Thursday, July 7, 2011

Laurence M. Vance: Whither U. S. energy policy?

  President Obama has authorized the release of 30 million barrels of oil from the Strategic Petroleum Reserve (SPR). The oil reserve is currently at a historically high level of 727 million barrels. “We are taking this action in response to the ongoing loss of crude oil due to supply disruptions in Libya and other countries and their impact on the global economic recovery,” said Energy Secretary Steven Chu.

  The president has also called for a one-third cut in oil imports by 2025, wider use of natural gas, incentives to use natural gas to fuel fleets of vehicles such as city buses, greater production of biofuels, the establishment of four commercial scale refineries producing cellulosic ethanol or advanced biofuels within the next two years, higher fuel efficiency standards for heavy trucks, and for oil companies to make greater use of federal leases to increase domestic oil output. Obama’s 2009 “stimulus package” set aside $70 billion in grants and loan guarantees to promote renewable energy, energy efficiency, and advanced batteries for electric cars.

  The State Department has again put on hold the construction of an oil pipeline from Canada to U.S. refineries in the Gulf of Mexico while it considers the pipeline’s environmental impact.

  Shell Oil has again applied to drill ten wells off Alaska’s Arctic shore over the next two years after earlier experiencing the inability to obtain federal permits.

  Republicans have their own ideas for the direction of U.S. energy.

  The Republican-controlled House recently passed, with the help of only twenty-three Democrats, the Jobs and Energy Permitting Act of 2011 (H.R.2021) to streamline the permit process with the goal of expanding American energy production.

  Earlier this year, House Natural Resources Committee chairman Doc Hastings (R-WA) was pushing three bills that would expand offshore energy production to create jobs, lower energy costs, and lessen American dependence on foreign energy.

  Senate Republicans just spearheaded the passage of an amendment to a bill that would eliminate income tax and excise tax credits on ethanol fuel production. However, they earlier voted overwhelmingly against a similar bill to reduce tax credits for the oil industry.

  Senate Minority Leader Mitch McConnell (R-KY) has accused the Obama administration of “waging a war on American energy” because of drilling permit delays.

  In December of 2007, President Bush signed into law the Energy Independence and Security Act of 2007 (PL 110-140). This law requires that automakers boost the gas mileage of their fleets to 35 mpg by the year 2020. Fuel-economy regulations (CAFE standards) were first introduced for passenger cars in 1978. The current standard of 30.2 mpg will rise to 39 mpg by 2016.

  Democrats and Republicans in Congress may disagree on the size of the budget of the Department of Energy, the permitting process for drilling leases, and the nature of U.S. energy policy, but they all agree that the government should “do something” to lower gas prices, increase domestic energy production, and lessen U.S. dependence on foreign oil.

  Because adherence to the Constitution and the proper role of government are not the foundational issues that they should be — indeed, they are often not even considered by most members of Congress — the debate over energy policy among Democrats and Republicans and liberals and conservatives is always over how government should carry out an energy policy instead of why the government should have an energy policy in the first place.

  The simple truth is that the national government has been delegated no authority whatsoever concerning anything to do with energy production, provision, or efficiency. It is no more the role of government to regulate, subsidize, oversee, issue mandates to, and set standards for energy-related industries than it is the role of government to do these things to or for any other industry. And having a national energy policy is nothing more than Soviet-style central planning.

  Clearly, there should be no Department of Energy or national energy policy.

  But that’s not all. There should be no CAFE standards, moratoriums on drilling, ethanol or biofuel mandates, efficiency standards, subsidies for any particular type of energy, bans on incandescent light bulbs, drilling permits, encouragement of mass transit, incentives to use natural gas in fleets, blending requirements for gasoline, research grants, promotion of renewable energy, mining regulations, conservation mandates, energy independence goals, or green campaigns.

  There should be no Strategic Petroleum Reserve any more than there should be a strategic lead or rice reserve. The federal government has no authority to be in the commodities business.

  There should be no federal leases issued for the simple reason that the federal government shouldn’t own vast tracks of land outside of Washington, D.C. (The largest landowner in the United States is the federal government, owning land in all fifty states, with ownership exceeding 50 percent in some states.)

  Three related points about energy should also be mentioned.

  One, there is nothing special about the discovery, extraction, processing, and offering for sale oil, natural gas, coal, or any other commodity or natural resource. Companies involved in energy production should be treated just like companies that provide any other product or service. And if ethanol, wind turbines, and solar energy can’t make it on the free market without government intervention, then they should be allowed to wither and die.

  Two, there is nothing inherently wrong with importing oil, gasoline, ethanol, or any other source of energy for the simple reason that there is nothing inherently wrong with importing any raw material or finished product. “Energy independence” is autarky, pure and simple.

  And three, if the U.S. government wants to pursue a wise energy policy, then it should look in the mirror. The Department of Defense uses 300,000 barrels of oil each day, 70 percent of which goes to overseas operations at a cost of almost $10 billion a year.

  Whither U.S. energy policy? We can only hope it runs out of steam.

  About the author: Laurence M. Vance is a free-lance writer in central Florida. He is the author of The Revolution That Wasn’t. Visit his website: Send him email.

  This article was published by the Future of Freedom Foundation. 

No comments:

Post a Comment