A Conservative Viewpoint - Energy Independence - Congress Must Act

Article by Bob Steinburg
- Edenton, North Carolina: Cradle of the Colony

The United States currently imports 60 percent of the oil we consume. And with the price of gasoline approaching $4 a gallon, many Americans are suffering. We see ourselves as victims in a cruel conspiracy caused, in part, by our nation’s involvement in an unpopular war in the oil-rich Middle East.

Others say it’s the oil companies that are responsible. They feel consumers are being taken advantage of and accuse oil companies of price-gouging.

Presidential candidates Hillary Clinton and John McCain suggest that Congress temporarily suspend the 18 cents-per gallon federal gas tax this summer to give consumers relief. This could do more harm than good. The proposed tax holiday would reduce the collecting of tax revenue that is sorely needed to repair, expand and restore our nation’s ageing roadways and bridges.

Forty years ago, world oil reserves were largely owned by international oil companies based primarily in the U.S. Today, 80 percent of the world’s oil reserves are controlled by foreign governments. Only six percent of reserves are held by private companies.

The emerging economies of China and India compete with us for oil in the world market. Add the declining value of the dollar against other currencies and American consumers pay more for crude than countries with stronger currencies.

It’s not just a matter of supply and demand. Other factors come into play in determining the cost for a barrel of crude, like the war in Iraq, civil unrest in Nigeria and political uncertainty in Venezuela – all sources of foreign oil we depend on. Even hurricanes have affected U.S. and Mexican refinery operations.

As the world’s demand for oil increases – by 1.3 billion barrels of oil per day by next year – we are faced with making difficult decisions. We can either continue going down the same irresponsibly dependent path we’ve been on for decades or we can more aggressively pursue energy independence.

Increasing taxes on the big oil companies is not the answer. In fact according to the American Petroleum Institute (API) only 1.5 percent of industry shares are owned by company executives. Tens of millions of middle-class stockholders own the rest.

Anyone with money invested in a 401-K or a mutual-fund likely has oil company shares in their portfolio. When politicians like Hillary Clinton and Barack Obama talk about taxing “Big Oil” on their “record profits,” they’re talking about taxing us.

Increasing oil company taxes would restrict the money needed to search for new oil and natural gas reserves to meet our ever-increasing demand.

The oil we’re using today is a result of exploration and investment made by oil companies’ years ago. Billions of dollars are spent in search of new sources of supply that, if discovered, may not reach the marketplace for nine or ten years. The largest share of oil company earnings is spent on exploration and adding new property and more technically-advanced equipment to its operations.

Although no new refineries have been built in the U.S. since 1976, technological upgrades have increased our existing refining capacity by 20 percent since 1985. Current domestic refining capacity is projected to increase by 800,000 barrels per day within two years.

Building new oil refineries or expanding existing ones is among the most affordable and reliable ways to increase supplies and lower prices, according to H. Sterling Burnett, a senior fellow with the National Center for Political Analysis. But he states that it’s the emission controls and clean air regulations that have forced some refineries to close and made building new ones difficult. Construction of a new refinery in Arizona has been delayed since 1997 over concerns over its impact on air quality, even though it has received the required permits.

Oil companies also continue to spend billions researching alternative sources of energy such as wind, solar, geothermal and landfill digester gas. Even if all of these potential alternative energy sources come to fruition it is still predicted that by 2030 more than half of the world’s energy demands will continue to be met by oil and natural gas.

To lessen this country’s dependence on foreign oil our government needs to adopt an energy policy that emphasizes conservation while allowing oil companies access to the abundant supplies of oil and natural gas we have here. Reducing our oil imports would have a major affect on the sensitivity of the U. S. economy to global oil conditions.

It is estimated by API that there are 112 billion barrels of oil potentially available in the U.S. That’s enough to power 60 million cars for 60 years. Those same areas are estimated to contain 656 trillion cubic feet of natural gas or enough to heat 60 million homes for 160 years.

Consider this: If our government allowed us to start drilling at home tomorrow in areas like Alaska, the offshore Gulf, Atlantic and the Pacific regions, along with the onshore regions within our borders, we still would not realize the benefits for several years. But doing nothing guarantees we will remain hostage to foreign sources of oil indefinitely.

Eight years ago, President Bush asked Congress to allow opening up the aforementioned regions to drilling. Had Congress acted then, new supplies of oil and natural gas would be coming to market today, prices would be less volatile here and abroad and we would be further along the road to energy independence. Now Congress needs to get it right.

Bob has only overlooked one aspect of this problem. The knee jerk reaction of the enviro-extremists who demand we cannot participate in the world wide search for oil for environmental reasons. The short sighted premise that our nation, being the sole nation not drilling for oil, somehow improves the creation of greenhouse gases problem is not a credible argument. Other countries are drilling for oil as fast as they can and searching for oil diligently. Brazil recently discovered 3 of the largest oil fields in the world, off their Atlantic Coast. They have every plan to develop them as quickly as they can. America not searching for or drilling for oil, the long term demand of the Democrat Party which has left us with this problem, simply leaves us subject to energy blackmail by Chavez and other tyrants on the left. Nothing is accomplished by our not searching and drilling except national damage to America.

However the premise man is causing global warming (on which this stupid agenda is based) . . . is even more ignorant. The slanderous insults hurled by enviro-extremists at anyone who dares to question the argument that man is causing global warming should be a clear sign that it is not, as these extremists claim, “settled science”.

Before anyone continues to argue the case that greenhouse cases cause global warming they should be morally required to answer the following questions.

Since Mars is warming up also, how is man causing that?

Since we are not yet at the temperatures reached during the renaissance, a period of man’s great moves forward due to the longer growing season dramatically increasing food production, why will warmer temperatures (even if they happen) not be a good thing?

Why do all the global warming advocates exclusively build their models on recent temperatures of the last 150 years, a period when we were still coming out of the "little ice age" and therefore certain to be increasing, ignoring the multi thousand year models and multi million year models that prove their theories are bunk?

Why, after repeated proof that their models generate the same results when fed bogus and contradictory data as they do when fed actual data, do they pretend their models are not fraudulent attempts to con the populace?

There are no answers to these questions that do not prove the global warming is caused by man extremists have a political agenda that they are hiding from the people. There is no truth to their claims.

Short term, we need to stop buying oil for the strategic reserve, accept a summer suspension of gas taxes at both federal and state levels, fund this suspension by cutting back on other than transportation expenditures and abandon the food shortage inducing bio-fuel insanity.

Medium term we must advocate a rational program of building refineries and standardizing the gasoline formulas across the states to return to a national market (eliminating spot shortages) as a critical step to energy independence.

Long term we must search for oil on the Atlantic Coast, Eastern Gulf of Mexico, Pacific Coast and in Northern Alaska to stop our reliance on oil producers dedicated to the destruction of our nation. In addition we need to push for increasing use of clean coal, conversion of oil sands and shale oil, and invest in proven nuclear plant designs on an expedited basis. We should even search for cost effective alternative energy sources. The key here is cost effective. Any attempt to subsidize expensive energy and call it cheap is simply a fraud on the American people.

All these actions are needed. However there is little chance this will happen until more people join the battle to denounce the global warming fanatics. This is the most critical part of the short term need. A total lie has been sold to a huge part of America’s public. Until that idiocy has been refuted, there will not be the political will to do any of the things Bob or I propose, short, medium or long term.