The House recently passed a bill that would rewrite federal energy law. The big winners would be businesses located abroad. The losers? Businesses — and consumers — stuck in America.

The loudest chortles are almost certainly coming from boardrooms of automobile manufacturers located anywhere outside America, such as Toyota and Honda. Congress is permitting sales of automobiles with a fleet average of 35 mph — those resembling the current offerings of some foreign manufacturers — while prohibiting sales of automobiles resembling those manufactured by American companies. The foreign automakers likely did not even have to lobby for congressional munificence.

It need not be this way. Before the energy crisis of the 1970s, few areas of our economy benefited from federal benign neglect more than the energy sector. Left to make investment decisions in response to market prices, the energy sector made reasonable investments that benefit consumer and shareholder alike.

Little more than a generation ago, a risk-averse investment portfolio would have been filled with electric utility stocks such as PG&E and Mirant Energy. But for the past 10 years, these and other utilities have either been in and out of bankruptcy, or at the very least on the brink of bankruptcy. Investment in the energy sector, including utilities, has become risky. This is not because of business risk, but because of regulatory risk from legislators and regulators who do not understand that the interests of businesses and consumers are almost always aligned rather than hostile.

Energy regulation has had episodes of particularly bad advice. In the 1970s, the federal government imposed price controls on gasoline, which predictably harmed the American consumer by causing long gas lines. In the 1990s, several states such as California and Maryland deregulated wholesale electricity rates but kept retail rates artificially low. Not surprisingly, wholesale rates soon skyrocketed. Masquerading as “deregulation,” these state policies condemned many utilities to the brink of bankruptcy, or worse. Just when electric utilities and other energy companies in America have started getting back on their feet, regulatory problems return. With a coordinated message this week, Vice President Gore in Oslo and the United Nations in Bali point their fingers at the alleged source of all of the world’s energy problems: the American consumer. According to Mr. Gore, we Americans use too much energy, although Mr. Gore excuses himself by spending on energy charities. The solution, as Mr. Gore’s insistently lectures us, is to punish the American consumer with regulation that makes all previous government meddling in energy markets look benign.

Rather than guffaw, the House responded with legislation designed more to please Mr. Gore and the U.N. than the American consumer.

Even if Mr. Gore and the U.N. were correct about the culpability of the American consumer, the obvious solution would be to raise energy prices, and the most efficient method would be carbon taxes. But the House does not want to be visibly responsible for raising taxes. It prefers to create complex laws with even more complex rules that harm American businesses and consumers alike without using the “tax” word.

The House bill would mandate increased use of ethanol and other biofuels, and would drive up the price of automobile fuel, breakfast cereals, and cattle feed. Requiring utilities to produce 15% of their electricity from renewable sources would raise prices. Petroleum producers would pay higher taxes to help finance federal programs for hydrogen cars, renewable energy, and other products that American consumers and businesses would not buy on their own. These and other provisions would lead to significantly higher prices, a poorer American consumer, and more than a few bankruptcies along the way.

World energy markets are turbulent. Businesses in all segments of the energy sector face substantial business risk. The House bill would add almost impenetrable layers of regulatory risk. Success in the American energy sector would be predicted less by technological advancement than by governmental familiarity.

In response to the House bill, American consumers are not likely to move to Mexico or other hospitable countries, but many American businesses would. Why invest in a country that mutilates itself with bad regulation? More enlightened countries would welcome the investment.

The Senate is debating the House bill and thus far showing an unwillingness to rubber-stamp it. Let’s hope the sensibility in the Senate prevails.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He is organizing a seminar series at the Hudson Institute. He can be reached at hfr@furchtgott-roth.com.