WSJ.com - High-Octane Amnesia

JERRY TAYLOR and PETER VAN DOREN write of the new coalition to encourage more energy independence through government intervention in the WSJ.com

The Energy Future Coalition -- the operation overseeing this campaign -- is really an 'Energy Past Coalition' that suffers from a severe case of amnesia. The stated policies that this crowd promotes -- sharply increased subsidies for domestic alternative-fuels industries and aggressive government-mandated conservation -- were textbook economic fiascos when adopted 30 years ago and will fare no better were we to enthusiastically re-embrace them again.

They go on to discuss the government sponsored Synthetic Fuels Corporation which ended up only building one goal gasification plant using $1.5 Billion in federally guaranteed loans and had to be sold for a mere $85 million after bankruptcy. Another example of how poorly government interferes in the energy market.

Government solutions just don't work to solve market problems.

Unfortunately, when it comes to government intervention in energy markets, past is prologue. Ethanol and other forms of biomass energy -- the modern iteration of the Synfuels program embraced by the Energy Future Coalition -- are an open joke among economists and generally opposed by environmentalists. Already on the receiving end of about $1 billion of federal largesse per year, ethanol requires more energy to produce than it yields upon combustion and produces more worrisome air pollution than even conventional gasoline. In the electricity sector, biomass fuels generate more pollutants than natural gas-fired electricity (the fuel that biomass would likely displace), according to a recent survey of the literature by economists Thomas Sundqvist and Patrik Soderholm.

They hit the proverbial homerun with their closing:

However one feels about foreign oil, the belief that government can intelligently pick winners in energy markets or promote conservation in an economically reasonable manner is belied by an avalanche of real-world evidence. The best way to weaken al Qaeda is by killing bin Laden and those who support him, not by subsidizing GM to make cars they wouldn't otherwise make.