Oil Policy Is Self-Defeating

Oil Policy Is Self-Defeating

China and Cuba are actively exploring oil fields 50 miles from Key West, Fla. while U.S. companies are barred from working in this area because of U.S. policy.  

So, instead of allowing the most environmentally responsible companies in the world to operate there and increase our domestic supply, China, which has a dismal environmental record, is preparing to suck our close, lucrative oil reserves dry.

We have, as President Bush has noted, an estimated capacity of a million barrels of oil a day from this source alone—enough for 27 million gallons of gas and diesel, but Congress, fearful of the clout of the environmental lobby, won't touch it.  As a result, you pay through the nose at the pump so your representative can raise campaign cash.

The U.S. hasn't built a single new refinery since 1976, yet the EPA requires at least 15 unique 'boutique' fuel blends that can be sold in different areas around the nation. This means that U.S. refinery capacity is stretched so tight that even the slightest problem at a refinery causes enormous supply problems and price spikes. This is something Congress can do something about but so far Congress has done nothing. Don’t even get me started about the ethanol debacle.

Nuclear power is safe and, with advances in nuclear reprocessing technology, waste problems have been minimized. Still, we have just 104 nuclear plants—the same as a decade ago—producing just 19% of our total energy. (Many European nations produce 40% or more of their power with nuclear.) Granted, nuclear power plants are expensive—about $3 billion each. But they produce energy at $1.72/kilowatt-hour vs. $2.37 for coal and $6.35 for natural gas.

Raising taxes on energy producers is a revenge tactic, not a solution to anything. This is where a basic understanding of economics would help. Higher taxes and needless regulation lead to less production of a commodity. So by proposing "windfall" and other taxes on energy companies plus tough new rules, Congress only makes our energy situation worse, and make no mistake, oil companies are viewed as the villian in all this so they make an easy target for Congress.

These are just a few of Congress' sins of omission—all while India, China, Eastern Europe and the Middle East are adding more than a million barrels of new demand each and every year. New Energy Department forecasts see world oil demand growing 40% by 2030, including a 28% increase in the U.S.

Americans worried about the direction of their country, including runaway energy and food prices, should keep in mind the upcoming election isn't just about choosing a new president. We'll also pick a new Congress.

At the end of the Republican-controlled Congress gasoline averaged $2.10 a gallon. Since Pelosi and Reid have taken over, gasoline has gone to ??? (I can’t type fast enough to keep up). If we elect a liberal Democrat as president in the fall, and keep the same Democrat-controlled Congress, nothing will change except gasoline prices, which will keep going up.

Paul Nadeau

Braintree