Saturday, March 10, 2012

Underlining The Need For U.S. Energy Independence

Pogo said, "We have met the enemy and he is us." He easily could have been referring to North America's lack of a collective and serious effort to achieve energy independence.

We absolutely need to declare war on ourselves in the fight for energy independence. Only a collective "can do" spirit and national resolve can make it happen. On the other hand, it's that simple.

The rewards of success will be well worth the fight, and there's virtually no risk involved. The only risk lies in doing less than all we can do.

That's because the outcome, even if we fall short of the ultimate goal, would be between the best case and an almost best case. As they say around the baseball diamond, you can't steal second with your foot on first. Let's get moving.

So here's the question du jour. Will America soon make a serious effort to become energy independent and by so doing become much less dependent on imports?

North America has vast amounts of proven recoverable but largely untapped offshore and onshore North American oil supplies. We have enormous amounts of coal and natural gas as well, and we know how to build and operate safe nuclear facilities.

So What's China Doing?

Our technological capability is absolutely first class as China Foothold in U.S. Energy makes clear, "Since 2010, Chinese companies have invested more than $17 billion into oil and gas deals in the U.S. and Canada, . . . giving their energy-thirsty nation a long-coveted foothold in a region known for innovative new drilling techniques. North America has become China's top region for oil and gas deals. Mr. Fu has been leading the push, first as chairman of China National Offshore Oil Corp., known as Cnooc, then as chairman of China Petrochemical Corp., called Sinopec, one of the largest oil companies in the world."

Here's an added kicker. If we get serious about supplying as much of our energy needs as possible, our national security will be much improved. As a result, future generations of Americans will be much more secure, in addition to being more prosperous as well.

And in addition to supplying as much as possible of our own needs, will we team up with countries such as Canada and Mexico in order to better shape North American energy demand and supply for at least the next fifty years? Or will we sit on the sidelines as we've done for far too long?

We simply must not allow our politicians to put things off and continue to sell us on the unrealistic dream of solar, wind and speculative conservation investment schemes being able to solve our problems anytime soon. Ain't gonna happen--at least not during the next few decades.

Even if we fail to achieve total energy independence, we'll come close enough. It will be far better to make a total all hands on deck attempt at energy independence and fail than not to try. Nothing ventured, nothing gained.

Now let's look more closely at today's situation. Tensions Raise Specter of Gas at $5 a Gallon outlines the political issues associated with today's high and rising gasoline prices:

"With no clear end to tensions with Iran and Syria and rising demand from countries like China, gas prices are already at record highs for the winter months . . . . And gas prices could rise another 50 cents a gallon or more, analysts say, if the diplomatic and economic standoff over Iran’s nuclear ambitions escalates into military conflict or there is some other major supply disruption. . . .

The prospect of such a price increase underscores the political and economic risks that Western political leaders must contend with as they decide how to address the Iran situation. A sharp rise in the prices of oil and gas would crimp the nation’s budding economic recovery. It would also cause big political problems at home for President Obama, who is already being attacked by Republican presidential candidates over gas prices and his overall energy policies, and for European nations struggling to deal with the Continent’s debt crisis. . . .

That fear is tempered by optimism — if tensions ease in the Middle East, experts predict that energy prices will fall, with gasoline at the pump potentially dropping 50 cents a gallon or more because supplies are relatively strong in many parts of the country. Some analysts say the world price of oil could fall to $80 a barrel if tensions eased. . . .

Neal Soss, chief economist of Credit Suisse, said sustained high gasoline prices would definitely have an impact on the American economy. “As a rule of thumb, a penny a gallon is worth a bit over $1 billion in consumer purchasing power if it is maintained a whole year. A dollar more would be something in excess of $100 billion, which is about the size of the Social Security tax cut.”

Despite a fall in gasoline demand in the United States and Europe, global oil markets are tightening because demand for energy from Asian countries, particularly China and India, is rising at surprisingly strong rates even as output is declining from several important producing countries."

Discussion and Analysis

President Obama said recently that the upcoming 2012 election was the reason Republicans are calling for more drilling. Incredibly he then added that additional drilling and a greater supply wouldn't bring gasoline prices down. He's flat wrong about an increasing availability of domestic supply not favorably impacting prices.

In addition to the benefits of greater oil supplies on gasoline and related products, there would be the extremely positive effect on employment and governmental increased tax receipts. All we have to do is muster the courage to become serious about increasing our domestic energy supplies.

What's not to like, unless you're a greenie or someone dependent on the support of greenies politically?

And on the politics, I believe that President Obama has really missed the mark on this issue. He's looking at the wrong green. Think dollars.

The environmentalists obstruct jobs and economic growth. They stand in firm opposition to anything resembling national efforts to achieve energy independence.

Why not try to bring down prices by increasing supply? The law of supply and demand will work if given an opportunity to do so, no matter what the politicians say. And my bet is that most of our fellow Americans would like to see somebody give it the 'good old college try,' even if unsuccessful in the end.

As a nation, we now have a great opportunity to change the game with respect to the total supply of world energy. And therefore both our national security and nation's economic prosperity and employment levels as well.

But first the politicians need to act like they're concerned about the best interests of We the People. We need to have a national knockdown-dragout public debate on this asap, or even sooner. If we did, the common sense of We the People would prevail, and that would be a very good thing--for all of us.

And let's not restrict what energy resources we're prepared to use in an effort to lessen our dependence on the bad guys overseas. Things like coal, oil, natural gas, nuclear and everything else available could be produced in plentiful supplies at ~30% below today's global market prices. At those prices, we have plentiful energy supplies, assuming producers would be allowed to drill throughout mainland North America, including Alaska, as well as off our Atlantic, Pacific and Gulf coasts.

As an adder, the proposed Keystone XL pipeline is yet another example ready to go. All we have to do is get the naysayers and obstructionists out of the way.

And none of this requires any taxpayer money. The taxpayer will benefit instead as the private sector does it all without any government "help."

But first we have to get our own greenie dependent political doomsayers to admit that something can and must be done about North American energy independence.

Summing Up

Finally, there are solid grounds for optimism that the decades long "politically correct" effort by misguided but well intentioned environmentalists to thwart all reasonable and balanced efforts to achieve North American energy independence will end in defeat.

Their narrow and harmful stance is being rejected by We the People as our national security, economic viability, employment levels, currency stability, low inflation and overall prosperity are all at stake.

Whenever most of We the People care enough to speak openly, loudly and in unison on any issue, as is becoming the case with energy currently, the politicians will follow along. That's a lesson we all need to learn about leadership in America.

We can and will achieve energy independence or, if not, at least come close enough for horseshoes.

But first, as a nation we have to be able to dream or envision that we can do just that. After the hard part of establishing the collective dream is in place, the actual doing will be easy.

Boiled frogs in the same pan have a way of saving themselves when the heat's turned up all at once.

Thanks. Bob.

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