As the Department of Energy is given its directives to implement yet another "pie-in-the sky" alternative energy crusade that has been going on since the days of Nixon to find ways of replacing petroleum with ethanol, hydrogen(Does anyone remember the Hindenberg?) some new fangled battery, solar as well as wind technology to power our cars and industries, the President has started us down a road to yet another expensive boondoggle that will result in little or no results. We're bound to see this venture fail because of the simple fact that the White House is taking such research and development out of the private sector and is chunking it in the government sector where our tax payers (Us) to pay for such R&D thus meaning folks doing such research will be on the government teat. As we are all aware from things like AMTRAK and our current outlays in the forms of earmarks in the federal budget, the folks getting the taxpayer's money are not going to walk away from free money but will milk that gravy train and never accomplish anything related to what the President wants done. In fact, James Glassman of TCS Daily, makes similar points in this piece but he furthers the argument by noting that President Bush's comments that we have become "addicted" to oil is far more harmful to the US economy than the folks in the White House thinks. Take a look at what Glassman had to say about President Bush recent announcement on oil:
But maybe I should cut Bush a break. It's just rhetoric, right?Lets just say that President Bush might have opened a greater Pandora's Box with his conservative base with these four paragraphs on energy that his pollsters realize. We need this money to go towards our War on Terror effort and our military needs(A legitimate and constitutional role for the government) and let the private sector do this research free of taxpayer's money. As you can tell, I'm at odds with President Bush with this issue and from the looks of it, others are to.
In this case, no. The use of the word "addicted" is dangerous. It could end up hiking prices by reducing supply.
How? Bush has signaled a new attitude from the White House. If this president can't defend the working of our almost-free market, then who will? If I were in the oil business myself, I would be extremely worried by this speech. One of my responses would be to hold back on planned research and development and capital spending. The three largest U.S. energy companies alone are projected to make capital expenditures of $43 billion this year, up from $33 billion in 2005. But does that make sense if Washington is considering windfall profits taxes, subsidies to alternative fuels and regulatory policies whose guiding principle is that fossil fuels are evil?
Instead of concentrating on increasing fossil-fuel supplies at home, the President used all of the energy section of his speech -- four paragraphs -- talking about such exotica as "revolutionary solar and wind technologies," "producing ethanol, not just from corn, but from wood chips and stalks, or switch grass," and "pollution-free cars that run on hydrogen." Of course, since these alternatives have no commercial viability, the government will have to subsidize them. The latest Carteresque concoction, announced in the speech: the "Advanced Energy Initiative."
Don't get me wrong. Alternatives are fine. No doubt they will substitute for current energy sources some day, when they become competitive on price -- without subsidies. But, as of 2004, wind, solar and geothermal accounted for less than one percent of energy consumption. Add hydroelectric and biomass (including ethanol) and you pick up another five or six percentage points. That's all. For there here and now, the best way to battle higher prices is to promote policies to boost supply.
There was no mention by the President, for example, of the importance of building new LNG terminals, which will allow the U.S. to import natural gas. This lack of terminals would have almost certainly been the source of blackouts if the winter had not been so mild. Bush might have talked about supporting legislation -- tied up by his former HUD secretary, Sen. Mel Martinez (R-Fla) -- that would share oil-leasing revenues with states, thus discouraging them from blocking offshore drilling. He could have talked about making it easier to explore at home, in Alaska, the Rocky Mountains and vast federal lands now off limits. He could have supported less burdensome regulations on building or expanding refineries.
And the President might have been straight with his audience instead of pandering with terms like "our dependence on Middle Eastern oil." The truth is that the United States will never become energy independent. Even if we were, disruptions in the Middle East (or Venezuela or Nigeria) would still boost the price of oil -- which is a global price since energy is a global commodity.
2 comments:
Comparing government funding for basic scientific research to subsidies for Amtrak is unrealistic. Amtrak doesn't serve the interests of the entire public except by getting people who would otherwise be adding to traffic jams off the roads. Basic scientific research into energy efficiency and alternative sources of energy will benefit the entire public in the future even if the research doesn't pan out immediately. If we can subsidize research into ABM systems -- none of which have proved effective -- we can certainly subsidize research that will result in cleaner, renewable energy sources.
Being a small government conservative who favors private enterprise to solve our problems, I have to say I'm oppossed to all subsidies that our government shells out.(Entitlements like Medicare,Medicaid and Social Security for the disabled, elderly and extremely poor is a different story) As for ABM research or even the armaments for our military this falls into a national defense priorities of this nation thus far outweighing a public good like cleaner fuels. I'm much more worried about a nuclear missile strike from Iran or North Korea at this moment than getting cleaner burning fuel (subsidied) for our cars.
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