Is This Energy Crisis Necessary?

About four years ago, I decided to buy a new car. It was an economic decision. Gasoline prices were hovering around the $2.00 per gallon mark, and it was costing more and more money to fill up the SUV. So I bought a small, entry-level passenger car. I figured that I could offset the rising gasoline prices by having to fill up less frequently. As the $2.00 per gallon mark became the rule rather than the exception, I fell into the trap of blaming the oil companies for “price gouging”. The problem is, like many others, I failed to notice some of the root causes for the surge.

Occasionally, a representative from one oil company or another would address consumer concerns by appearing for radio interviews. As they were oil company representatives, I thought it seemed reasonable to assume that they came to each phone interview armed with a copious list of talking points in an effort to justify the high fuel prices. One oil representative I remember even subjected herself to pointed, even abusive phone calls from frustrated motorists. But she held firm. Much of her argument focused on the hurdles related to delivering adequate supply: the restrictions on building new refineries, the state-to-state fuel grade regulations requiring countless variations of gasoline formula and the massive state and federal taxes added on at the retail level.

All-the-while, Al Gore was reinventing himself as a modern day Paul Revere, warning everyone of the potential catastrophe related to “Global Warming”. Gore and his “environmentalist” followers claimed that much of this predicted disaster was inevitable, if Americans did not take action right away. Primary among the required actions was a self-imposed commitment by average Americans to cut down on the use of “fossil fuels”. Oil and coal, among others, were to be resisted. And forget about nuclear energy, too. Jane Fonda and Jack Lemmon took care of that in the 1970s. In essence, Americans were expected to downsize. Quit using so much energy. Oh, and quit enabling terrorists and greedy capitalists by relying on “foreign oil”.

Over the last several years, Gore and his crowd have made significant steps towards scaring people into seeking alternatives. Gone are many of the gas-guzzling SUVs and minivans, replaced with gasoline-electric hybrids. Badly-needed new roads and improvements have given way to seldom-used light rail systems. And “clean”, but highly inefficient Ethanol has been heavily subsidized in order to be competitive with big, bad oil.

Unfortunately, the unintended consequences of the campaign against “Big Oil” have been significant. While self-important Congressmen have been subjecting oil executives to blustery public inquisitions, the conservation and alternative energy movements have failed miserably. Gasoline prices have risen to over $4.00 per gallon, and markets suggest that the price per gallon is only going to get worse. Ethanol mandates have led to shortages in corn supply, driving up food costs across the board. And it takes more energy to produce a unit of Ethanol than that unit produces itself.

In truth, the energy “crisis” is an unnecessarily self-imposed problem. Conservation, when resources are plenty, is a luxury borne of guilt in good economic times. However, in difficult times like these, it’s a job-killing, price-inflating economic parasite. And for what? To prevent fallout from “Global Warming”, a condition that is light years away from being proven? We’re supposed to accept the widespread destruction of our economy on a speculative theory predicting damage 50 years out?

Truth be told, the only crisis regarding energy is on the supply side. China and India, both of whom are more populous than the United States, have had recent industrial surges. Both countries are relatively new players in the worldwide market. The increased demand that they bring to a fixed supply has played a huge rule in driving the price of oil to record levels. The upward trend will continue unless and until new supply can be brought into the marketplace.

In the United States, we have the ability to tap into this crucial supply. Environmentalists have convinced the government to legislate against drilling for oil off the coasts of California and Florida. They’ve also designated an oil-fertile region of Alaska as a “wildlife refuge” to prevent exploration and drilling. Other toxic legislation has led to a restriction on building new oil refineries and pipelines which would have made gasoline more accessible and cheaper to the stretched American consumer. They’ve promoted inefficient alternatives like solar power, wind power and biofuels while restricting access to the sources proven efficient like coal, oil and nuclear energy. As a result, fuel prices are higher, food prices are higher yet demand for oil has not decreased.

If there is really a need and a demand for “cleaner”, yet efficient energy sources, the market will take care of the problem, as long as it’s left alone. Self-motivated investors will steer their money towards reasonable alternatives on the promise of rich returns. The potential to make a tidy profit by meeting a consumer demand will motivate scientists and inventors to develop real alternatives. In the meantime, consumers need relief from the high costs of food and fuel. Why not relax the prohibitive taxes applied to fuel consumption? Why not let oil companies research, discover, drill for, refine and efficiently transport domestic oil? Why not end the artificial promotion of false energy gods like Ethanol? Strange as it might seem, these solutions may re-stimulate an economy that has faltered in large part due to overbearing environmental policies.