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Free market energy policies can end economic malaise

By Craig Rucker
web posted May 6, 2013

"We can't have an energy strategy that traps us in the past," President Obama proclaimed in March 2012. "We need an energy strategy for the future – an all-of-the-above strategy for the Twenty-First Century that develops every source of American-made energy." 

At first blush, this sounds like common sense. The US economy and lifestyle "depend on inexpensive and plentiful energy," the Congressional Research Service noted in a 2005 report, but people tend to forget this until world events cause gasoline prices to spike. Then Washington reacts, CRS continued – passing the Energy Policy Acts of 1992, 2005 and 2007. However, the US still does not have a "comprehensive long-term energy policy" that balances increasing supply with conservation and defines the proper interplay between government and market forces.

Forty years ago, President Nixon announced "Project Independence," in response to the 1973 oil cutoff by Middle East and other OPEC nations, with the goal of ensuring that "Americans will not have to rely on any source of energy beyond our own."  His broad-based strategy begat the trans-Alaska pipeline (to get North Slope oil to Lower 48 markets), expanded onshore and offshore oil drilling, an all-of-the-above strategy for electric power generation that brought lignite mining and natural gas into prominence, and a host of conservation measures, including 55-mph speed limits.

President Carter brought very different thinking to Washington – policies that many believe led to declining US oil and gas production and economic "malaise." President Reagan reversed Carter, but his successors, Congress, courts, environmental activists, regulatory agencies and disparate corporate interests launched American energy policies on a roller coaster ride. This history helps explain why comprehensive long-term energy policies and strategies are less logical and desirable than at first blush.

The term itself suggests policies devised and dictated by Washington, DC politicians, bureaucrats, lobbyists and pressure groups – many of whom have no real knowledge of or hands-on experience with energy, economics, science, technology, business or job creation.

In too many cases, the policies, strategies, laws, programs and regulations are crafted to promote specific ideologies, benefit companies and organizations with the best lobbyists, and secure tax breaks, subsidies and preferential treatment for political cronies, campaign contributors and politically correct ideas.  

"All of the above" too often means all of the above ground and little or nothing below the Earth's surface: wind, solar, biofuels and wood, for example – but little or no oil, gas, coal or uranium. In fact, more than any other in history, the Obama administration is using its executive powers to delay, obstruct, hyper-regulate, penalize and bankrupt the proven energy that is the foundation of modern living standards.

Similarly, the notion that proven energy strategies "trap us in the past" fails to recognize that "past" energy technologies (oil, gas, coal, nuclear and hydroelectric) actually provide 94% of the energy that powers America today; are abundant, reliable and affordable; and represent a monumental improvement over the wind, solar, wood, dung and water wheel power that feebly energized mankind for millennia.

Suggesting that we can abandon these vital 94% energy sources – in favor of new variations on antique technologies that Mr. Obama promotes as energy of "the future" – ignores the fact that these politically correct sources are expensive, intermittent, heavily subsidized and wholly dependent on fossil fuels. Moreover, any honest and meaningful cradle-to-grave analysis of wind, solar and biofuel energy reveals that these PC sources are land- and resource-intensive, environmentally damaging, and unsustainable.

The "comprehensive long-term energy policies and strategies" slogan also ignores where the real progress of recent years has been made: in the private sector, especially the petroleum industry, where revolutionary horizontal drilling and hydraulic fracturing technologies have unlocked centuries of oil and natural gas worldwide. In fact, "fracking" on state and private lands has sent US petroleum production to new heights – even as Washington politics and policies have ensured that production from federally owned and controlled onshore and offshore lands continues to decline.

Hydrocarbon, hydroelectric and nuclear have undeniable problems: oil spills, air and water pollution, radiation and accidents. But laws, regulations, technologies and greater corporate responsibility have greatly reduced their frequency and severity – and errors are quickly and severely punished.

By contrast, human health and environmental impacts associated with wind, solar and biofuel energy are routinely and systematically ignored, and almost never punished. The slaughter of millions of birds and bats annually by US wind turbines is a case in point, and when the impacts are considered in the context of the minimal energy produced via these "renewable" technologies, the damage is especially egregious.

These "alternative" technologies ALSO require perpetual subsidies, taken from hardworking taxpayers and productive sectors of our economy, and given to crony corporatists whose schemes slide repeatedly into bankruptcy. They employ rare earth metals and other raw materials that require vast amounts of fossil fuels, monumental earth removal and widespread land degradation – to build and operate facilities whose energy is so expensive it kills 2-4 jobs for every "green" job created, drives families deeper into poverty, and impairs human health and welfare.

Forty years ago, President Nixon actually sought to develop and utilize "all of the above" energy – every practical source on every list. Today, amid an anemic economy and joblessness far worse than official government figures admit, President Obama balks at approving the Keystone XL pipeline, cancels leasing and drilling on federal lands, tells our budget-sequestered military to buy $26 to $67-per-gallon ship and jet fuel, punishes refineries for not buying cellulosic ethanol that doesn't exist, and happily lets EPA shut down coal-fired power plants and kill countless thousands of mining, utility and other jobs.  

Thoughtful Americans find little comfort in these policies. Twelve million still cannot find work in this moribund, DC-dictated economy. Red-state Democrats like Joe Manchin (D-WV), Mark Begich (D-AK) and Mary Landrieu (D-LA) tremble at the prospect of facing voters in 2014. And outrage is properly growing over the massive failures of wind, solar and biofuel startups whose executives (mostly Obama and Democrat campaign angels) skimmed millions of tax dollars for themselves but let their companies go bankrupt and their employees go on unemployment and welfare rolls.

And still President Obama and his minions push for punitive carbon dioxide regulations and carbon taxes, while the European carbon market collapses, EU jobs head to China and India, and thousands die of hypothermia in England. The European emissions trading system is "below junk status," according to The Economist, and the collapse has been felt as far away as Australia, whose political leaders prepare to reap the whirlwind of carbon taxes that are now 5.5 times higher than in Europe. Is this America's "future"?

Will ideology continue to trump sanity in the Obama energy and climate policy arenas? The President is putting all his eggs in the basket of "hope" that Democrats will "change" the House leadership and extend their Senate majority in 2014. He has shown little desire to compromise on energy and climate change.

America does not need "comprehensive" energy policies devised and dictated by Washington. It needs policies that unlock our creative genius and allow free enterprise and private sector innovators to operate on a level playing field – one that applies the same reasonable, responsible environmental, endangered species, tax, subsidy and other laws and standards to all companies, investors and energy technologies.  

We need simple laws and policies that let our ultimate energy resource (our creative intellect) work – without ideologues, pressure groups and regulators promoting failed, subsidized energy schemes, while continuing to block affordable, dependable energy that actually creates jobs and generates revenues. ESR

Craig Rucker is executive director of the Committee For A Constructive Tomorrow.

 

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