Rick Perry's Energy Plan is Good For Growth


Texas Gov. Rick Perry is swimming upstream in his quest for the Republican nomination for president, primarily from his weak performances during several debates. To improve his odds, three weeks ago he gave his first policy speech, titled “Energizing American Jobs and Security.” Energy is that important, and it is a breath of fresh air that his analysis and prescription is 180 degrees from President Barack Obama’s government-knows-best approach to energy and the environment. Although past action on energy related issues by the governor has been mixed, the path he outlined is a positive first step to get the economy growing again.

Perry’s plan focused on four objectives that promise economic growth and numerous jobs in America: opening American oil and gas fields for exploration that are currently off limits; eliminating activist regulations already on the books; reforming the EPA and return greater regulatory authority to the states to manage air and water quality rather than imposing one-size-fits-all federal rules; and leveling the competitive playing field among all energy producers. Perry concluded his address by stating that his plan aims to “Make what Americans buy, buy what Americans make, and sell it to the world.”

I agree with these proposals. In particular, getting rid of all energy subsidies and tax incentives across the board will allow the market to direct the allocation of resources to energy sources that are profitable without government intervention. Perry’s case for energy expansionism, however, is weakened by his past energy actions as governor and by the interventionism of other Republicans.

The MasterResource blog has documented the role of Perry in the (artificial) Texas wind power boom. In October 2006, Perry announced $10 billion in commitments from wind developers to increase installed Texas wind capacity by about 7,000 megawatts. And to get it, he committed the state to a $5 billion, and now $7 billion, transmission project. 

“While Perry’s been governor,” said the American Wind Energy Association, “We’ve had a business climate that allows a generator to build, connect to the grid, and sell power. Under those conditions, wind has been able to compete and bring benefits to Texas consumers and to the environment." As Paul Sadler, executive director of the Wind Coalition, told the New York Times several months ago, “He [Perry] has been a stalwart in defense of wind energy in this state — no question about it.”

Perry is hardly alone among Republicans, supposedly the party of free markets and small government. This was brought to light in a recent Wall Street Journal article stating, "It used to be that Republican governors competed for business by lowering taxes and regulations. Then … a lot of state tax dollars started flowing to Solyndra-like ventures … Indiana’s Mitch Daniels, Mississippi’s Haley Barbour, Louisiana’s Bobby Jindal … have happily staked their taxpayers’ dollars on green bets.”

Overall, Perry is a politician, not a principled free-marketeer. These steps outlined in his plan are positive, but it is unfortunate that his record shows he stepped right into the unholy George W. Bush/Ken Lay wind power nexus and chose to expand it. But times have changed, and the tradeoff between pro-job, real energy and ‘green energy’ has never been starker. The only path forward for economic growth and prosperity is for the government to get out of the way.

Photo CreditGage Skidmore