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Friday, June 06, 2008

A Conservative Energy Policy

Dan Kish
This article is well worth reading. It presents a history of the strangle hold the Congress has on domestic energy resources. The members of Congress are the problem.

They say "we can’t drill our way to cheaper gasoline" to hide the fact that they won’t let anyone drill here in the US. They argue adding 70,000 barrels of oil per day from the Strategic Petroleum Reserve – sequestered from use - will help lower prices at the pump but Ronald Reagan’s 1987 recommendation to open ANWR’s million barrels per day will not.
We conservatives believe in conserving and not wasting, for example, water, metals, food or energy. But we also do not believe in living with scarcity when there is no scarcity. If temporarily lost in the woods on a hunting trip, we will conserve and ration our water and food because of its scarcity.

But the US is not lost in a land with a very limited supply of energy. Our continent is enormously wealthy with energy supplies. Congress is creating scarcity by refusing to let vast oil reserves be developed. Scarcity is the talk of demagogues. Scarcity is used to control the masses. Scarcity is the talk of those ridden with guilt from any number of sources.

We conservatives believe in making machines more energy efficient, not just to save energy, but to be more cost effective and make it available for others to use to improve their lives. We also know that physical laws limit energy efficiency. It takes x calories of heat to move x pounds of a car through x miles. Physical laws impose limits on conservation. To be more energy efficient and/or reduce energy consumption, one of four things must happen:
  • make the burning of energy more complete to extract all the stored energy
  • make the transfer of the resulting heat more efficient in its ability to do work
  • reduce the weight of the machine so less energy is needed to move it
  • reduce the number of miles traveled
At some point all of these measures will reach maximum efficiency and we must seek more energy. A conservation program alone will always lead to scarcity. Scarcity is relieved by tapping the vast known reserves of energy. In the meantime, we need to develop new sources of energy and other types of energy. But there is no reason to embrace scarcity while developing new energies when there is plenty of oil energy to go around for decades to come.

The cost of gasoline is being influenced by speculation in the futures market. The prerequisite to such speculation is scarcity. An abundant, available supply negates wild speculation in the futures price.


Addition made on June 10, 2008

Read economist Walter E. Williams' instructive comments regarding futures markets.

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