Point: Energy Policy
Ash Dean
Issue date: 9/7/05 Section: Opinion
- Page 1 of 2 next >
By Ash Dean
Docket Columnist
There is a spectre haunting the American economy. Although not a political movement, this spectre has elevated relatively weak nations to world powers and weakened the world's most powerful nation to a drug addict, desperate to find another fix. This spectre, of course, is oil.
The record high prices of gasoline are but one demonstration of the power of oil over the US economy. Upon first glance, it would seem that the demand of countries such as China and India have forced gasoline prices to this record high. I will grant that this increased demand has driven up world oil prices and thus, domestic gasoline prices. However, this only proves that the United States is heavily dependent on oil: unable to conquer the addiction even in the face of record prices. Obviously, the US economy needs to shift to renewable sources of fuel and do so quickly. Fuel cells and hydrogen are just a few of the many alternative solutions available that could make the United States energy independent in the long term.
Short-term solutions are trickier. Domestic oil producers have not constructed a new refinery in the last quarter century. The majority of the refineries that are currently online are located in the Gulf of Mexico. This is simply bad policy as it leaves our refining capabilities subject to the whims of nature.
In the wake of Katrina, the hardest hit will undoubtedly be those individuals who lost friends and family in the storm, but the rest of the country, deprived of gasoline refined in the Gulf, also face difficult times. The oil companies' preposterous excuse for failing to construct new refineries is that demand has not increased. The facts demonstrate the absurdity of this claim. The United States consumer purchased approximately 177 billion gallons of gasoline in 2004 compared to approximately 134 billion gallons as recently as 1992. That represents an increase of almost 50 billion gallons in less than 10 years. Only oil companies benefit from high gasoline prices and only oil companies have the incentive to keep gasoline in short supply. To provide domestic energy security, and to give the American consumer with some relief, the government must step in and mandate construction of new oil refineries. This may only have a small affect for consumers at the pump, but it will insulate gasoline prices from destabilizing natural disasters.
Docket Columnist
There is a spectre haunting the American economy. Although not a political movement, this spectre has elevated relatively weak nations to world powers and weakened the world's most powerful nation to a drug addict, desperate to find another fix. This spectre, of course, is oil.
The record high prices of gasoline are but one demonstration of the power of oil over the US economy. Upon first glance, it would seem that the demand of countries such as China and India have forced gasoline prices to this record high. I will grant that this increased demand has driven up world oil prices and thus, domestic gasoline prices. However, this only proves that the United States is heavily dependent on oil: unable to conquer the addiction even in the face of record prices. Obviously, the US economy needs to shift to renewable sources of fuel and do so quickly. Fuel cells and hydrogen are just a few of the many alternative solutions available that could make the United States energy independent in the long term.
Short-term solutions are trickier. Domestic oil producers have not constructed a new refinery in the last quarter century. The majority of the refineries that are currently online are located in the Gulf of Mexico. This is simply bad policy as it leaves our refining capabilities subject to the whims of nature.
In the wake of Katrina, the hardest hit will undoubtedly be those individuals who lost friends and family in the storm, but the rest of the country, deprived of gasoline refined in the Gulf, also face difficult times. The oil companies' preposterous excuse for failing to construct new refineries is that demand has not increased. The facts demonstrate the absurdity of this claim. The United States consumer purchased approximately 177 billion gallons of gasoline in 2004 compared to approximately 134 billion gallons as recently as 1992. That represents an increase of almost 50 billion gallons in less than 10 years. Only oil companies benefit from high gasoline prices and only oil companies have the incentive to keep gasoline in short supply. To provide domestic energy security, and to give the American consumer with some relief, the government must step in and mandate construction of new oil refineries. This may only have a small affect for consumers at the pump, but it will insulate gasoline prices from destabilizing natural disasters.