The energy crisis is a far greater threat than budget deficits, health care costs or anything else this country faces other than a military attack.
The latest announced excuse for high gas prices that threaten both the American Way of Life and President Barack Obama’s re-election prospects is manipulation by those evil oil companies, their vertically integrated henchmen and speculators. The president has Attorney General Eric Holder putting together an “Oil and Gas Fraud Task Force,” which, to quote MacBeth, is likely to tell a “tale ... full of sound and fury, signifying nothing.”
However, the president won’t succeed in diverting blame for doing what the previous four administrations did to wean ourselves from being in thrall to foreign oil — i.e., absolutely nothing.
The Republican response to what has become a colossal and continuing crisis is even lamer, best summed up by paraphrasing Sarah Palin: (1) drill, baby, drill and (2) no government assistance to energy alternatives. Forget that the most optimistic estimate by both the federal Energy Information Administration and industry is that the maximum amount of additional oil to be found in these United States and offshore would amount to 3 percent of total reserves and would not even offset declines in reserves during the 7-10 years it would take to bring new oil into the production stream. Forget, too, that the oil industry has been the largest beneficiary of government assistance since at least 1913.
With China, India, Brazil, Turkey and other rapidly developing countries dramatically increasing their demand for dwindling imported oil supplies, price rises at the pump are the inevitable result of a generation of U.S. government neglect. China, for example, currently consumes 9 million barrels of oil per day and is predicted to need 15 million by 2015. That kind of demand pressure will only push prices higher and grind the American middle class even further into the ground, changing lifestyles, internal migration and consumer choices profoundly.
So what should our squabbling government do?
First, seed the development of renewable energy — wind, solar, biofuels, wave, tidal, underwater currents, hydro power and yes, nuclear. This will require investment at a time when hand-wringing over deficits and debt obsesses Washington at the expense of every other critical problem we face. There is a high cost to being the first movers and innovators in any industry. That was true of the early oil industry, so government stepped in and provided lots of seed money worthy of Jack’s beanstalk. If we do not do this — and now — the future will look gloomy, indeed. If we do it and do it intelligently, the benefits will be immense and we might even transform America’s unique-in-the-world jobless recovery into one that creates good, high-paying jobs and thus solves two of our major problems with one policy shift. To date, it is sadly the case that Washington does not seem to care one whit about the 20 million jobless Americans thrown into the economic quicksand thanks in large part to a decade of regulatory inattention.
Germany has been seeding solar energy for 20 years and its $20 billion photovoltaic industry is now being weaned off of government assistance because it can stand on its own. Italy, Spain and France have similar programs. Several U.S. states are getting into the act, prompted by federal inaction. These “Feed-In Tariff” programs actually return money to taxpayers.
Second, the president needs to push, and Congress needs to enact, a range of incentive tax credits for programmable thermostats; insulation; windows; efficient appliances, heating and air-conditioning systems; and purchases of hybrid and electric vehicles. The paltry ones now in place (better ones were inexplicably allowed to expire at the end of 2010) and that will expire at the end of this year are having almost zero impact. This is the lowest of low-hanging fruit that Washington should pluck. The cheapest energy is the energy you don’t need. That is what conservation is all about.
Third, step up the Energy Department’s smart electrical grid program, currently a too-quiet and shamefully underfunded effort at transforming our obsolete electricity grid into one that meets 21st century requirements.
Fourth, why not “claw back” some of the trillions transferred to Big Oil for the past 100 years, now that they have proven that they can easily survive on their own?
The energy crisis — most obviously manifested by gas prices at the pump — is a far greater threat than budget deficits, health care costs or anything else this country faces other than a military attack.