Now that Congress has gone into recess for the end of summer, what are we going to do about the energy situation? At this point, I’m getting tired of hearing that $4.00 gas is good for me. How can it be a good thing for Americans to spend less of their money on other goods and invest in their tanks of gas? Is it a good thing that transportation costs have skyrocketed my food bill? Is it a good thing that many Americans have shortened their vacations and reduced their entertainment expenses? Is it a good thing for the working poor to struggle between putting groceries at home and fueling their cars to get to work?
Apparently, our congressional leaders and a presidential candidate say the answer is yes. While our Speaker of the House is trying to “save the planet,” the rest of the world is trying to find more oil and energy. Let’s look at some recent examples:
- Egypt last week announced the start-up of a $9 billion oil refinery and petrochemical complex, to be located on its northern coast. The complex is expected to start operating in 2010 and be completed in 5 years. The facility will refine 350,000 barrels of oil per day.
- The Tupi deepwater oil field is located off the coast of Rio de Janeiro, one of the best tourist destinations in Brazil. Last November, the Brazilian government announced that the location could contain five to eight billion barrels of oil. The Tupi oil field is expected to start producing 100,000 barrels of oil in 2010, according to Petrobas, Brazil’s national oil company. Petrobas hopes to bring production to one million barrels a day in about ten years.
- Finland is building a 1600 megawatt nuclear power reactor. Currently, the country gets 28 percent of its electricity from nuclear power.
- Japan is working to increase its nuclear power output from 30 percent to 37 percent by 2009 and 41 percent by 2017.
Now, aside from threatening to sue the Saudis and adding more taxes to oil, what has the US government’s energy policy done? Let’s see some examples:
- From 2000 to 2007, domestic crude oil production fell 12.4 percent.
- Through a congressional mandate, 85 percent of the outer continental shelf is off-limits to oil exploration. The Outer Continental Shelf is estimated to contain 90 billion barrels of oil
- The Arctic National Wildlife Refuge (ANWR) is estimated to hold 10 billion barrels of oil; In 1995, President Clinton vetoed a bill authorizing oil production on 2,000 19.6 million acres.
- US Senator Ken Salazar of Colorado inserted language into the general spending bill last December that places a moratorium on the enactment of rules for shale development on federal lands. The Green River Formation is estimated to hold up to 1.1 trillion barrels of oil shale.
- Under the terms of the 2007 energy bill signed by President Bush, the US is now required to blend 9 billion gallons of biofuels into the gasoline supply. The mandate is met primarily with corn-based ethanol. At the start of the biofuel mandates, corn was $2 a bushel. The price of corn is now just over $6 a bushel.
It seems that the more our government gets involved, the worse the situation becomes. And where did common sense go? If I see that you need water, I would not send you to a desert to look for it. Yet that is what we do with our oil exploration. Try to find it where we don’t know if it exists.
From 2000 to 2007, US oil companies increased exploration well drilling by 138 percent (on those 68 million acres of existing leases); oil production still fell to its lowest level since 1947. The American Petroleum Institute reported that oil companies had the most second-quarter oil well activity since 1986.
The United States has successfully developed other forms of energy; clean coal plants, nuclear power, natural gas plants, solar and wind power. Our most efficient and cheapest forms of energy production are under constant attack from the environmental movement. The United States uses 760 gigawatts of power plants to meet current needs. The North American Electric Reliability Corporation (NERC) estimates that we will need 135 gigawatts of new capacity over the next 10 years. As of now, only 57 gigawatts of power plants are planned. Because?
- 59 coal plants were shut down in 2007 due to anti-coal activists.
- US natural gas production is beginning to decline due to environmental restrictions on exploration.
- The National Resources Defense Council (NRDC) successfully shut down 13 natural gas power plants in Southern California.
We have the best scientists, engineers and technicians in the world. Give them a chance to solve this challenge and they will. There are many private companies working on new technologies to bring them to market. If our government is going to pick winners and losers through subsidies, many companies will not enter the market.
For example, NuScale Power, a new company based in Oregon, is seeking federal authorization to begin its project to build a mini nuclear reactor. The reactor can power 45,000 homes, is 65 feet long, and has no visible cooling tower. NuScale claims that these reactors are maintenance free and do not need to be refueled. At the end of its useful life of about 30 years, the plant is returned to the factory.
This kind of technology should be welcomed and encouraged by everyone. With a small footprint and zero carbon emissions, these plants could replace many traditional coal and gas power plants.
This situation does not require a billion dollar bailout from our government. Nor does it require raising taxes on oil companies. Remember, we tried the windfall tax under President Jimmy Carter. That led to a 6 percent drop in oil production and a 15 percent increase in oil imports, according to the Congressional Research Service.
If Congress were to step back and allow all of energy companies to explore and develop energy responsibly, we would not have to struggle with high energy costs. carry all subsidies and let the market decide which means of energy are cheaper, more environmentally friendly and more durable. American technology is more than capable of producing efficient energy and protecting the environment.
Instead of trying to spend more of my tax dollars, why doesn’t Congress spend more of the time we pay them to fix the regulatory landscape for energy production? Congress needs to enact some common sense environmental regulations. If they do, the marketplace will provide us with a diverse supply of energy that is reliable, American-made, and affordable.
It’s time to streamline and simplify this process, now.