Tuesday, June 08, 2010

How BP Gulf Oil Spill should effect Comprehensive Energy Policy in America


Now that we have heard all the chest beating claims of the liberals and conservationists and the crescendo of photo ops and sound bites from our politicians making all kinds of nonsensical claims about the effect this spill Must Have on energy policy, are we ready for a taste of the truth?

The truth is this. America is dependent on oil to grow and survive. We are not the greatest user of energy per capita, that is Canada. The United States ranks number 7 in per capita consumption. Because of our population we use the most energy.

We use about 100 quadrillion BTUs a year, of which 40% is fossil fuel. In the category of fossil fuel petroleum is 23%, 23% natural gas, Nuclear provides 8.4%, and renewable 7.3% which is mainly from hydroelectric dams. Overall per capita consumption in the US has remained stable since the 1970's.

The alternative fuels being pushed by Obama and others are a viable long term solution but to put them ahead of an aggressive program to secure energy independence from foreign sources through expanded use of oil, natural gas and coal, is simple nuts. With the primary renewal sources of energy providing less than 5% of our total energy needs, the most liberal of development projections would not result in US energy independence with renewable fuels until the end of the 21st century if then. Remember we have to allow for economic growth.

The truth is the only short term investment that can lead to energy independence is use of the oil, gas and coal reserves in an environmentally friendly manner. Meaning, we need regulatory enforcement which did not happen in the BP oil spill case, improved regulations in terms of the back up plan for any future off shore oil drilling, and expanded drilling areas.

With the BP experience we can protect our environment while expanding drilling. We have already seen hundreds of wells drilled off shore in deep water with no problems. We can always improve the back up plans and permit process but should not strangle the use of oil, gas or coal as a result of the BP and Interior Department problem. BP drilled the well but Interior approved the plan and permits.

If we do not do this, or if we get caught up in environmental radicalism we will strangle the American economy and never have the growth necessary to support long term alternative energy development. Make no mistake, alternative energy development is going to result in far more expensive energy and the American public cannot support huge increases in gas and electric costs.

Obama has already embraced the liberal clean energy movement to the point of threatening the short term economic growth of our nation. If we go green today we will go broke. It is that simple. Yet we can start the transition process of going green without going broke by a two tiered energy policy, the aggressive development of fossil fuels to seek energy independence thus lower energy costs while we give incentives for a long term transition to a green energy economy.

Right now most money invested in green energy is going into the pockets of investors, Wall Street firms like Goldman Sachs, pseudo environmental groups like Al Gore and his Goldman Partners, and not for the benefit of the industry or to lower energy costs for people.

As for the lesson of the Gulf oil spill, it should serve the same purpose as Three Mile Island. The 1979 TMI nuclear disaster was unexpected, not covered by federal regulations, and brought the nuclear industry in America to a standstill. A cost of billions of dollars were involved in the clean up though no lives or jobs were lost. It is the price you pay for new technology which is exactly what happened in the deep water drilling. We discovered problems never anticipated before.

While nuclear provides just 8.4% of our energy, it supplies up to 70% of the energy in some countries. An unexpected disaster like TMI or the Gulf spill should enable us to learn and make sure it does not happen again. Right now there are far more off shore oil wells, over 2,000, than nuclear plants in the USA, 103 commercial plants, and for the short term oil can be in service in far less time and at far less cost than new nuclear or alternative sources.

Use the BP Gulf experience to learn and grow, not to strangle the future economic growth and independence of America. It is time for the president and congress to do what is right for America, not just what is politically expedient.


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