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Losing the energy race
Shock and awe — we are living it! We stand, mouth agape, staring at the pump — at $4 gallons and fast-emptying pocketbooks. Even worse, with crude oil already costing more than $120 a barrel, many predict this wave has yet to crest.
And while we wait for the price to peak, spending shrinks and the economic outlook worsens. Our energy policies have failed us, and now, we pay the price — literally.
In response, politicians call for windfall profits taxes and temporary gas tax holidays. Once again, we're forced to stomach politically motivated, short-term non-answers instead of long-term solutions. Here's a thought: Rather than vilify the oil industry for our sticker shock, let's take a hard look at the actions of our federal government.
For years, we've approached domestic drilling in a politically correct manner, placing caribou on a pedestal while ignoring American consumers and national security. Politicians chose to outsource and import, instead of expand and drill. As a result, we fill the coffers of foreign nations instead of boosting American gross domestic product.
In a recent press conference, President Bush suggested drilling in Alaska's Arctic National Wildlife Refuge. He might be on to something. Despite the hysterical claims of environmental lobbyists, oil and the environment can mix. Caribou and other wildlife have expanded and flourished in and around Prudhoe Bay, apparently unaffected by the relatively primitive oil and gas development in the area.
And technology in the oil industry has improved mightily in the years since the Arctic Slope was first tapped. Indeed, two leading environmental groups, the Audubon Society and the Nature Conservancy, have allowed oil and gas production on several of their most important and unique nature preserves.
Unfortunately, the United States Congress has also banned energy exploration in 85 percent of our coastal waters. As a result, while Cuba, in partnership with China, drills closer to the U.S. coastline than we do, the United States goes hat-in-hand to Saudi Arabia, Venezuela, Canada, Nigeria, Mexico and even Iran. Our lawmakers' decision to block domestic access harms both the public and the environment.
Since 1991, oil tankers have spilled 3 times more oil than offshore platforms. Furthermore, when tankers leak, they tend to do so near shore, resulting in more severe environmental damage. Thus, because platforms are less prone to spills than are tankers, producing more oil off America's coast could be environmentally beneficial.
It is estimated that beneath America's coast lies enough oil to fuel 60 million cars in the United States for 60 years — and enough natural gas to heat 60 million homes for 160 years.
Our nation — and the world — will need significant amounts of oil and natural gas well into the future. The U.S. Energy Information Administration says the United States alone will need 19 percent more energy in 2030. Globally, that number jumps to 55 percent.
While renewables and alternatives are a part of tomorrow's energy mix, they cannot represent the entire answer. In the year 2030, those "fuels of the future" will only comprise 9 percent of consumer demand. More than 60 percent of demand will continue to be fulfilled by oil and natural gas. We must take those numbers to heart and remove barriers to domestic drilling.
In China, more than a billion people are beginning to taste unparalleled economic success. Each year, increasing numbers of Chinese citizens demand cars, air conditioning, televisions, refrigerators, personal computers and other electronics. Each of these benefits of progress will require more, not less, energy.
And the same story echoes around the globe as economies liberalize and material progress becomes more widespread — and the race for energy gets fiercer.
While political pundits speculate that America will stay ahead of the curve, thousands of unemployed American workers tell a different story— we are already falling behind the eight ball and political roadblocks to domestic energy development are partly to blame.
Here's a shocking fact: The world's largest private oil producer, Exxon, ranks just 16th in the world. Government-controlled oil fields in Saudi Arabia, Iran, Iraq, Venezuela, Russia, Mexico and Libya contain more fuel than America's largest oil producer owns. Yet, if allowed access to U.S. oil reserves in Alaska and off the coast, American oil companies could increase our reserves about fivefold — taking the United States from 11th place to fourth among countries with proven reserves.
The United States is losing the energy race not because we are being beaten but because we don't allow domestic companies to compete. For our nation's security, for our consumers' well-being, and for our workers' continued economic progress, it's time for Congress to let American companies get in the game. Let the drilling begin.
H. Sterling Burnett is a senior fellow with the National Center for Policy Analysis, a nonpartisan, nonprofit research institute in Dallas.
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