05 January 2011

OIL AND ENERGY IN 2011

The energy picture for the new year seems increasingly dismal. The price of oil continues to rise, making everything more costly, from gas at the pump to home energy to a wide range of industrial uses. Oil, inexpensive oil in particular, is so necessary that life as we know it would not be possible without it. Our dependence is complete, and no amount of clean energy mantra is going to change that any time soon, no matter how many federal dollars we waste in subsidies. The price of oil will escalate over the coming years due to a devalued dollar, rising demand in places like China, and the administration’s virtual prohibition of new oil production in the United States. New production consists primarily of offshore drilling, where there are still plentiful reserves of domestic oil, but which the administration has effectively frozen. In the light of our own needs, the nefarious sources of foreign oil and oil pricing, this is insane. New objections are being raised to pipeling oil from the Canadian tar sands; indeed virtually any new source of oil production is being deliberately frustrated.

Nothing produces electricity as cheaply as coal, which we have in abundance in the United States, yet the EPA is now threatening the entire energy industry with onerous new regulations concerned not with pollution, but greenhouse gasses. Higher electricity prices are thus being deliberately induced by the government. Needless to say, life as we know it would also not be possible without cheap electricity.

The administration wants to wish these things away with vague visions of green energy, and things like expensive electric cars that no one is buying, but which we are all forced to subsidize. Yet despite their aversion to “old” energy sources they have nothing to offer in the way of “alternative energy” that is in any sense practically available now or any time in the near future. These policies are deliberately destructive of our industrial economy, which does not need further blows given stubbornly high unemployment and low growth. We are still the world’s largest industrial economy and ought to make it our business to remain so.

The electorate responded, and will continue to respond to misguided priorities that have nothing to do with economic growth. The top priority of any administration ought to be encouraging economic growth, usually best done by getting out of the way. We also need a cold dose of realism about our true energy sources and needs for the foreseeable future.

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