Written by Vincent Gioia
May 20, 2008
We could be energy-independent if it weren't for spineless leaders and a weak populace
By Vincent Gioia
Before I got my first driver license I envied my young friends with cars. They ruled the neighborhood and had first choice of girls; I could only stand by and wonder what it would be like to be able to cruise down Main Street in my own "wheels" and eat at drive-in restaurants served by pretty car hops. Little did I know then that all this was made possible because gasoline was a bargain and fill-ups were affordable by most everyone.
Today drive in restaurants are gone and with them pretty car hops; and so is affordable gasoline. In those days the only Arabs I knew about were the occasional actors in movies like Road to Morocco, Flying Carpet and Alibaba and the Forty Thieves (how prescient was the title of the last one?). Never having been there I could only imagine the likes of Arabia; I suppose something like Coney Island without a Nathan’s Hot Dog Stand.
When I fill up my car with gasoline now, it costs $50, a far cry from the days when gasoline was 25 cents a gallon; and we have Alibaba, political asses and greenies to thank for that. They are responsible for unaffordable gasoline.
The main reason that gasoline prices were low in the fifties and stayed low from 1980 to 2006 is not because the Arabs were our friends and wanted to subsidize cruising down Main Street or that they loved us so much they wanted to sing kumbaiya with us. The reason they let us keep gasoline prices low and oil prices at $15 - $25 per barrel for decades is because at that price nobody was going to pay billions of dollars to build massive energy infrastructure projects to replace oil from the sands of Arabia. To do that it was necessary to not let oil sell for much over $30 a barrel so it would not be profitable to invest billions to develop alternate oil supplies. They had to have a ceiling to how high oil prices could go and that ceiling was what it would cost to develop alternative energy sources.
If we had any sense and were not prevented by Democrats and their green friends, having broken through that ceiling we would be adding millions of barrels per day of oil equivalent production capacity using proven technology available today. If this capacity were developed, the price of oil would fall because there would an excess of supply relative to demand and it would take a long time for the world economy to grow enough to utilize it. The fact that the world would be producing an excess of oil equivalent relative to world demand would mean depressed oil prices for decades.
If we remember the years 1974 to 1980, gasoline went from about $0.45 to $1.30 per gallon in the late 70's. This was a huge increase at the time and people were crying then like today. However, this increase in oil prices caused an increase in production capacity development to occur. In fact, production capacity was increased so much that it took from 1980 to 2007 for the world to get to the point where the excess capacity was all used up. For that reason we had over 20 years of progressively cheaper oil and the same thing would happen again if we let market forces work. But the problem is Democrats won’t let that happen.
Every possible attempt to create more energy supply has been thwarted by the Democrats. Outright bans, like ANWR, as well as environmental roadblocks preventing construction of new refineries and nuclear power stations by Democrats and environmentalists have made it clear their energy policy is high priced energy and socialism, not the free market.
Let’s look at the record as summarized by Investor Business Daily:
"For the last 28 years, Democrats in Congress and a few Republicans have again and again opposed our drilling for oil in Alaska’s ANWR area when we knew it contained at least 10 billion barrels of oil we could be using now.
• For the past 31 years, Congress repeatedly prevented us from building any new oil refineries that we now badly need.
• More recently, congressional Democrats defeated and discouraged any bill that would let us drill in the deep sea 100 miles out. However, it’s somehow OK for China to drill there.
• As a further indictment of our Congress, since the 1980s it has continually stopped all building of nuclear power plants while France, Germany and, yes, Japan, plus 12 other major nations, did build plants and now get 20% to 80% of their energy from their wise and safe nuclear plant investments.
• From 1990 to 2000, U.S. crude oil demand rapidly accelerated by 7.41 quadrillion BTUs, according to Department of Energy data. And our rate of foreign oil dependency dramatically increased while our domestic oil production steadily declined.
Under the eight Clinton years alone, U.S. oil production declined 1,349,000 barrels per day, or 19%, while our foreign imports increased 3,574,000 barrels per day, or 45%.
During this time, President Clinton vetoed ANWR drilling bills that would have clearly made Alaska our No. 1 state in the production of our own vitally needed oil supply, not only for all Americans but also for national defense emergencies."
It is not just that Democrats and members of Congress together were short-sighted, the fact is Democrats would not let the law of supply and demand determine the price of all oil. As Investor Business Daily concludes:
"… were they (the Democrats) simply and utterly irresponsible and incompetent in their actions that led us to become dangerously dependent on increasing oil imports from foreign countries? We think it was ‘all of the above’."
I agree with Investor Business Daily that it is a national disgrace for Democrats to relentlessly criticize, complain and condemn others when Democrats in congress are the true villains by constantly blocking and obstructing every effort for us to become more productive and less dependent on foreign oil.
While our fearless leaders are allocating huge sums to harness the power of wind and food production-damaging ethanol, they are ignoring real world possible solutions to our energy independence. In contrast to wind and ethanol, nuclear power which already provides 20% of U.S. electricity production, it is subsidized about 15 times less than wind. If we are going to subsidize at all, then we should use the money for nuclear power because it is a lot more worthy than other "alternatives" like wind and ethanol.
The U.S. Energy Information Administration (EIA), an independent federal agency, issued a report that found ethanol and biofuels receive $5.72 per BTU (British thermal unit) of energy produced. At only $0.03 per BTU for natural gas and other petroleum fuel products, it is far less than $2.82 for solar and even $1.35 for refined coal. For electricity generation, the EIA study shows that solar energy is subsidized by $24.34 per megawatt hour, wind $23.37 and by contrast, normal coal receives $0.44, natural gas $0.25, hydroelectric about $0.67 and nuclear power $1.59. Most importantly is the promise of coal-to-oil conversion in a country with vast supplies of this untapped energy source. In just about 10 years, putting aside the objections of the green and global warming lobbies, our country could be free of reliance on Alibaba and the forty thieves.
Relying on domestic biofuels and nuclear energy is a much better solution and would enable the United States to become energy independent most cost-effectively and in a relatively short time. If that isn’t enough incentive, think about all those future generations of youngsters that will proudly show off their shiny roadsters as they cruise down Main Street.