We
Need a National Energy Policy Matt
Kobin
SPEECH #3, June 24,
2004
Most powerful country in the
world, <10% worlds population, use 45% of its petroleum.
All without national energy
policy
At least not one that I can
articulate
Given how important energy is
to our economy and national security, shouldn’t we have a 10, 25, 50 year
energy plan in place?
Analogy – city growing….
City plan w/water comparison, sewage even…
What is our national plan for
gasoline?
Given petroleum demand in this
country is rising, not to mention competitor nations like China vying for world
oil, how can we not have a long term plan to address supply?
Tonight want to discuss – why
frustrated, present several ideas get America on the right path
Let’s review recent history
Earliest recollections / Does
anyone in the room remember the gas crisis’s of the 70’s
There were two main causes:
OPEC causing supply problems,
and automobile efficiency at the time.
Let’s talk about OPEC first.
By the early 1970’s, Middle
East oil exporters had actually created a monopoly.
Controlled 75% of worlds oil,
and raised prices.
At that time, average American
car weighed 4,000 pounds / 10MPG
That confluence caused a spike
that in today’s dollars $3.50 gallon
Then an amazing series of
events occurred.
America got wise! Better
decision making happened.
All of the sudden, MPG was an
important feature of the automobile window sticker
Cars got more efficient, we
lowered highway speed limits, and gasoline usage plummeted.
Auto weight went consistently
down and by 1981 the average car weighed 3,202 pounds!
As demand lessened, OPEC lost
its stranglehold on pricing.
We had actually solved the
energy crisis, and by July 1986 – oil selling at $7 barrel
We were on the right path and
the cure all wasn’t regulation or government intervention, but rather the most
powerful force in the modern world - market forces.
Gas prices had come down, and
that was our doom.
Problem is we had no follow
through to this great circumstance we created.
Soon enough Americans got used
to low gas prices, and the manufacturers obliged
Now the average car is back up
to 4,000 pounds
At the same time US oil
production has dropped 25% since 1986.
And today, oil is at $41 a
barrel.
Americans have every right to
shop for groceries in vehicles built for hunting elephants, but we have no right
to whine about the inevitable oil crunch that follows.
We had a golden moment and let
it pass.
Today, we’re right back where
we were 30 years ago, depending on foreign countries to supply our voracious
energy appetite.
And I might add, these are not
friendly Switzerland type countries.
Biggest single region for oil
production still the middle east.
Excepting Iraq, every country
is single party monarchy or dictatorship with no shortage of contempt for
America.
Our inability to get US energy
policy under control finances the entire middle east region.
And because of this dependence,
we look the other way when it comes to human rights abuses, environmental
degradation, and until 9/11, middle eastern terrorism.
Yes, our dependence on middle
east oil is a security problem.
What should we do today to
address this problem?
In short, the solution is to
Tax and Drill.
One party won’t allow
drilling, and no politician ever got elected running on higher gas taxes.
Let me make my case by
elaborating on each of those concepts.
Here’s how taxing would work
(and I say this as a registered republican…)
Establish a floor price for
gasoline, say $3.00 a gallon.
If world prices cause gas to
rise above that amount, tax would be zero.
If gas prices drop below $3 a
gallon, which they will due to that smart behavior and market force I mentioned
before, tax up to $3.00 a gallon.
But the idea here is to KEEP
THE TAX.
As higher prices and reduced
demand cause gas to drop below $3 a gallon, gas stays at $3.00 a gallon, and we
cycle that money back to consumers by corresponding cuts in say payroll taxes or
income taxes.
Now since America consumes 45%
of the world’s gasoline, a significant reduction in our demand will bring down
the world price even further.
Increasing revenues for
domestic use rather than directing revenues to Saudi Arabia, Yemen, and other
less than friendly places.
Let’s talk about the drilling
side of the equation.
US oil production has decreased
25% since 1986
While demand has risen almost
the same amount.
What kind of energy plan is
that?
One of the world’s largest
untapped petroleum reserves is in the United States - Alaska.
Environmentalists say “We
can’t drill in Alaska, it’s special land”
Here’s what I think is
presumptuous about that statement.
Why is our land more precious
than land in Saudi Arabia, Venezuela, or Russia?
Isn’t a butterfly species
that gets decimated in Venezuela just as much of a loss to mother nature as
Alaskan butterflies?
In fact, with our first world
technology and industry regulations, less butterflies will be killed under
American drilling than foreign unregulated drilling.
The point here is we can’t
have it both ways.
If we’re going to drive 4,000
pound cars, we’re foolish not to develop our own energy independence.
In fact, if we’re going to
drive 4,000 pound cars, the increased pollution from those cars is already
killing plenty of butterflies, no matter where the drilling is happening.
So let’s stop being
hypocritical.
Raise gas taxes, or open up
Alaska to sensible drilling.
We can’t be irresponsible on
both dimensions.
Well, if anything I hope I’ve
stirred this topic up enough to get you thinking about it.
You may not agree with my
propositions or you may find my logic flawed.
But that’s the idea – to
think about the issue, and more importantly, act on it.
I encourage all of you to
demand that your representatives develop an energy policy, no matter what that
methodology is.
You know where I stand, and why
I’ve taken these positions.
Now it’s your turn to make
your voice heard.
Madame Toastmaster??