Wayne Brough, Ph.D.

What’s your point of view on this bill and the struggle over the energy bill?

Well, if you look at the bill it is similar to what passed in the house in a lot of ways, and it’s going through the same process as what happened in the house. And there I think you saw a lot of different groups and sort of struggling to see how they would fare under this new legislation. And a lot of it came down to how you allocate these allowances amongst the different groups. And I think that whole process is playing out in the senate right now with the various group who are going to be regulated and who aren’t going to have their emissions cap all, fighting amongst themselves to see who get what and can you come to a deal that everybody’s happy with.

As a consumer group, we get a little bit concerned sometimes because we don’t have a voice in those debates. That happens, it’s all the lobbyist for all the different companies and all the different sectors of the economy, those are the guys that Washington hears mostly from during these deals that are being brokered. As a grass roots group, we’ve done what we can just to play the outside game and we’re back at town hall meetings talking to legislators when they go home, and maybe letting them hear from the grass roots which may be slightly a different message from those people inside the beltway who are trying to work a deal out in the congress.

Your organization is not on Capitol Hill?

For the most part. I mean, we do, we do some things on Capitol Hill and we go there when we can, but our power is in our grass roots members. And so what we spend most of our time doing is facilitating their actions and giving them the information they need and telling them to show up at a town hall meeting raise questions about things like cap and trade, so we do some of the work in Washington, but it’s amplified by our members across the country.

From the grass roots point of view, what are the concerns about cap and trade?

Well, I think clearly the biggest concern is jobs. I mean, we’re in an economy right now where we’ve got unemployment pushing ten percent, and there’s a lot of concerns about what the impacts of a cap and trade type program would do for the economy as a whole, and for individuals and families who may face higher prices for energy. So there’s a lot of uncertainty out there and there’s a lot of concern about are they going to have a job in this new world, are they going to be able to pay their bills in this new world. So, there are a lot of uncertainties and questions that has a lot of people uneasy about the whole thing.

The whole reason this shift in our energy path is being proposed is because of what some people call global warming. Is there a sense among the grass roots that that’s a real concern? Is there urgency attached to it?

I think, and you’ve seen polls out there, and they’re not polls, but if – if you look at the polls about consumers’ concerns or citizens’ concerns, global warming doesn’t really rate that high, so I think with the grass roots themselves, I think it’s pocketbook issues that really they’re concerned about. So this is probably not as prominent an issue in terms of oh, we’ve got to do something now on this and that shows up time and time again when you look at the polls. At the same time, when you look at what’s happening, we’re talking about eight percent of the economy going into this new heavily centralized, sort of regulated, world, and I think that’s a serious concern.

Especially, the scientists hash out, what they say about global warming, but the fact that if we go into his alone and we’re ignoring what Brazil and China and India – who’ve said they don’t want to participate – and that’s where a lot of the growth in emissions is going to occur in the next thirty years. We’re getting very trivial amounts of improvement in the amounts of emission reductions for a very, very hefty price, and I think that’s what’s got consumers a little bit concerned.

So it’s the sense that these other countries like China and Brazil are not participating and therefore why should we?

And I think it’s more just the ‘why should we’ is in at the end of the day are we end up exporting jobs to countries that don’t have these emission caps where they’re going to be China’s producing a new coal fired utility a week, and they’re just, their emissions are growing by leaps and bounds, and if we’re putting, shooting ourselves in the foot by putting caps on ourselves and just at the end of the day exporting our jobs to China I think that’s a concern that does sort of rank with our members and consumers in general.

The other side is saying that this shift to the new energy path that ultimately it will create as many, or more, jobs. What’s your take on that?

My take, and what we’ve looked at, we have concerns about the amount of green jobs that can actually be produced under something like this. Clearly if you look at sort of our mix of energy today the renewable portfolio is such a small portion and so we’re really rolling the dice on innovation to pull us out of something where we’re producing fifty percent of our energy, or electricity, today comes from coal, and if we’re starting to bump up twenty percent of that has to be renewables the technology’s not there yet, there’ s a lot of questions about how you deploy that technology.

And clearly in the long run, I think those things have to be explored, and I think the market is moving in that direction. But to suddenly just put a cap on the fossil fuels and the carbon based fuels and say OK, technology’s going to take care of the problem, I think there’s some real questions about how far we could go, and are we putting too stringent restrictions on the way the economy and the energy sector is evolving.

What’s your take on the lack of technology being there? If we shift subsidies to renewables then maybe there will be the technology to shift to. What’s your take on that?

