Energy prices may lead to another Revolution

I filled up the gas tank yesterday - $51 for 14+ gallons of gas. Last summer, I could fill the tank for $30 or less. Some people are saying demand has increased far faster than supply, driving up the price of an ever-scarcer commodity. Others are blaming the increase on the falling value of the dollar in world trade. Still others are blaming "greedy oil companies" for making"outrageous" profits, of OPEC keeping a lid on production to drive up prices, and the US filling the Strategic Petroleum Reserve reservoir. While all those factors contribute to what's going on today, it's actually much more complex than any of this.

It's true that demand has increased significantly. It's also true that there have been some major discoveries recently that, if brought online, would greatly increase supply, and offset the increased demand. There have been new oil and gas fields
discovered in Brazil, Chad, Sudan, Siberia and the Gulf of Mexico. It's going to take from five to ten years for those fields to come fully online, however. In the meantime, oil and gas prices are going to remain relatively high. Here are some of the reasons output cannot immediately grow to meet demand:

1. . Oil and gas production in many areas are threatened by war or political unrest. There is a growing revolution in southern Nigeria that has significantly reduced production from that African nation. The situation for nations around the Persian Gulf is in a constant boil, with war in Iraq and terrorism or the threat of terrorism affecting most of those nations, and Iran's attempt to change the Persian Gulf into an Iranian-controlled lake. Most of the petroleum reserves in Chad and Sudan are in the Darfur region, currently the scene of genocidal murder. The situation in Angola and several other West African nations isn't very attractive to foreign investment - investment that is essential to develop the oilfields there. Venezuela's behavior - confiscating or forcing out foreign investment - has resulted in a net decline in overall output. Iran is just one of several countries that has put off maintenance for immediate profit. That, too, has resulted in a decline in production.



2. . China and India are rapidly modernizing. This is taking a larger and larger amount of energy, much of which comes from oil and gas. At the same time, neither of these nations has a significant enough internal source of oil and gas, forcing them to import it from elsewhere. With a virtually stagnant output, the increasing demand is pushing prices higher.



3. . The US dollar has long been the "currency of choice" for oil and gas deals. The US dollar has significantly lost value over the last couple of years relative to currencies from other nations, especially the Euro. That, too, has contributed to the rising cost of all commodities imported into the United States, especially oil.



4. . There are only a few economically sensible alternatives to oil and gas, and most of those are under-utilized. Nuclear energy could replace some of the use of oil and gas in the production of electricity. Solar,wind, biomass, tidal and geothermal energy production can help, but only to a limited degree. These "alternative energy" options just aren't economically feasible - and frequently aren't even mechanically possible. Making electricity cheap enough to replace oil and gas home heating would help with the overall program, but only to a small degree.



5. . "Greedy oil companies" make far less profit on oil and gas than the Federal or State governments takes in taxes, and even less than what it costs in regulatory over-kill to produce useful products. Government intervention is far more of a problem than it's a help.



6. . The high cost of environmental activism significantly adds to the plight of the "common people". Environmental activism has kept the United States from building a single new refinery, adding a new nuclear power plant, opening new oilfields to production, increasing and modernizing the delivery network for oil and gas, and instituting many, many other possible solutions to the current problem. At the same time, they have successfully diverted tens of billions of dollars into uneconomical, impractical, and downright harmful "alternative energy solutions" that will never be more than minor contributers to satisfying our energy needs.
   
   
7. . "NIMBYism" is alive and well, and also significantly contributing to today's energy crunch. "Not in my back yard" means "not in my town/county/state" for a lot of people. It keeps the United States from drilling for oil and gas in many locations in the Gulf of Mexico, from building nuclear power plants where they're most needed, from building or modernizing refineries, and more.

I doubt the United States could ever be totally "energy independent". We have too many links to Canada and Mexico, and a very high demand. At the same time, we could greatly reduce our dependency with a little bit of common sense.

1. . We need to open up known reserves for production. That includes the coal reserves in the hastily and ill-advised Escallante/Grand Staircase "national monument", oil and gas fields in the Alaska Wildlife Refuge, the Naval Petroleum reserve, the Gulf Coast, and offshore on both the Atlantic and Pacific coast, developing what geothermal production areas we have, and updating and expanding the national energy distribution networks.



2. . We need to build at least six new refineries, and upgrade and enhance the capabilities of at least 2/3 of existing ones.



3. . We need to increase the percentage of electricity generated by nuclear power to where it accounts for 25% of our electrical output. France gets almost half of its electricity from nuclear power production. I'm sure we could easily reach a goal of 25% within ten years.



4. . We need to review ALL government rules and regulations regarding energy, keeping those that are beneficial and getting rid of those that aren't.



5. . We need to look at our environmental track record, see what works to both support our energy development and protect our wildlife resources, and scrap the rest.



6. . Eliminate "alternatives" that cost more than they'll ever be worth. The money to support these "alternatives" could better be used to study ways to make both energy production and energy use more efficient and cost-effective.



7. . Put an end, once and for all time, the stupidity of "Anthropomorphic" or "catastrophic" "Global Warming", and the destructive forces inherent in "addressing" this non-problem. We don't know enough about how the complex interplay between sun, water, wind and land affect overall weather patterns, or what contributes to changes. Until we do, it's impractical to implement costly and dangerous "remedies" that may cause more harm than help. At the same time, increase the study of atmospheric sciences so that real data, instead of misleading, "cherry-picked", or downright fraudulent "data" (hockey stick, anyone?) is used to make sensible, cost-effective, and workable decisions about the future.

There IS an energy crunch. A lot of it is self-inflicted, not only for us, but for the entire world. The way to make it through that crunch is to implement what will help, and quit trying to strangle or destroy the means of eliminating that crunch. This needs to be the top priority of every lawmaker in the United States, not cosmetic band-aids that do no good. If gas gets to even $5 a gallon, a lot of people are going to be very upset. It didn't take much to bring about the American Revolution of 1776. High energy prices could well be the trigger for another one.