Warning: Energy rationing ahead
By: Irwin M. Stelzer
Examiner Columnist
June 26, 2009
Saudi officials use oil revenues to sponsor the global dissemination of their misogynist, anti-Semitic, jihadist version of Islam, including sponsoring a school in Virginia that it hopes to expand.
Hugo Chvez relies on oil revenues to support his statist, anti-American regime in Venezuela, as do the Mullahs in Iran. Iraq's oil reserves are such a large untapped source of revenues that Kurds and Iraqis in Basra are willing to kill each other to gain control of the area.
Oil production in Nigeria, Peru and elsewhere impinges sufficiently on the environment to provide a rationale for the activities of rebel groups. God certainly gave us a mixed blessing when he endowed the world with huge supplies of oil.
Which is why it is easy to sympathize with President Obama's goal of weaning us off of our dependency on oil. Reduce the worldwide demand for oil, and you reduce the revenues flowing to assorted bad guys, while also removing at least one source of national rivalries to secure supplies of the so-called Black Gold, and to protect supply routes.
Environmentalists, of course, need no such excuse to want the use of oil reduced: they fear that it is one of the fossil fuels that is producing climate change. So we have a new coalition of strange bedfellows: peacenik greens and the U.S. military that now has the burden of patrolling supply routes and planning to react should even worse guys -- think Al Qaeda -- try to take over the Middle East oil fields.
Independence from foreign oil has been a goal of American presidents since the days of Richard Nixon, during which time dependence on imported oil has steadily increased. But it remains a rallying cry that President Obama finds convenient to garner support for his plan to spend billions on the development of renewable resources -- primarily wind and solar power.
Never mind that neither of those intermittent and inconveniently located sources of energy can ever add much to national energy supplies, or have any significant role in reducing oil imports since very little oil is used to generate electrical energy.
If America is to reduce its oil consumption, it will have to find ways of using natural gas -- gas-industry critics of some of my earlier writings make a plausible case that I have been understating the role natural gas-powered vehicles can play in our transportation economy -- or electricity to move our cars and trucks.
And there's the rub. America possesses vast untapped reserves of natural gas and an abundance of coal with which to generate electricity. But environmental opposition prevents exploitation of our natural gas reserves.
And the green position that there is no such thing as "clean coal," combined with environmentalists' skill at using the judicial process to obtain goals they cannot achieve in the legislature, has caused the cancellation of numerous coal plants.
One utility executive tells me he is reluctant to order new coal plants because the rules of the road can change so suddenly, especially if Obama's environmental czar, Carol Browner, gets the upper hand over more economically sensible economic adviser Larry Summers.
And remember, Judge Sonia Sotomayor wrote a decision, fortunately overturned by the Supreme Court, holding that no matter how costly an available technology is, it must be built into coal plants without any effort to measure the costs and benefits.
No need to comment on nuclear power: Its rising cost, the permanent shut-down of the nuclear waste repository at Yucca Mountain, and procedural delays will combine to limit the role of new plants.
Making it even more difficult to reduce oil use is politicians' fear of applying the most effective deterrent to gasoline consumption -- a tax on gasoline that would discourage driving, make consumers consider the real cost of larger vehicles, and provide funds that can be used to reduce Social Security and other taxes on jobs.
The result of an energy policy that restricts the use of almost all fuels, either explicitly or implicitly, is rationing, the use of government fiat to allocate available supplies. This will reduce use of gasoline by restricting the size of cars (that's what Obama's fuel-efficiency standards will do).
It will also reduce lighting levels in homes and offices by outlawing incandescent bulbs, mandate sensors to shut off lights in empty rooms and a host of measures that, as The Wall Street Journal puts it, will "prod Americans to curb their energy consumption É more fundamentally than they have in the country's history."
As with health care, government energy policy in the end is aimed at curtailing use, and will result in covert rationing.
Examiner Columnist Irwin M. Stelzer is a senior fellow and director of the Hudson Institute's Center for Economic Studies
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