Thursday, April 28, 2011

The Economy, Environmentalists, Oil, and Nightmares

There’s an environmentalist under my bed, Mommy. Make it go away.

How many times do we have to go through an oil crisis with skyrocketing gas prices and a hit to the economy before we will get the freakin’ monster out from under the bed?

There is no monster, of course. But as long as we think there is one, it’s no different than actually having one. So, it is time - has been for a long, long while - to change our thinking. Exorcise the oil monster.

The problem with this particular monster is that it’s alive and well in the minds of reactionary, stubborn, dream-laden (or should I say nightmare-laden) environmentalists who perceive a non-existent problem. An oil spill or chemical leak and we have instant legislation that affects us negatively for years to come.

Look, here’s the problem and solution in a nutshell. It’s not that tough.

1. We use too much oil. Use less oil. Create alternative forms of energy.

2. We are dependent on foreign entities for large portions of our oil. Drill and refine considerably more of our own oil.

3. Our economy is dependent on energy - including lots of oil. See above.

4. Many of our “enemies” are getting enriched because of oil. See above.

5. We don’t have enough alternative energy. See above.

As with many of the “Blueprints” for the future thrust upon us by progressives and liberals, this whole push to limit oil production in the US and encourage development of alternative energy sources is 90% fantasy and 10% legitimate. Even the 10% legitimate part is fraught with problems and gross inefficiency. Take for instance the Cash for Clunkers” program:

According to Edmunds, only 125,000 of the 690,000 purchases would not have been made without the incentives, and with $3 billion spent, that works out to $24,000 per car.

William Chameides of Duke University (from Wikipedia) with reference to the carbon emissions emitted in the process of making a new car said that in order to offset the carbon footprint of the new car from a clunker, the average driver would need to drive the car about five and a half years; with trucks, the figure jumps to eight or nine years of typical driving.

-The price of used cars increased significantly due to the drop in supply, thereby impacting anyone (especially poor people) who needed to buy a used car.

Resources were allocated to production of new cars that to some degree would have been steered to other products and services.

Perfectly good capital assets (cars) were destroyed, even though they had years of functional use left.

Charitable organizations that depend on donations of used vehicles saw such donations plummet.

All this so we can see an immediate spike in emissions (from production) and then gradual reductions so that after 5-8 years we will break even on total emissions. Incredible when you consider reaching the same result by simply increasing the MPG requirements for new cars.

Similarly, anyone familiar with the financial aspects of solar programs and the ethanol industry knows that sorely-needed taxpayer dollars have to date been poured down a large rat hole as well.

Unfortunately, the Dems’ best intentions on environmental issues are usually misguided and poorly conceived, and have been fraught with unintended (but predicted) consequences, because they are formulated and put into action by wishful-thinking politicians with no common sense. Compliment these programs with incompetent administration by governmental agencies, and, well, you know what happens. Botch job. And one could argue this is the good 10%. This isn’t to say we should stop pursuing alternative energy solutions: just that we need to develop them in an economically sensible way.

Now, here’s what the 90% fantasy part costs us-

- Skyrocketing gasoline prices. The increase in gasoline costs all of us, from the average commuter to the on-the-road salesman to the building contractor to the elderly person who stays at home but pays higher prices for all her purchases.

- Lost jobs to countries that aren’t afraid of drilling for and refining oil.

- An enormous number of jobs lost to other countries in manufacturing and production. Lots ‘n’ lots of jobs.

- Filling the pockets of hostile countries with our money. Sure, we get most of our foreign oil from Mexico and Canada, but it is still a world market when it comes to price.

- Vulnerability. Our economy and national defense are at risk as long as we are not in control of our own energy sources and supply.

I got tired of my mother telling me to be careful when I wanted to go out at night. I got tired of my kids telling me to “butt out” of their personal lives when they were in high school. I get tired of missing three-foot putts. But I am really tired of the argument “Well, starting now won’t help for years,” so we don’t drill for oil and we don’t develop nuclear energy. Had we ignored this shortsighted reasoning over the last 40 years we would be in much better shape today. If we start ignoring that excuse now and formulate a realistic energy policy, we can avoid this conversation in the future.

And yes, changing course now will have an immediate, though small, effect on prices for oil. How much is uncertain, but most economists agree that expectation of increased oil production will have some beneficial effect on current prices.

Am I advocating giving up on alternative energy programs? Not in the slightest. Spending tax dollars in conjunction with private enterprise to develop sustainable energy that is viable is a worthy venture. But we should not force economic dependence on new programs until we know how to implement them and know they will work - not just hope. Easing restrictions on nuclear power and dams can go a long way in meeting our electrical needs over a longer term. We know they work. The coal industry - also under constant attack - is grossly underutilized. We need to start promoting these industries instead of vilifying them. We need to treat these industries as our salvation instead of our nemesis. And we need to drill, baby, drill.

A farmer doesn’t quit growing his best crop hoping that some new crop will work. Similarly, stopping U.S. production of oil before we had adequate alternatives in place was pure idiocy. Still is.

“It’s the economy, stupid.” If the main issue for elections is always the economy as the oft-quoted statement says, then a main sub-issue in the next election should be energy. And that means oil. Drill, baby, drill.

Of course, we might become great friends with oil exporters in the Middle East, and Mexico may stabilize. Then our oil problems will be trivial. And, of course, other emerging industrial countries like India and China are going to use restraint in polluting the air, and will agree to send our manufacturing jobs back to us in a sign of good will. And, of course, the environmentalists will put away their pipe dreams for the benefit of the American public.

In the mean time, will someone please get the monster out from under my bed? I can’t sleep.

Mercer Tyson

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