Power Plays – June 2011

By wmadministrator

The control of a nation’s energy determines that nation’s prosperity and security or lack thereof.  Just ask T. Boone Pickens, Texas oil magnate, who strongly supports development of wind power and use of America’s natural gas reserves. Pickens readily admits that wind power development would require heavy federal government subsidies.

Gasoline prices in the U.S. have nearly doubled in the last three years, so debate is overdue on domestic energy.  First, no amount of ethanol as fuel can take the place of gasoline to power vehicles. The expense of converting corn to ethanol as fuel makes it unrealistic and the use of ethanol as fuel is driving food costs upward. Next, ethanol (or battery power) will not work in semis and other heavy-duty vehicles.

The most realistic alternative fuel to replace diesel in these heavy-duty vehicles is natural gas. Recently, natural gas has been found in abundance in Appalachia, Texas, Oklahoma, Arkansas and Louisiana. Enough has been identified to supply the United States for more than 100 years. This reserve is more than twice the amount of Saudi oil reserves.

T. Boone Pickens calls our natural gas reserves, which could cut by 50 percent our reliance on OPEC oil, “a game changer.” He supports congressional action to access this fuel. Oil sands and oil shale, plentiful in the United States, offer other domestic sources of energy to reduce reliance on foreign oil, but only if the federal government permits the exploration and development of these sources.

U.S. energy policy seems to prefer continued reliance on Mideast oil, simply governing by fiat and executive order. The administration has done an end run around a federal judge’s ruling that required opening up the permitting process for drilling for our own domestic oil. The Heritage Foundation reports that as of February 2011, at least 103 permits were awaiting review by the Bureau of Ocean Energy Management, Regulation and Enforcement. Since February, the administration has issued on average only 1.3 permits a month, a 78 percent reduction in the monthly average according to the latest Gulf Permit Index.

Meanwhile, oil companies migrate to other nations to explore and drill.  Other companies are simply forced into bankruptcy at a cost of thousands of jobs when our economy can ill afford such job loss. Failure to use God-given natural resources to benefit American citizens is not responsible governing.

On a March trip to South America, the president promised Brazil that the United States would help finance that country’s effort to develop its off-shore resources.  His administration won’t permit any significant U.S. drilling in Alaska or off-shore, yet America will help Brazil drill off-shore and then import its oil for our domestic use.

Politicians continue to pander to corn growers about government subsidy for converting corn to ethanol. This is not only grossly expensive and questionably efficient, but it negatively impacts food costs. Even Al Gore now disavows its virtues, admitting he wanted to help farmers in Iowa.

Coal, a plentiful resource, continues to be Kentucky’s energy ace in the hole.  Approximately half of America’s and the world’s electricity is generated by coal. Burning coal is vastly cleaner with current technology and methods, and it results in cheaper power costs for Kentucky and elsewhere.

A climate scientist quoted in the Atlantic Monthly states that stabilizing carbon dioxide concentration in the atmosphere would require the world to reduce its emissions to Kenya’s level; for America that’s a 96 percent reduction.  Nations with hundreds of millions of people in poverty would have to “forgo the energy-intensive path toward wealth that the U.S. has traveled for so many years.” Are Americans prepared to give up current standards of living that support our modern society to live like a third-world country?

Please wait...

Subscribe to the FASTER LANE business newsletter.

Subscribe and receive breaking Kentucky business news and updates daily.