We’ve always had sort of all of the above approach to energy. We think, given where we are we can’t get rid of fossil fuels overnight. We do the benefits of exploring things like wind, and solar, geothermal, and some of the other opportunities that are out there. And the more the merrier. But I wouldn’t necessarily want to pick winners and losers in the market and I would say, let’s put everybody on equal footing and let them sort of compete and develop a market that way versus trying to steer the market versus letting the market evolve on its own.

I mean, it’s not worked that well in the past when the government’s tried to pick winners and losers. In addition to the up-front costs you see in terms of, OK, we need more solar power, or we need more wind power, then you have to start thinking about now how do we build the electricity grid to go out there and get to those windmills and get to the solar farms. Those kinds of questions entail secondary tiers of costs that can get very, very expensive, and to have the government trying to pick those winners and losers I think is probably not the way to go.

I would let the market sort of drive the technology, and as the technologies become feasible they’ll be adopted because it just makes more sense that way.

Playing the devil’s advocate on what David would say, he would possibly say that the government has bent over backwards to help the development of fossil fuel industries. What he’s saying is now it’s time to do something comparable for renewables. He’s saying fossil fuel dominance, it’s that government gave it a lot of help already.

Right. I don’t know, compared to other industries if it’s been an inordinate amount of help, but clearly there has been, and government programs that have favored fossil fuels in the past. And that’s not something we’re, like I said, we like this sort of level playing field and let all these technologies compete. And there’ s a difference between say tax credits and subsidies, and a tax credit is simply the government’s not going to be collecting as much in terms of revenues from these sources. Whereas, when you’re talking about subsidies, you’re actually taking taxpayer dollars and giving them to various groups.

And we look a little bit more skeptical on these subsidies. If tax credits, again, they can distort the market, and they probably have in the past. And, so I think you have to look at these policies and try to sort of weed through them and balance them out. But there are concerns from our perspective in just putting the government in charge of something. Especially if you look at it in terms of the framework of the [Waxman-Markey], or the [Boxer-Kerry] Bills, where so much of the market is being defined by the government, and so much of it is determined by how the government allocates these allowances to various groups.

It just makes it a much more closed system, and a much more centralized system, that I think would overshadow any of the interventions that have happened in the past.

Scott was saying that one argument that he hears that if you let the market just flow the way it would change isn’t going to happen. What’s your take on that?

Well, I think, you do see the market already moving in terms of adopting these new technologies and you see it in other countries probably a little bit faster than us, but there are a lot of things going on here. But at the same time I think that whole line of argument, it shows the dangers of putting this, this whole energy sector into this cap and trade program that’s administrated through these allowances. Because prices do mean a lot, and getting those prices right is very, very important.

And under this system where you have these political allocations being made you end up with politics and what happens in Washington affecting prices more than really, the fundamental factors of supply and demand in the economy, and when that happens I think if you look across the board in other industries, it never bodes well for the consumer and it really doesn’t bode well for the industry as well, because you have all these allocations being made for political reasons versus economic efficiency, or what’s best for the growth of the economy.

So is there sufficient urgency that would require something beyond just letting the market behave the way it behaves?

I think the urgency isn’t there for a rush to a major new program to regulate the entire energy sector. That is where we tend to be heading and, as I said earlier, when you look at the fact that other countries may not be joining us in that fight we end up putting ourselves way out on a limb in terms of our ability to compete in a global economy.

And I think, if we’re going to look at this issue I think we do have the time, there, right now we’re talking about almost immeasurable benefits in terms of reductions in global temperatures from us adopting this cap and trades program on our own. So, when you’re sitting there talking about really restricting the eight percent of economy. And that eight percent goes into all the goods and services we produce, all the goods and services we consume, to heating our homes, it’s a huge change in the way we would look at how our energy sector works.

And when you take it from this fairly market oriented position that we’re in today to this heavily regulated position, I think we’re taking a step back in terms of policy. Because if you look back before the say in the Johnson years when energy was heavy heavily regulated, consumers did pay a hefty price. And even at the state level today where most of the regulation of utilities occurs there are heavy prices that consumers pay because we’re not in a really competitive market.

So my goal would be to say well let’s open up this market to more competition and allow the competition to drive the development of these new technologies versus this continued sort of regulated monopoly model that we have that has been really harming the ability to compete and get new competitors into the marketplace.

Another part of the Boxer team’s argument is that they talk about seventy percent is coming from overseas, and the cost and the dangers of maintaining that are pretty high, and not just in terms of dollars but in terms of people’s lives.

I mean, foreign oil is we do spend a lot of money on importing oil from overseas, but at the same time we get benefits from it. It’s cheaper for us to do that actually produce it domestically. Now there’s the other side of that is maybe we ‘re doing things domestically that make it difficult to use the resources that we have here at home. We’ve got great coal reserves, we’ve got a lot of shale oil in areas of the country and they’re making new finds.

