Energy Dollars and Sense
By Jerry ShenkOne of the most pressing problems for businesses, individuals and families is the cost of energy. Americans are paying too much for the energy needed to run factories and offices, for motor fuel, and for home heating oil.
Aside from taxes on petroleum products and despite OPEC's schemes, petroleum prices are largely demand driven. Demand for petroleum-based energy is increasing world-wide.
Compounding the problem of increasing world demand are the unrest and uncertainty in the Middle East and a hostile Venezuelan government. America and the world are approaching a perfect energy storm. The price of Brent Crude recently passed $100 per barrel for the first time in two years.
The United States Congress is solely responsible for America's energy crisis and the high costs of fuel. While restricting access to American sources of petroleum for years, Congress has been throwing billions of American tax dollars at alternatives to petroleum. Following decades of "investment," alternatives still supply less than 4% of our energy needs. Continual increases in world demand for energy alone guarantees that alternatives will remain a minor part of energy supplies for very long time.
Congress understands that the best way to lower energy costs is to increase the available supply of energy sources. What Congress doesn't grasp is the true relative practicality of available sources. The alternate and new sources of energy that politicians favor are too costly, too inefficient or too far in the future to have a meaningful impact on today's requirements.
Based on their support for and repeated approval of subsidies, a majority in Congress would have us believe that we don't have to find and burn far more of our own oil and coal or build nuclear plants. Congress subsidizes corn ethanol despite the market shortcomings and environmental issues with ethanol. Not only do ethanol and other subsidized alternatives have uncertain futures, they have limited impact on our fuel needs. In fact, alternatives haven't even been useful for frightening world petroleum producers into increasing production and lowering prices in the short term. Even Al Gore doesn't like corn ethanol any longer.
Case closed? Not so fast.
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