Solving The Energy Crisis
Unless you’ve been asleep for a few years or ride a bicycle, burn wood in the winter and think air conditioning is the use of a funeral fan, you know that this country and much of the globe faces an energy crunch of major proportions.
People are lazy and selfish….I’m sure that’s not a never before considered revelation. As a result, people only move from point A to point B when the pain of remaining at point A is greater than the pain of moving to point B. Well, we as Americans are rapidly approaching the requisite level of pain to cause this movement. I say approaching because we are not there yet. The problem is that the lead time required to effect most of the viable energy solutions is so great that we can’t wait until we are there to do something or the pain will be insufferable.
We aren’t there because gas is ONLY $4.00 a gallon. Yes I said ONLY. All over Europe gas is approaching $10.00 a gallon. Years ago Western Europeans began driving more fuel efficient cars to combat high fuel costs at the pump. People in the US talked more about gasoline costs when the price approached $2.00 than they did when it was $3.00 – $3.50. I think we have just become numb to the escalation. It now has our attention though. If the cost of gas moves to parity with Europe we will surely realize that the moving to point B has now become less painful than remaining complacent at point A. But waiting until then may be economically catastrophic.
Realizing the risk of so doing, but stupid enough to place myself out on a prognosticating limb I believe that oil and gasoline will, in the short term, decline in price. This would be a technical drop, not precipitated by fundamental factors but caused by some of the global trading market forces. Fundamentally, the globe still faces a long term shortage of the fossil fuels which, after the cracking and refining process, find their way to our car’s gas tank. We have only to look to Asia where the geometric growth of China’s and India’s economies to see that we are competing with populations and energy demands that potentially dwarf ours. Do the math…it’s scary. It’s hard to make a case for oil prices to not increase significantly in the years ahead. As a matter of fact, some forecasters see world demand increasing 40% by 2030 with 28% of that increase coming from the US.
Before looking at the efficacy of the numerous alternative solutions we have, let’s consider the circuitous route that got us to this point. First, don’t waste your time and breath piling on the oil companies for their big profits. Are they making a lot of money? Yes! Should they? Yes! It’s similar to the ethical drug companies and their drug research that have brought us Prozac, Advair, polio vaccine and other drugs that have significantly changed our lives. They must be allowed to profit from their substantial investment and risk. Oil company profit margins are only slightly more than grocery retailer’s and significantly less than Apple, Microsoft and other technology companies. Investment in refineries is the issue in the oil business. The US hasn’t built one since 1976 and there is none on the horizon. For over thirty years we have sat idly by while the Mid East and, OPEC, their version of the Mafia, has increasingly held us hostage. Those who say President Bush or any other politician can saunter into the alcohol free parlor of the Saudi Royal Family and strong arm them into increasing production, are smokin’ their socks. They have us by the knickers. Ethanol was touted as the perfect antidote for our energy sickness. The only problem is that by diverting corn to ethanol for fuel causes a shortage of foodstuff which, in turn, causes an increase in commodity prices. Darn those unintended consequences!
Investor’s Business daily recently reported on the irresponsible Democrats in Congress calling it the worst Congress ever and the prime cause for our oil problems today. Following are a few of the problems they are saddled with either causing or refusing to fix.
Off Shore Drilling…The environmentalist lobby and their partner, the Democratic Party, has prohibited our drilling in locations immediately off our shores that are currently being drilled in by China, Cuba, Canada and others. Thanks Nancy Pelosi and your restrictionist Congress. These areas must be opened up to our drilling. The Ewell Gibbons nuts and twigs crowd has to be thwarted.
Drilling in ANWR …..It is reported that there is an estimated capacity of one million barrels of oil a day from this Alaskan source alone. This translates to 27 million gallons of fuel. The environmentalists and the Democrats will not allow this drilling. An additional 115 billion barrels of oil and 635 trillion feet of natural gas is estimated to be located in the outer continental shelf. Tapping this would move us from 11th to 4th in the world in terms of known reserves.
Oil Shale Development…Development of oil shale fields in Colorado would aid the crisis. Are you listening libs?
Nuclear Power…We have only 100 or so nuclear power plants….no increase in over a decade. Nuclear energy production and disposal of waste has, in recent years, experienced a manifold increase in safety. Less than 20 % of our energy is produced in this manner compared to 40% in many European countries. These plants are expensive but they produce energy at about $1.72 per kilowatt hour versus $2.37 for coal and $6.35 for natural gas.
New Refineries…..The last refinery built in the US was in 1976. The EPA requires at least 15 unique fuel blends that are sold in different regions of the US. This stretches the refinery process so that the slightest glitch severely restricts production. Our already stressed refineries would be severely effected by a hurricane that caused massive damage like Katrina almost did. Congress has turned a blind eye to this problem.
Tax Increases….Windfall profit taxes and some of the other “great ideas’” of Congress would put a further damper on oil production not serve to increase it.
Solar Energy….There are a number of companies with emerging technologies touted to make a big impact on energy resources. We need to provide tax breaks to permit this to be developed.
Hydrogen Powered Machinery…Likewise, tax breaks need to be permitted for those companies with promising hydrogen technology.
We must be alert to our energy dilemma and be politically active forcing our elected officials to lead, follow or get the heck out of the way.
