9.05.12 - XOM-ALL-OF-THE-ABOVE1 - FEATURED

An “All-of-the-Above” energy policy that makes sense for consumers and the economy

The balloon drops and the halls decorated with red-white-and-blue bunting signal that convention time has rolled around again.

America’s two major political parties aren’t just nominating their standard bearers for the November election, they are issuing their platforms as well. Those documents offer a revealing look at where our policy debates may be headed come January.

So it’s been interesting to see that in their platforms’ energy planks, both the Democrats and the Republicans call for what each party describes as an “all-of-the-above” energy policy – a phrase intended to include everything from oil and natural gas to nuclear, coal, hydropower, and renewables.

The specific details of their plans may differ, but the broad language is very similar.

For the most part this development is welcome – the U.S. is blessed with abundant natural resources, after all, and our economy is going to require increasing contributions from a variety of energy sources to support future growth and prosperity. “All of the above” acknowledges that.

Last March ExxonMobil CEO Rex Tillerson discussed the wisdom of an all-of-the-above approach to energy policy, though he added a significant caveat:

In pursuing the “all-out, all-of-the-above strategy,” we need to welcome every voice from every sector of the energy industry as we develop all economically competitive sources.

Note the phrase “economically competitive,” which refers to sources that stand on their own without taxpayer support or market intervention by government. Such measures, though often well-meaning, lead to unintended consequences – consider the recent Solyndra experience or some of the adverse impacts of our nation’s biofuels policies.

Both parties would be wise to keep the phrase “economically competitive” in mind. It can make all the difference between shaping policies that mean well and shaping policies that actually do well for the American economy.