McCain vs Obama on Energy Policy

While watching coverage of the DNC and RNC I was pleased to see that energy has emerged as a central issue. Back in 2004, even with the Iraq War as one of the main flashpoints of the campaigns, energy wasn't even on the national conscience despite the fact that the war is being fought on top of an ocean of oil. Anyways, with gas hanging around $4 per gallon Americans have finally realized that if we don't change our oil guzzling ways and go GREEN, we're in for a rude awakening once oil starts to run out. So now that energy is on the table as a critical issue in the 2008 election, let's compare we're the candidates stack up on energy policy:

	OBAMA	McCAIN
ENERGY PRICE RELIEF	• Enact a windfall profits tax on oil companies to provide a $1,000 emergency energy rebate to American families. • "Oil Swap" : Swap a limited amount swap of light oil from the Strategic Petroleum Reserve in exchange for heavy crude oil to help bring down prices at the pump.	• Supported a temporary suspension of the 18-cents-per-gallon federal gasoline tax for the summer of '08. • Opposes use of government oil reserve.
OIL	• Proposed a 50% windfall profits tax of the five largest U.S. oil companies to pay for "rebate" to the public to help out with high energy costs. • “Use it or Lose It” Approach to Existing Oil and Gas Leases. Oil companies will be required to develop the 68 million acres of land (>40 million of which are offshore) which they have already leased and are not drilling on.	• Opposes windfall profits tax on oil companies. Believes this would ultimately result in increasing our dependence on foreign oil and hinder investment in domestic exploration.
OFFSHORE DRILLLING	• Would consider limited off-shore drilling only if needed to pass his broader energy plan which includes a windfall profits tax.	• Expand domestic oil and natural exploration. • End drilling bans on all offshore waters beyond 50 miles from shore, as long as state has say about energy development of its shores.
GLOBAL WARMING	• Mandatory reductions of carbon dioxide and other greenhouse gases by 80 percent by 2050, using a market-based cap-and-trade system. • Under the cap-and-trade system, all pollution credits will be auctioned, and proceeds will go towards investments in a clean energy, habitat protections, and rebates and other transition relief for families.	• Mandatory reductions of carbon dioxide and other greenhouse gases by 66 percent from 1990 levels by 2050, using market-based cap-and-trade.
CARS	• Put 1 million plug-in hybrid cars on the road by 2015. • Increase fuel economy standards 4% per year while providing $4 billion for domestic automakers to produce these vehicles. • $7,000 Tax Credit for Purchasing Advanced Technology Vehicles. • Establish a National Low Carbon Fuel Standard to promote R&D into the production of low carbon non-petroleum fuels. • All new vehicles by 2012 will be FFVs. American FFV's typically run on ethanol/gasoline mixture with 85% ethanol component (E85).	• Current fuel economy standards are adequate however are not strictly enforced. Would have stiffer penalties for carmarkers who don't comply. • Supports plug-in hybrid. Offers a prize of $300 million to the inventor of a better battery. • $5,000 tax credit for customers who buys a zero carbon emission car. • Supports FFVs. His goal is to require of 50 percent of new cars be FFVs by 2012.
ALTERNATIVE FUELS	• Proposes $150 billion, 10-year clean energy development fund for biofuels, wind, solar, plug-in hybrids and clean-coal technology, and electric cars. • Require all utilities to produce at least 10 percent of their electricity from renewable energy sources such as wind, solar, biomass, or geothermal by 2012	• $2 billion per year until 2024 to develop carbon capture and other clean coal R&D. • Tax credit equal to 10% of wages spent on R&D to promote energy research. • To add "urgency to the mission", offer a prize of $300 million to the inventor of a battery package of a size, capacity, cost, and power far surpassing existing technology.
NUCLEAR POWER	• Nuclear power must play a role as they constitute "more than 70% of our carbon generated electricity". • Opposes the Yucca Mountain nuclear waste dump • Support federal efforts to look for another long-term approach to dealing with reactor waste. • Opposes nuclear-waste reprocessing	• Build 45 new nuclear power plants by 2030, with eventual goal of having 100. • Strongly supports Yucca Mountain project. • Supports research into nuclear-waste reprocessing.
ENERGY EFFICIENCY	• Weatherize 1 million energy-inefficient homes a year via LIHEAP. • Overhaul appliance and other energy efficiency standards with goal of reducing building energy use by 25 to 50 percent. • Invest in a "smart grid" power infrastructure to increase electricity savings and accommodate 21st century energy requirements.	• Develop "smart grid" power lines to increase electricity savings. • "Greenify" federal buildings (which are the largest energy consumer on earth)

After viewing each candidate's plan, the biggest differences appear to be whether energy companies should have their windfall profits taxed and how regulated they should be. Such a tax and stiffer regulations would discourage oil exploration and development and could potentially nudge energy companies towards developing a viable alternative energy future. On the other hand, oil companies profit margins are on par for an S&P500 company, and would raising taxes on Big Oil really make gasoline more affordable for consumers? The answer is especially tricky, with stability in Middle East in question and no cheap alternative fuel source readily available.

Normally, I would be conflicted about the government stepping in and increasing taxes on an entity that's excelling at making $$$$$, except that we’ve paid Big Oil big bucks to do it in the form of tax breaks and subsidies back when gas was $1 per gallon.

Sources:
1) New Energy for America plan from http://www.BarackObama.com
2) McCain's Lexington Project from http://www.JohnMcCain.com