In another clip from the same January 2008 interview with the San Francisco Chronicle in which Barack Obama promised to bankrupt anyone foolish enough to build coal-burning power plants, he also made an interesting admission about his entire energy plan. Obama told the editors that his policies would make energy prices “skyrocket” as the energy industry passed along the exorbitant costs of his cap-and-trade policy:
The problem is not technical, uh, and the problem is not mastery of the legislative intricacies of Washington. The problem is, uh, can you get the American people to say, “This is really important,” and force their representatives to do the right thing? That requires mobilizing a citizenry. That requires them understanding what is at stake. Uh, and climate change is a great example.
You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.
They — you — you can already see what the arguments will be during the general election. People will say, “Ah, Obama and Al Gore, these folks, they’re going to destroy the economy, this is going to cost us eight trillion dollars,” or whatever their number is. Um, if you can’t persuade the American people that yes, there is going to be some increase in electricity rates on the front end, but that over the long term, because of combinations of more efficient energy usage, changing lightbulbs and more efficient appliance, but also technology improving how we can produce clean energy, the economy would benefit.
If we can’t make that argument persuasively enough, you — you, uh, can be Lyndon Johnson, you can be the master of Washington. You’re not going to get that done.
Energy prices skyrocketing will leave the economy in tatters, as we saw earlier this year. While no one doubts the need to start transitioning to better sources of energy, the manner in which that gets done means the difference of whether it gets done at all. A stagnant or receding economy does not produce scientific breakthroughs, especially when government both increases taxes and imposes steep cost burdens on energy. That cuts into both manufacturing and R&D, because as profits fall, fewer dollars go into research — which means that all of these wonderful developments would get delayed, or go unrealized altogether.
We need to plan for the transition better than what Obama proposes. We need to use our own reserves of oil, natural gas, coal, and shale to cushion the economy while we develop the alternatives and build the infrastructure to deliver it. That’s what John McCain proposed in his Lexington Project.
Price shocks on energy is the last thing this economy needs. It would be worse than the taxes Obama promises to impose on investment, and would have the same depressive effect. It’s an utter disaster.