Investor's Business Daily, March 22nd, 2007
Energy Policy: As gasoline prices once more top three bucks a gallon in California, we are reminded that our growing economy will require more energy, not less, and that inaction is not an option.
For the third time since fall 2005, and the third time ever, pump prices have risen above $3 a gallon. AAA of Northern California has reported a 45-cent jump in one month, for a statewide average of $3.11 per gallon of self-serve regular.
Before greedy oil companies are blamed, we need to remind our state and national legislators that the law of supply and demand can't be repealed. No new refineries have been built in decades, and no new domestic supplies of oil have been developed. Our economy and our transport needs continue to grow. Do the math.
U.S. refineries have expanded their capacity at 1% a year over the past decade, but no new ones are being built and haven't been for decades. Like the cars they fuel, periodic maintenance is required.
Production in California was off 6% for the week ended March 2 as refineries shut down for maintenance. There's little or no slack in a system complicated by the need for "boutique" fuels for different seasons and areas.
Supply is also restricted by the lack of domestic energy development. The American Petroleum Institute reminds us that there are more than 131 billion barrels of oil and more than 1,000 TCF (trillion cubic feet) of natural gas ready to be exploited in the U.S.
Much of these resources -- 78% of the oil and 62% of the gas -- are locked up beneath federal lands in places like the frozen tundra of ANWR and the coastal waters of the Outer Continental Shelf.
It used to be the weather that everybody talked but did nothing about. Now it's energy production no one does anything about, lest the environment be laid waste by its extraction and the climate doomed by its consumption.
After all, Al Gore has told us the internal combustion engine is a greater threat to mankind than terrorism. Better to worry about Los Angeles disappearing under a rising Pacific Ocean than under the mushroom cloud of a jihadist nuke.
So what about alternative fuels? Here, too, we find lots of talk, little action and no small amount of hypocrisy. If Democrats and their green allies were serious about curing our "addiction" to oil, they'd fight tooth and nail to drop the 54-cents-a-gallon tariff the U.S. imposes on ethanol from Brazil and other foreign producers.
But our cars are only one part of our energy picture. The jobs we drive to consume energy too. According to the Energy Information Administration, the U.S. will require 45% more electricity -- some 300,000 megawatts -- by 2030. Where will that electricity, needed to charge our hybrids' batteries, come from?
We suggest nuclear power, something that was not included in Al Gore's congressional testimony about a "planetary emergency." The 103 commercial reactors now online generate nearly 75% of the electricity that comes from sources that do not emit greenhouse gases into the atmosphere.
European countries such as France get up to 80% of their electricity from nuclear power, and last we heard Parisians don't glow in the dark. South Carolina gets 55% of its electricity from nuclear power; California gets 55% of its electricity from natural gas, which we're no longer allowed to look for.
Maybe we can put turbines outside each state capitol and the U.S. Congress. There's a lot of wind being generated inside.
Copyright 2007 Investor's Business Daily, Inc.
