Friday, May 16, 2008

Broken Federal Energy Policy

So let's all get this straight: our federal government's plan to address the increasing price of oil is to a) stop adding to our Strategic Petroleum Reserve and b) to ask the Saudi's to produce more oil.

The Reserve is 97 percent full, holding 701 million barrels of crude. The Senate passed the "stop adding" bill by a 97-to1 vote; the House approved the bill by a 385-to-25 vote. This is populism at it finest; knowing this is nothing more than a cheap band-aid effort at best; hoping to show to their constituencies that they share their pain.

Why should the Saudis or any oil producing nation, other than our own, produce more oil, just because it is impacting the cost of our transportation and our economy? Why should they cave in to America's short-term whining when they ought to be looking out for their own long-term self-interests?

Obviously our elected officials are willing to wave their hands pretending to be taking the issue seriously. However they are unable to do the serious work of creating sound energy policies that includes exploiting our own known resources while finding new resources.

Oil usage and oil demand are not going to diminish in our lifetime. Alternative sources of energy should be part of our strategic energy plan. Conservation and efficiency also, but to assume they are going to solve our energy problems is naive.

It is unreasonable to hope the price of oil will allow our gasoline prices to drop back to the $2/gallon range, nor is it likely to go back under $3/gal. The world has changed, and it has done so quickly. Global demand has increased and there is no turning back.

There are some real things we can do that will impact the longer-term price of oil, namely: i) drill in our established oil fields (ANWR and off the California), ii) mine oil shale, iii) build new refineries, and iv) build new nuclear power plants. This is taking matter into our own hands -- not depending as much as we do on foreign sources.

Until we create a sane strategic energy plan, void of extreme environmental restrictions, we will continue to pay increasingly higher prices for our energy. We will become more indebted and dependent on foreign entities. And this is what scares me the most -- losing, little by little, our national sovereignty.

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