Energy Policy

America’s energy policy over the last 40 years has been lacking direction, but President Obama took a big step forward last week. Prior to 1972 America was an exporter of oil, not only supplying all of our own needs but exporting oil to other countries. It is hard to imagine, but in the early 20th century oil literally flowed to the top of the ground in places like Pennsylvania, no wells, no deep sea drilling; it could be had by scraping it off the ground. In 1956 a geophysicist, Dr. M. King Hubbert predicted by 1970 America would reach its “peak”, the point where U.S. oil production would peak. However, the concept of “Peak Oil” is scoffed at since we continue to discover more oil reserves, dismissing that every new barrel costs more to obtain than the previous. In 1973 the OPEC crisis catalyzed our country’s quest for energy independence; seven presidents since influenced America’s energy policies, but yet we remain hostage to foreign sources.

In 1977 President Carter created the Department of Energy; a bloated bureaucracy failing to meet its original mandate. Specifically, the DOE was created to ensure “the U.S. will never again import as much oil as it did in 1977.” At its creation, America imported 8.6 million bbls/day, now we import 10.4 million bbls/day. The DOE has grown from zero employees and zero budget to over 16,000 taxpayer paid civil servants, 100,000 contractors and an annual budget of $28 billion. Today America remains as dependent on foreign sources of energy as in 1977. Contrastingly, President Reagan brought a different view to office regarding energy. Sadly, his view is one that has stayed with Republicans during the last 25 years. Regan, a cornucopian, believed an innovative, technological solution, would appear in time to save us from the tragedy of our misdeeds. Of course, President Reagan, and his British counterpart Margaret Thatcher, were saved by the huge North Sea oil discoveries in the 1980s. Thus, the UK had a thriving economy and postponed energy policy decisions and likewise America did the same.

In the summer of 2008 every American received a wake-up call to energy policy. Stunned, we watched the price of gasoline at the pump soar past $4.00/gallon, considered buying “Smart” cars and left the SUV in the garage. Of course, this brought out the charlatans and snake-oil salesmen seeking government monies and investors for wind farms, off-shore wave generators, battery powered cars, oil sands recovery, and the now famous food-for-fuel, or ethanol disaster. However, grabbing a calculator and doing some math will show many of these methods require more energy than produced, do more environmental damage, or are just silly when considering large-scale implementation.

This past week President Obama made an excellent decision regarding energy policy; announcing $8.3 billion in loan guarantees to build two nuclear reactors in Georgia, the first in the U.S. in 30 years. Ironically, it is a decision that defies his party’s typical philosophy regarding nuclear energy and I am certain the likes of Jane Fonda, and the rest of the anti-nuke crowd, are troubled by this. However, the Hollywood crowd driving Toyota Prius automobiles must understand their energy requirements will come from the “grid”. President Obama, as a Senator and candidate, has consistently supported nuclear power. I would suggest the President add geo-thermal energy to the quest for clean-energy independence. With the unspent stimulus monies President Obama could focus a moonwalk like quest on energy and lead us out of recession and away from dependence on our enemies in the middle-east and South America.