Monday, April 25, 2011

US Energy Policy Simplified For Politicians To Understand (Updated 4/28/11)

With the price of food and other commodities on the rise and the national average for a gallon of gasoline at about $3.85 and climbing, Americans are feeling the pinch and getting angry. Yet the President says there’s no “silver bullet” that will quickly bring down gas prices. In addition the government tells us that inflation is low, because it excludes food and energy from the calculation.

Well the President and the administration are lying to the American people and many of us are fully aware of it. They tell us with a straight face that the US only possesses about 2% of the world’s energy reserves. They also tell us that more domestic drilling would have little affect on the price of gasoline and that any new drilling wouldn’t affect supply for at least 10 years. All lies!

The truth is the US has more untapped energy reserves than any other nation, especially if you include ANWAR, the outer-continental shelf, the Gulf of Mexico, untapped reserves in the mountain states and reserves of coal, natural gas and oil shale. The US has 8 times more oil in the form of shale alone, than exists in all of Saudia Arabia.

If we had started additional domestic drilling 5 years ago, the last time the national average for gasoline was approaching $4 a gallon, that crude would be flowing by now. And anytime a US President says that we are going to drill for more US energy, the price of crude immediately drops. Much of the speculation on oil futures is emotionally driven. If traders believe that supplies will increase in the future, the price falls.

So here is the very simple plan for US energy policy going forward for any politician, or dare I say leader, bold enough to follow it:

1. Stop printing money. Oil is traded in US dollars. When the dollar is weakened and devalued by printing too much currency, the price of oil rises.

2. End altogether subsidies for all “green energy” (i.e. wind turbines, solar panels, ethanol, bio-diesel, etc.).

Wind turbines only work when there is wind, they kill birds & bats so environmentalists hate them.

Solar is only good when the sun is shining and it takes vast farms of solar panels to generate a profitable amount of energy, so again environmentalists hate them and complain about them marring the landscape.

Making ethanol puts 37% of our corn crop into our gas tanks, raising the price of feed for livestock and in turn for food. It also takes more energy to produce a gallon of ethanol than you can extract from it. This means the more ethanol the government mandates the oil companies to blend into our gasoline, the less miles per gallon you get for increasingly expensive gas. (SEE UPDATE BELOW).

Ironically in many areas of the world deforestation is occurring to make more farmland to grow more corn to produce ethanol. This has the affect of increasing carbon dioxide levels that environmentalists would have us believe are contributing to “manmade climate change".

If these “clean” energy technologies can be made efficient and profitable, so be it. But the government should not be subsidizing them to artificially prop them up.

3. Phase out all tax credits for oil, natural gas and coal companies while simultaneously phasing out oppressive regulatory structures. These are all well established industries. Without subsidies propping up the “green” energies these industries should be able to be profitable, without tax credits from the government, if unnecessary and cumbersome regulations are removed.

4. Build more refineries in the United States and make it easier to modernize the existing ones. The US has not built a new refinery in more than 30 years and modernizing the existing ones is a regulatory nightmare. We don’t have enough refining capacity to meet our growing needs.

5. Open up more of ANWAR for drilling. The Trans-Alaskan Pipeline as been proven safe and the caribou love it, they snuggle against it for warmth. The area in question is relatively small but has much energy to yield.

6. Issue more leases for drilling in the Gulf of Mexico in both shallow and deep water, including 7-10 miles off the coast of Florida. If we enforce our safety regulations and put in place the equipment to mitigate any spill it is safe to drill for oil, much safer than shipping oil from half way around the world on tankers, where most accidents actually happen.

7. Disband the US Department of Energy. The Department was created during the Carter Administration allegedly for the purposes of creating a coherent US energy policy and making the US more energy independent. It has done neither, but has cost the American taxpayers billions of dollars over the course of the past 3 decades, while creating no solutions and a vast wasteful bureaucracy.

8. Reign in the EPA and end the lie that carbon dioxide is a pollutant or “greenhouse gas”. Al Gore’s convenient lie is that carbon dioxide levels have historically risen AFTER a corresponding increase in global temperatures, not before. The very idea that humans and animals exhaling pollutes the atmosphere defies all logic and common sense and is not supported by science. It is quite simply green-propaganda.

9. Inform Saudi Arabia, Iraq, Kuwait and other OPEC nations that, since we are now producing our own domestic sources of energy, we will no longer be held hostage by their cartel. Those countries that we have freed or shielded from aggression with our military can sell us oil at a fair market price or lose our protection and the right to buy our military hardware. We should not and will not be buying oil from countries like Venezuela and Iran that are hostile to US interests and support terrorism against our allies and/or us.

10. Build more nuclear power plants in the United States, taking care to build them in areas that are geologically stable and relatively seismically inactive. If the French cansafely get 80% of their electricity from nuclear energy, the United States should be able to achieve similar results.

11. Free American innovators and entrepreneurs to explore other alternative energy sources that we haven’t even thought of yet. When left to it’s own devices the American entrepreneurial spirit can achieve more than any government program ever could.

None of this is complicated; it’s just common sense and good economic policy, foreign policy, national security policy and environmental policy as well.

It requires genuine leadership and the willingness to put the interests of the American people and our nation before the interests of foreign dictators and so-called “environmentalists”.

Steven Rosenblum is the host of 'Conservative Republican Forum' & 'CRF Weekdays' on BlogTalkRadio and the USA Talk Radio Network. He was also the 2010 GOP nominee for Florida State House-District 89.

UPDATE (4/28/11): We interviewed Congressman Steve King (R-IA) this afternoon on 'CRF Weekdays' and asked him about the amount of corn being used to produce ethanol and ending subsidies for it. Congressman King gave an excellent and in-depth answer on the subject of producing ethanol, with more up-to-date information than I had when I originally wrote this article.

He explained that the corn being used to produce ethanol is not corn grown for human consumption, but for livestock feed. He also explained that the starch is used to make ethanol, while the protein is used to make high quality feed. Therefore the amount of loss is negligible and does not affect food prices.

In addition, he explained that while it was true in the early days of ethanol production that the process was inefficient and it required more energy to produce a gallon of ethanol than you could extract from it, that is no longer the case. In fact, it now requires less BTUs to produce a gallon of ethanol than it does a gallon of gasoline.

Furthermore, since the ethanol industry can now compete with the oil industry, both he and the ethanol producers now favor a "soft landing" for ethanol subsidies. In other words they want to phase them out.

You can hear the complete interview with Congressman King by clicking HERE.