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Oil, Energy and Congress

Now that Congress has gone into recess for the end of the summer, what are we going to do about the energy situation? At this point, I’m getting tired of hearing that $ 4.00 gas is good for me. How can it be good when Americans spend less of their money on other goods and invest in their gas tanks? Is it good that transportation costs have skyrocketed my food bill? Is it good that many Americans have shortened their vacations and reduced their entertainment expenses? Is it a good thing that working poor are struggling between putting groceries in their homes and fueling their cars to get to work?

Apparently our congressional leaders and a presidential candidate say the answer is yes. While our Speaker of the House is trying to “save the planet”, the rest of the world is trying to find more oil and energy. Let’s look at some recent examples:

  • Egypt announced last week the start of a $ 9 billion oil refinery and petrochemical complex, which will be located on its north coast. The complex is expected to begin operations in 2010 and will be completed in 5 years. The facility will refine 350,000 barrels of oil per day.
  • The Tupi deepwater oil field is located off the coast of Rio de Janeiro, one of the best tourist destinations in Brazil. Last November, the Brazilian government announced that the location could contain between five and eight billion barrels of oil. The Tupi oil field is expected to start producing 100,000 barrels of oil in 2010, according to Petrobas, Brazil’s national oil company. Petrobas expects to bring production to one million barrels a day in about ten years.
  • Finland is building a 1600 megawatt nuclear reactor. Currently, the country obtains 28 percent of its electricity from nuclear power.
  • Japan is working to increase its nuclear power production from 30 percent to 37 percent for 2009 and 41 percent for 2017.

Now, in addition to threatening to sue the Saudis and add more oil taxes, what has the US government’s energy policy done? Let’s see some examples:

  • From 2000 to 2007, national crude oil production fell 12.4 percent.
  • Through a congressional mandate, 85 percent of the outer continental shelf is off-limits to oil exploration. The outer continental shelf is estimated to contain 90 billion barrels of oil
  • The Artic National Wildlife Refuge (ANWR) is estimated to have 10 billion barrels of oil; In 1995, President Clinton vetoed a bill authorizing oil production on 2,000 acres out of a total of 19.6 million.
  • US Senator Ken Salazar, Colorado, inserted language into the overhead bill last December that establishes a moratorium on promulgating rules for oil shale development on federal lands. The Green River Formation is estimated to have up to 1.1 trillion barrels of oil shale.
  • As mandated by the 2007 energy bill signed by President Bush, the United States is now required to mix 9 billion gallons of biofuels into its gasoline supply. The mandate is primarily with corn-based ethanol. At the beginning of the biofuel mandates, corn cost $ 2 per bushel. The price of corn is now just over $ 6 per bushel.

It seems that the more our government gets involved, the worse the situation becomes. And where did the common sense go? If I see that you need water, I would not send you to a desert to get it. Yet that is what we do with our oil exploration. Try to find it where we don’t know if it exists.

From 2000 to 2007, US oil companies increased exploration well drilling by 138 percent (on those 68 million acres of existing leases); Oil production still fell to its lowest level since 1947. The American Petroleum Institute reported that oil companies had the most oil well activity in the second quarter since 1986.

The United States has successfully developed other forms of energy; clean coal plants, nuclear power, natural gas plants, solar and wind power. Our most efficient and cheapest forms of energy production are under constant attack from the environmental movement. The United States uses 760 gigawatts of power plants to meet today’s needs. The North American Electric Reliability Corporation (NERC) estimates that we will need 135 gigawatts of new capacity in the next 10 years. So far, only 57 gigawatts of power plants are planned. Why?

  • 59 coal plants were canceled in 2007 due to the anti-coal activist.
  • US natural gas production is beginning to decline due to environmental restrictions on exploration.
  • The National Resources Defense Council (NRDC) managed to stop 13 natural gas power plants in Southern California.

We have the best scientists, engineers and technicians in the world. Give them a chance to solve this challenge and they will. There are many private companies working on new technologies to bring them to market. If our government is going to pick winners and losers through subsidies, many companies will not enter the market.

For example, NuScale Power, an Oregon-based start-up, is seeking federal authorization to begin its project to build a mini nuclear reactor. The reactor can power 45,000 homes, is 65 feet long, and has no visible cooling tower. NuScale claims that these reactors are maintenance-free and require no refueling. At the end of its useful life of about 30 years, the plant is returned to the factory.

This type of technology should be well received and encouraged by all. With a small footprint and no carbon emissions, these plants could replace many traditional coal and gas power plants.

This situation does not require a billion dollar bailout from our government. Nor does it require raising taxes on oil companies. Remember, we tested the windfall tax with President Jimmy Carter. That led to a 6 percent drop in oil production and a 15 percent increase in oil imports, according to the Congressional Research Service.

If Congress steps back and allows everybody For energy companies to explore and develop energy responsibly, we would not have to struggle with high energy costs. Put off everybody of subsidies and let the market decide which means of energy is cheaper, environmentally friendly and durable. American technology is more than capable of producing efficient energy and protecting the environment.

Instead of trying to spend more of my tax dollars, why doesn’t Congress spend more of their time, for which we pay them, to fix the regulatory landscape for energy production? Congress needs to enact some common sense environmental regulations. If they do, the market will provide us with a diverse supply of energy that is reliable, American-made, and affordable.

It’s time to streamline and simplify this process, now.