Malcolm, Let's hope it's Christ- Because the Clinton-Gore Adminisntration was an unmitigated absolute disaster in terms of our national energy policy....I thought I'd reproduce in full Denise Bode's article, of the Oklahoma Corporation Commission.
Let's see what this OCC Member thinks of Clinton-Gore's handiwork in energy for the last eight years....(and Jim- That reference to Christ was for you....;)
Why Are We Facing Energy Shortages
In Energy Rich America?
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The answer to the question of why we are facing energy shortages and high energy prices in America is a simple one: America's energy infrastructure is being shut down. New construction of any energy facilities, particularly on federal lands, is heavily discouraged by government policy. And in spite of the growing high-tech demand for energy, no plan exists to meet our needs. Just look at the results of the past year, which have included shortages of fuel oil, gasoline, and electricity. We are about to face one of the tightest natural gas markets seen since the industry was deregulated, with all consumers facing higher prices and some the possibility of a shortage. I submit it is ten years past time that we focus on rebuilding our productive and delivery capacity for energy in this country.
Why can't we just continue to stumble along from energy crisis to energy crisis? If the price shocks we are experiencing aren’t adequate reasons, some additional facts might convince you.
The domestic oil industry is in shambles. OPEC's recent production increase is having little impact on prices because of the dramatic loss of U.S. production, coupled with increased demand, OPEC's increase in production two years ago dropped oil prices below $8 a barrel, driving many American producers out of business. Foreign oil now accounts for almost 60 percent of the crude used for heat and transportation in this country, an increase of almost 20 percent in less than ten years. That means 10,000 supertankers entering American ports every year.
A crisis also exists in the areas of refining and transportation of gasoline and diesel. Twenty five percent of America's refineries have closed, many in the interior of the U.S., and proposed new EPA regulations are expected to force more out of business. For those refineries that stay open, environmental law has resulted in as many as 30 different gasoline formulas, shipped across the country from the coasts in an aging pipeline system. Price spikes are no surprise.
Demand for natural gas is threatening to outstrip supply. Natural gas supplies are likely to be short this winter. The historic lows in crude oil in 1998 and 1999 dramatically impacted natural gas production, 90 percent of which is produced here in America. This is because the majority of natural gas is produced by domestic producers whose capital for drilling comes from income from oil and gas production. With no income they stopped drilling for two years. While there are now about 800 rigs drilling for natural gas, current estimates say we need 2,000 to replace existing natural gas reserves and meet new demand. They simply don’t exist. No new rigs are being built, and even if they did, there aren’t enough qualified people to man them. They have long since found work in other fields.
Policy discourages drilling. Policymakers keep forgetting we won’t have a supply unless we drill for it. A recent NPC report recommends that access to supply for exploration and production must be increased, especially on federal lands where the current policy forbids such activity. Almost $1.5 trillion (in constant dollars) in investment dollars will be required in order for production through 2015 to meet estimated demand, but there is little in the way of policy to encourage such investment.
Look beyond the gas pump and the furnace to your electric bill. The same lack of adequate infrastructure in energy production and transmission is also at the root of the electrical shortage some Americans have experienced. California provides a harsh lesson of what can happen when government barriers and bad planning collide head-on. In San Diego, electric bills have shot up as much as 700 percent in one year’s time.
Natural gas is the fuel of the future for electrical generation. Because of its environmental advantages, ninety-six percent of planned power generation projects will be gas-fired, upping demand even more. Again, we don’t have policies at the state and federal level that will result in production sufficient to meet these demands.
We are facing a national energy crisis that threatens our robust economy. I don't believe the American public wants to put up with a future of uncertainty and energy price shocks. The good news is it can be averted with policies that will allow the development of the resources in energy rich America. We must begin now to rebuild our national energy production, refining, and delivery systems to provide reliable, abundant and reasonably priced energy to fuel this high-tech, energy intensive American economy.
Your Commissioner,
Denise Bode |
