Anti-Energy, Anti-Industrial Policy: When is Enough Enough?

By Paul Driessen -- March 11, 2011

“Energy is the master resource, because energy enables us to convert one material into another. As natural scientists continue to learn more about the transformation of materials from one form to another with the aid of energy, energy will be even more important.”

– Julian Simon, The Ultimate Resource 2 (Princeton: Princeton University Press, 1996), p. 162.

Energy is the master resource, as Simon says. Even anti-energy zealots have admitted as much in their more sober moments. “A reliable and affordable supply of energy is absolutely critical to maintaining and expanding economic prosperity where such prosperity already exists and to creating it where it does not,” Obama’s science advisor John Holdren once said. (1)

UK Energy Trouble

The indispensability of affordable, plentiful energy has come to the fore as anti-energy policies have collided against human needs. During Britain’s coldest December in a century, families were forced to choose between keeping homes warm and feeding their children nourishing meals – thanks to climate policies that have forced extensive reliance on wind power and deliberately driven energy prices skyward.

Barely two months later, the UK’s power grid CEO informed the country that its days of reliable electricity are numbered. Families, schools, offices, shops, hospitals and factories will just have to “get used to” consuming electricity “when it’s available,” not necessarily when they want it or need it. A new “smart grid” will be used to allocate decreasing electricity supplies, on a rolling basis or according to bureaucratic determinations as to which consumers most need available power – mostly from wind turbines that provided a pitiful 0.04% of Britain’s electricity during its coldest days last December.

Germany Too

Meanwhile, the EU’s Energy Commissioner warned that German electricity prices are already at “the upper edge” of what society can accept and businesses can tolerate. Taxes, levies and regulations imposed in the name of reducing carbon dioxide emissions and global warming are forcing companies to relocate to other countries and causing “a gradual process of de-industrialization” across Germany.

Former German Chancellor Helmut Schmidt called for a full and independent investigation of the Intergovernmental Panel on Climate Change, its practices and suspect science. The IPCC no longer has integrity or credibility, he said, and some of its researchers “have shown themselves to be fraudsters.”

To all of which, the autocratic European Commission essentially said “Drop dead.” The EU, it decreed, will spend $375 billion (€270 billion) annually to slash CO2 emissions by at least 40% below 1990 levels by 2030, and 80% by 2050.

Obama’s Third World Energy Plan

Welcome to the Third World, Europeans, where costly electricity is available only from time to time, at unexpected hours, depending on bureaucratic whims and how much power wind turbines and other “environment-friendly” generators can muster.

Is the USA next in line? The United States is reaping imaginary bounties from its $814-billion “stimulus” spending orgy. It hemorrhaged $223 billion in red ink during February alone – on its way to a projected 2011 deficit of $1.5 trillion, the Congressional Budget Office reports.

Over 13.7 million Americans remain unemployed; another 8.3 million are involuntarily employed only part-time; black unemployment stands at 15.3 percent; and gasoline prices have hit $4 per gallon, foretelling more rough waters ahead for the still fragile US economy.

America depends on abundant, reliable, affordable energy – 85% of it hydrocarbons. Coal generates half of all US electricity, and up to 90% in its manufacturing heartland – versus 1% from wind and solar. Newfound natural gas supplies promise a sea change in US energy supplies and electricity generation. However, oil still powers transportation, shipping and petrochemicals – and in 2010 the United States exported $337 billion to import 61% of this precious liquid fuel.

Thankfully, the Obama Administration, environmentalists and (mostly Democratic) politicians take this situation very seriously, and are doing something about it … according to their parallel universe.

Democrats are willing to trim up to $5 billion from the $3.8 trillion 2011 federal budget (0.15%), while Republicans insist that $57 billion (1.5%) should be “slashed.” As to reducing the deficit by increasing revenues, most of that discussion still centers on raising taxes on whatever “rich” people are still out there. On the energy front, things are truly disconnected from reality.

Our Energy, Our Potential

Unlocking America’s still abundant hydrocarbon resources and unleashing our innovative, hard-driving free enterprise system would generate hundreds of billions of dollars in leasing, royalty and tax revenues for federal, state and local governments. It would put millions back to work … help stanch the flow of red ink … keep tens of billions of crude oil spending and investment in America … and create enormous new wealth, instead of redistributing a dwindling pool of old wealth.

We must drill safely, use fuel more efficiently in vehicles and power plants, and get more from every underground reservoir. And we could do so, if government would allow it.

Just consider the incredible revolution that the genius of American capitalists has presented the world: hydraulic fracturing or “fracking” to tap previously inaccessible oil and gas deposits. This technology has turned “depletion” and “sustainability” claims upside down. It has already doubled US natural gas reserves and given North America over a century of recoverable gas, at current consumption rates.

It is also unlocking oil wealth in the vast Bakken shale formation of Montana, North Dakota and Saskatchewan. Oil production there has already soared from 3,000 barrels a day five years ago to over 225,000 today. The US Energy Information Administration says it could reach 350,000 barrels a day by 2035; industry sources say it could top a million barrels by 2020. Related oilfield employment has soared from 5,000 to over 18,000 in the same five-year period, and could eventually reach 100,000 jobs. At $100 a barrel, even 350,000 barrels a day could mean $1.6 billion in annual royalties, from Bakken oil alone.

The new Made in America technology is already changing energy, economic and political landscapes in Europe, and will soon do so across the globe. It is a technologically possible and economically affordable solution that generates bountiful jobs and revenues – as opposed to pixie dust solutions that require perpetual subsidies and address speculative problems. Offshore and ANWR drilling could do likewise.

Energy vs. Them

Unfortunately, the White House, Environmental Protection Agency, Interior Department, and too many in Congress, courts and state legislatures are determined to restrict and obstruct this hydrocarbon revolution. They want to select business winners and losers, force America to convert to expensive, subsidized, unreliable, land-intensive wind, solar and ethanol power – and tell people how much energy they can have, and when.

EPA Administrator Lisa Jackson is using groundless claims about possible groundwater contamination to delay fracking operations. Because Congress rejected cap-tax-and-trade, she has rewritten the Clean Air Act to label plant-fertilizing carbon dioxide a “pollutant” and restrict CO2 emissions from power plants, refineries and other facilities. That will further increase energy costs for families and businesses, forcing more companies to lay more people off or close their doors – even as China and India build new coal-fired power plants every week, sending global CO2 levels higher and higher.

Interior Secretary Ken Salazar has shut down leasing and drilling in the Gulf of Mexico, put tens of thousands out of work, ignored court orders to end his moratorium, and issued decrees that make millions of additional onshore and offshore acres off limits to drilling. He has blocked exploration in ANWR because its oil riches won’t make us energy independent (as though even massive wind, solar, ethanol and electric car programs would do so).

President Obama wants oil, gas, coal and electricity prices to “skyrocket,” to make “green” energy appear more attractive. Energy Secretary Steven Chu wants to “boost the price of gasoline to levels in Europe” – over $8 per gallon! Most of all, these anti-hydrocarbon politicians want a self-sustaining political-environmentalist-industrial-public sector union complex based on government subsidies to favored industries and companies, in exchange for campaign contributions that will keep them in power.

This palpable, intolerable insanity must end. It’s time to tell Congress we need real energy for real jobs, real revenues and a revitalized America. And we need it now.

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(1) John Holdren, “Memorandum to the President: The Energy-Climate Challenge,” in Donald Kennedy and John Riggs, eds., U.S. Policy and the Global Environment: Memos to the President (Washington, D.C.: The Aspen Institute, 2000), p. 21.