from the bill was a contentious $21.8 billion tax package. Part of that package would have come from the removal of $13.5 billion in tax breaks over 10 years provided to the five largest oil companies, including ExxonMobil (NYSE: XOM ) , Chevron (NYSE: CVX ) , and ConocoPhillips (NYSE: COP ) . The administration had stated repeatedly that the bill would be vetoed if it reached the president's desk with the tax provisions still attached.
Also dropped were requirements that electric utilities use renewable energy such as solar and wind to generate 15% of their electricity. That measure had been fought by the utility companies, particularly Southern Company (NYSE: SO ) .
Left in was a requirement that the production of ethanol be increased to 36 billion gallons annually by 2022, along with another that would raise automobile fuel efficiency standards to an average of 35 miles per gallon by 2020. The latter mandate has induced displeasure at General Motors (NYSE: GM ) and Ford (NYSE: F ) , as well as at other automobile manufacturers.
My general take on these machinations, Fools, is that they're both counterproductive and dangerous. The fact is that cobbling together an energy bill that ultimately reflects the desires of those with the most votes or the deepest pockets does our citizenry -- and indeed the citizens of the world -- a supreme disservice.
Most of those who've studied the issue carefully, including Exxon and the U.S. Department of Energy, believe that the world will need to produce the equivalent of 115 million to 120 million barrels of oil per day by 2030. I'm convinced that it's likely we won't be able to get anywhere close to that range.
As such, I believe that we need a more organized, less partisan, bigger-picture approach to our conservation and production needs. In the past, I've suggested to Fools that something equivalent to the Manhattan Project that developed atomic weaponry during World War II be considered for energy. I haven't altered my opinion in the slightest on this vital subject.
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