For Sound Energy Policy, Don't Look to Congress
By Warren Brown
Sunday, May 7, 2006; Page G02
Congress thinks we're stupid. Maybe we are. We, most of us, refuse to accept that we are living in a world of rapidly increasing demand for declining fossil fuel resources.
We believe more oil is to be found around the corner, in the next country, beneath the ocean, under or in the next rock. Maybe it is.
But people who have spent much of their professional lives looking at this issue say it really does not matter that more oil is waiting to be found somewhere. They believe there will never be enough of the stuff to fuel, feed, clothe, house and move a constantly growing global population.
Those people include Vice President Cheney, White House energy adviser Matthew Simmons and, believe it or not, President Bush.
For some time now, Cheney and Simmons, an energy investment banker, have been telling Bush that oil as we know it is about to go away. Their advice largely is why the president in his State of the Union address in January warned that America has become "addicted to oil." That is why the president, a scion of the Texas oil patch, uncharacteristically chided his fellow Republicans in Congress for offering yet another tax break for the nation's oil companies, this one facilitating quick write-offs of the costs of resource exploration.
"Record oil prices and large cash flows also mean that Congress has got to understand that these energy companies don't need unnecessary tax breaks like the write-offs of certain geological and geophysical expenditures," the president told the White House media corps.
That does not mean Bush is no longer a bosom buddy of Big Oil. It does mean, at least on this issue, that he is significantly smarter than Congress.
People enjoy poking fun at Bush, portraying him as something of an errant fraternity boy. But this president is nobody's dummy. He fully understands the concept of "peak oil," the high point of the bell curve at which 50 percent of the provable reserves in any oil field have been recovered.
Oil is plentiful on the upside of the curve. It is less available, substantially more difficult and enormously more expensive to retrieve on the downside.
Experts contend that peak oil production in North America actually was reached as far back as 1970, forcing the United States, for one, to rely more heavily on foreign sources of crude, a decidedly dangerous and extremely costly way of fueling our economy.
One of those experts is Robert L. Hirsch, senior energy program adviser at San Diego-based Science Applications International Corp. (SAIC), which conducts a variety of scientific studies for governments and global corporations.
Hirsch and his colleagues last March completed a study for the Department of Energy. Maybe it was too difficult for Congress to read. Certainly the title was forbidding: "Peaking of World Oil Production: Impacts, Mitigation and Risk Management."
Had Congress read Hirsch's report, Sen. Debbie Stabenow (D-Mich.) might not have proffered the silly idea of giving Americans a $500 tax rebate to help cover the cost of rising gasoline prices, and Senate Majority Leader Bill Frist (R-Tenn.) might not have come up with the equally goofy idea of giving Americans a $100 gas rebate.
Both proposals, now thankfully dead, constituted the most wrongheaded kind of political pandering, the kind that supports the notion that American consumers have a God-given right to cheap gasoline in a world where hundreds of millions of people already are paying considerably more for that fuel.
Congress was trying to play Robin Hood without portfolio, sticking a windfall profit tax on companies such as Exxon Mobil Corp., which raked in $8.4 billion in profits in the first quarter of 2006, and passing a part of the proceeds on to grumbling citizens.
I have no doubt that Exxon Mobil and the rest of oildom are engaging in a bit of profiteering, taking advantage of a very real energy crisis. But the Stabenow and Frist proposals, along with the advocates of increased federally mandated corporate fuel economy without any increases whatsoever in gasoline taxes, completely miss the point.
Hirsch and his colleagues put it clearly in their report to the Department of Energy:
We eventually will not have enough oil to fuel our enormously wasteful American way of life.
Global oil production is peaking.
"Optimistic oil production forecasts deserve to be viewed with considerable skepticism," the Hirsch report said. "World oil peaking represents a problem like none other. The political, economic and social stakes are enormous," the report said.
In plain English, that means America's cheap-oil ride is over. Ill-thought consumer tax rebates will not help. Ill-thought tax breaks for oil companies that are bumping up prices now in anticipation of oil's future decline will not help.
We need more political wisdom and the guts to do the right thing.
That starts with political leaders telling the American people the truth, as Bush did in his "addicted to oil" comments. It means mandated increased vehicle fuel economy accompanied by increased taxes on gasoline, engine displacement and vehicle size. It means getting over our social and racial biases, which still keep certain people out of certain neighborhoods, and coming up with a truly efficient, democratic mass transportation system.
"Waiting until world conventional oil production peaks before initiating crash program mitigation leaves the world with a significant liquid fuel deficit for two decades or longer," the Hirsch report said.
Wake up, Congress. Wake up, America. We are a part of that world.
For Sound Energy Policy, Don't Look to Congress
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Originally Posted by Ahiga