So we, I think in the future, in addition to looking at what we need to do in terms of making us more competitive in the global market, we have to look at what we’re doing domestically in our energy markets, and there last year there was this whole ‘drill here, drill now’ debate that was going on because we – we were locking up a lot of our resources, and I do think, as part of this reinventing our energy sector we have to think about what are we doing domestically that may inhibit us from using resources we have here at hand, and then, in that sense, reducing our imports of oil because we’re actually have energy resources that are a little bit closer to home.

So, it is a problem that you have to address, but I think looking at ways to promote competition is where we need to be looking.

Is Freedom Works sort of a non-partisan/bi-partisan thing? Are you drawing a lot of support from people attached to both parties?

I think we tend to probably to be more Republican in our grass roots, but we’ve actually picked up a lot of independents. And in fact we do have some Democrats. And the thing I think that motivates the grass roots, and I think we’ve seen it more and more over this past year, is not necessarily the politics of it, but it’s the policy questions and how you address the policy, and so you’ve seen these tea parties that sort of emerged over the summer, and the big 9/12 march on Washington, and a lot of those people were people who were disaffected with not just the Democratic party, but the Republican party.

They saw the bail-outs beginning under the Bush administration, and sort of the big government spending that started mushrooming under the Bush administration, and they were very disaffected with the Republican party. They weren’t standing for the principles of limited government, and so the activists that we represent tend to be more limited government fiscal conservative. And [like] I said, that mainly means Republican, but there’s plenty of independents and Democrats who are sympathetic with us.

Our fundamental philosophy is our name, Freedom Works. We’ve always believed that competition and individuals having the opportunity to transact in a free economy is going to lead to more prosperity than a government run economy. And so our, our motto of “lower taxes, less government, more freedom” is our view, and it’s the view of our members, at individuals given the chance to own their own businesses and interact with each other, are going to do much more to generate wealth and growth for the economy than say more centrally planned, or government leaning economy would.

When the economy started going out and the bailouts began we started hearing a lot about “why were these banks so unregulated?” Regulation isn’t always a good thing, and maybe it usually isn’t, but in the case of the banks do you still have that point of view?

I think especially if you look at what happened with the sort of economic meltdown that we just went through, a lot of that can be traced back to government regulation. You have Fanny Mae and Freddie Mac who, for a long time, everybody saw them going down this road that was getting shakier and shakier, but did nothing to stop them from making these loans and expanding their ability to make these kind of reckless loans at the same time that the ratings agencies, which are sort of granted the authority from the Securities and Exchange Commission, were operating and just sort of rubber stamping these things.

So there was plenty of regulations in place that sort of protected a lot of the bad behavior that was going on. And at the same time there were plenty of laws that were already on the books that could have been used to sort of address some of these problems. So I don’t think it was a question of a lack of regulation. It was again, you start to get into this world where politics takes over from the economics, and that’s what I think happened. If you look at Fannie Mae and how much they, they’re one of the biggest lobbying machines in Washington. And we’re paying the price for those political decisions for making Washington the sort of arbiter of how money is spent instead of having the economy allow people to spend where they want to spend.

It sounds like you spend little time on Capitol Hill. How do you guys help facilitate or give the grass roots a voice? How do you participate in that?

Well, we’ve actually done actually a lot of what Move On has done, and we’ve taking our activists and sort of developed a very active on-line network where we have over four hundred thousand people on-line, we have eight hundred thousand members in general. But just the ability to get people, get the word out to people over the internet using social networking tools, and that’s been sort of a major development that allowed us to really get our grass roots motivated. And I think, you saw it all through the summer with the tea parties and people showing up at town hall meetings, and then ultimately, in September, we had the 9/12 march on Washington, where we had thousands of people from across the country showing up to get their voices heard.

So what we want to do is take the message that we hear here inside Washington, and we do have, we do go up to the hill when we can and try to play on the inside game here inside Washington D.C. But our strength is getting our members from across the country to echo what we’re saying and amplify that voice by showing up in the districts of every congressman that’s making a vote on these important issues.

Is your funding mostly from the grass roots?

It’s a mix. And I think right now it’s probably, the grass roots funding, is just sort of jumped tremendously. Since the TARP bail-outs and since the people have been getting more and more angry about the way Washington’s been behaving. So yeah, we’ve been really just sort of ramping up on that front.

It’s probably a mix of business, individual foundations, and individuals. And I’d say the biggest two are foundations and our activist members who are out there helping us and supporting us in what we do.

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