What of this Energy Bill?

There is a lot of talk about the 2005 Energy Bill that passed Congress and the campaign ads in which Patty Madrid criticized Heather Wilson for voting for a bill that contained $2.6 billion in subsidies for the oil industry. Wilson defenders have hit back saying that the Energy Bill was “good for New Mexico” and that all five members of the New Mexico delegation voted for the bill.
So, what is the real story? Well, Dr. Harry Messenheimer recently cut through a little of the confusion by putting “a pox on both houses” by criticizing both politicians for their disinformation about gas prices and the energy industry in general. But, there is even more meat on this bone.
First and foremost, yes, there were very real subsidies in the Energy Bill. In fact, the Energy Bill was far more costly than the $2.2 billion received by the oil industry. The real cost of the Energy Bill is closer to $74 billion. Unfortunately for Madrid, much of that money was spent on nuclear energy, “clean coal,” and the development of “next generation” energy sources.
Is this good for New Mexico? After all, New Mexico is a big producer of energy. Any economist worth his or her salt would say “no, let the market decide.” First and foremost, people need energy from all sources, the only thing subsidies do is alter which form of energy is used and artificially raise or lower demand. Unless the bill specifically encouraged use of energy sources from New Mexico at the expense of other sources of energy, there is no net benefit to the state.
Unfortunately, in New Mexico, the concept of a “free market” might be as rare as a saguaro cactus sighting is within our borders.