A Matter of Electoral Concern - Our Incoherent Energy Policies
This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.
The price of gasoline hit $4.80/gallon in California just a few weeks ago. And yet near four years into this Administration, we are still without a coherent policy to access our vast reservoirs of oil and gas offshore, on federal lands and Alaska.
- Instead hundreds of millions, no, billions, have been spent on failed alternative energy projects such as Solyndra and tax holidays for alternative energy sources. Alternative energy needs be a focus but not to the detriment of energy independence and rational energy pricing and certainly not at the expense of coherent policies being sacrificed to boondoggles for vested interests. Consider the enormous benefits that would have accrued to the economy and our national security had even a portion of the funds and focus expended on highly questionable alternative energy boondoggles been allocated to developing universally environmentally safe fracking techniques giving us unfettered access to our vast national holdings of shale gas and shale (tight) oil on both private and public lands.
- The problematic appointment of Steven Chu as Secretary of the Department of Energy. A brilliant physicist but hardly equipped to deal with the rough and tumble of the oil patch, Chu's leanings were made clear in comments to the Wall Street Journal in 2008: "Somehow we have to boost the price of gasoline to the levels in Europe." That would have meant around $8 a gallon. Middle America would have said a heartfelt thanks. Sadly, it is a mindset that has permitted prices to increase nearly threefold during his tenure without challenge or push back.
- No far-seeing policies on a national scale to harness the extraordinarily huge deposits of shale gas to wean us off our dependency on oil by transforming our gasoline-powered transportation fleet to compressed natural gas. Where are the government incentives for consumers, manufacturers and distributors alike to undertake this core transformation? With today’s price for natural gas at $3.80 MMbtu, crude oil would have to be priced at $23/bbl to compete with natural gas to deliver the same component of energy, not to speak of gas' significantly lower carbon footprint. For those who question whether it can be done, know that in the far away nation of Armenia, some 75% of its automobile and truck fleet is propelled by compressed natural gas - a lesson we could take to heart.
- With the recent revelation that our oil imports from Saudi Arabia have increased by 20% according to a front page article in the New York Times (“US Reliance On Saudi Oil Goes Back Up” 08.17.12) in spite of oil industry induced (not government) vastly increased domestic production of shale oil, what is sorely missing is a hard negotiating stance with our oil providers, especially those in the Middle East. The American public is laying out literally hundreds of millions of dollars a day keeping a massive naval task force in the Persian Gulf and near and about the Strait of Hormuz. The task force keeps the shipping lanes open for the Gulf States of Kuwait, Qatar, Bahrain, Dubai, the U.A.E. and of course Saudi Arabia, all charter members of OPEC, to freely ship their cargoes of oil to a world clientele from China to the U.S. Our armada also keeps them safe from the rapacious ambitions of their Iranian neighbor. We pay while they play. Only we pay twice -- once by the rapacious demands of the OPEC cartel’s manipulated price of oil, and again by the vast sums to keep a large portion of our naval fleet to stand bodyguard. Something is very off base in this equation and it is long past due that our government took the issue in hand and arrived at a far more equitable arrangement, or possibly just sail away.
WHAT DO YOU THINK?
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Author, Oil & Finance: The Epic Corruption