Energy Laws Doing More Harm than Good
August 4, 2008
In keeping with the theme of this issue, we need to address the U.S. energy crisis. It is a true predicament, will not get better quickly and presents problems caused by the “Gang of 535,” who is more responsible for the current situation than anyone else. But wait … it gets worse.
America faces an election where positions (see Table) by the two ultra-liberal Presidential contenders are quite important, assuming you can see any difference. Both candidates have equivalent misunderstanding of energy economics, in part I think because neither ever had a “real-world job.” T
he new President’s policy views are important. World energy use is forecast to grow 50% by 2030, as estimated by the U.S. Department of Energy, with liquid fuels being 33% of total use. Concurrently, U.S. crude oil refining capacity is expected to drop by 3 MB/d from a current 18.5 MB/d. World coal usage is projected to increase slightly, reaching 29% of the total, remaining the same in the U.S. as elsewhere. All hydrocarbons (coal, oil and gas) emit a molecule of CO2 for every carbon atom burned in the fuel, so it makes little difference which fuel is consumed regarding greenhouse-gas emissions. World nuclear capacity should rise from 374 (currently) to 498 GWt in 2030, with the U.S. adding only 15 GWt, or 12.1% of added capacity.
What these two know-nothings think, however, pales before inaction and incompetence of the Gang of 535. There are in excess of 1,000 pending House or Senate energy bills with, by my count, only 68 mentioning supply and most reflecting pathetic incompetence of the authors and supporters. Most are anti-energy-supply like H.R. 2335 and H.R. 6246, which prohibit retail price gouging (duh) for liquid fuels.
S. 3044 does the same plus focuses on tax codes to repeal tax deductions for domestic drilling costs, a move the Congressional Research Service has explained will reduce domestic production by 3-6% and increase crude oil imports 8-16%. Bill H.R. 6251 seeks to penalize oil companies with existing leases if, in federal opinion, the leased idle lands are not producing oil, whether or not it has any oil. The next Congress will have a new array of these same stupidities.
Also pending, probably without passage in this Congress but predicted to return, are a few essential measures. These address removing restriction on drilling in U.S. coastal waters and in a small part of ANWR, changing regulations that hamper refinery capacity expansion and facilitating oil shale development. Federal law prohibits exploration and drilling in 85% of coastal waters except in central and western Gulf of Mexico. The Department of the Interior (DOI) estimates that 19 billion barrels are available at such offshore sites. But Congress has denied funding to the DOI to perform leasing since 1982. The Deep Ocean Energy Resources Act (H.R. 6108) and National Environmental and Development Act (H.R. 2784) remove this de facto ban.
Another 10 billion barrels in ANWR – Alaska’s 19.6 million acre wilderness where about 2,000 acres are needed to assure oil production and delivery – has been prohibited since 1980. The American Energy Independence and Security Act (S. 2758) and House companion bill (H.R. 6107) would allow leasing and production.
A third major area for law change, probably ill fated in this Congress but to reappear in the next, is the effort to streamline and expedite refinery permitting and expansion processes. H.R. 6139 (Refinery Permit Process Schedule Act), with the related H.R. 2471 and Senate companion S. 2973 (American Energy Production Act), is essential.
Finally, hundreds of billions of barrels of oil from shale are in U.S. western states. This critical avenue must be opened by removing Congressional restriction on funds to operate the lease program. The Oil Shale Opportunity Act (H.R. 6211) and Oil Shale Regulatory Act (S. 3062) are needed and waiting in the wings.
This summary concerning energy legislation should give readers a reason to write their Senators and Congressmen. IH