Energy Policy

One of the main reasons that I decided to run for Congress is my perception that the two major political parties have lost the ability to work together on issues that are of major importance to the future of our country. A prime example is energy policy, or lack thereof.

Energy is very much in the news now, with crude oil future prices leaping past $60, then $70, before topping out near $77 per barrel in 2006. As of this writing, the price has decreased to just less than $70. Perhaps it will go lower. Eventually, it will go higher to $100 per barrel, then $200... I write this with confidence. The only question is when these price barriers will be broken. Petroleum is a finite resource and we long ago passed the point where we could satisfy our demand with domestic production. We presently import more than 60% of the petroleum we consume. U.S. production peaked in the early 1970’s and has declined to about 2/3 of the maximum since then.

The incumbent party’s response to this situation has been bewildering. Our president and vice president each have big oil backgrounds. They were instrumental in 2005 in promoting (and passing) legislation that included billions of dollars of tax incentives for oil companies to spur off-shore production. Oil at that time was around $50 per barrel and had already doubled in price during the previous three years. Oil companies have reaped record profits in the past year (more than $37 billion for Exxon-Mobil alone).

As I wrote in my last blog, I was puzzled by Mr. Neugebauer’s statement that we have abundant energy resources in this country. He never mentioned the finiteness of petroleum reserves or global warming as a consequence of burning fossil fuels. I completely agree that we should encourage the development of renewable energy. But corn-based ethanol cannot eradicate our imports since, at present, it takes nearly as much energy to produce (in the form of diesel, fertilizer, and pumping of water) as the energy yield. There are ways to increase this efficiency, but the word is still out on how much ethanol will help in the long run.

Petroleum is not the only energy problem we face. I was surprised when our electrical rate topped $0.20 per kilowatt-hour in May, a consequence of the spike in natural gas prices. Groceries are going up, presumably because of increased production and transportation costs. Several people are having a difficult time paying these increased prices for essentials.

We need a comprehensive, well-defined energy policy and we need it now. In my next entry I will discuss the actions that I think we should take.