Different problems exist than ours

By Richard Steinberger
Special to the Bonanza
May 9, 2008

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I understand reader Michael Abel’s frustration at the current gasoline prices, and overall energy situation in the United States. However, he is attempting to blame people, organizations and forces that have nothing to do with the problems we all face as U.S. citizens.

The basic problem is that for more than three decades the United States has done virtually nothing to prepare for the situation we find ourselves in today: A large and growing demand for petroleum and only a limited (and difficult to increase) supply. It’s not as if this situation just crept up on us: We’ve know since the 1950’s that it was only a matter of time before all the “easy oil” was consumed, and only the “difficult oil” remained. Difficult oil is oil that is geologically remote (deep, offshore, far from existing pipelines) and/or located in very un-democratic, politically unstable nations.
President Carter established a very forward-thinking program in the 1970’s to develop methods to conserve energy and research renewable energy supplies. It was the Reagan administration, not some rogue band of environmentalists, that eliminated this effort, even going so far as to remove solar collectors from the White House roof.

As to the California coast: There is indeed a sea off that coast, but it’s made of beautiful ocean water, not oil. Given the limited oil reserves that are actually there, and the risks of serious spills, like the one in Santa Barbara, there is not a single major politician in California who would support large scale oil drilling off the coast. The risks are far too high for California citizens to support such an effort.

As to the Arctic National Wildlife Refuge, there is a significant amount of oil in this highly sensitive area. Even if it could be exploited fully, it would provide only about 1-2 years of U.S. consumption, and that only at current consumption rates. And don’t imagine that because this is “U.S. oil,” that the major oil companies will sell it domestically for $60/barrel when they could get $120 or more per barrel from China, Japan or India. In other words, ANWR represents a huge potential profit for the major oil companies, but at the very best, a short-term and partial solution for US citizens.
The idea that the world price of oil is above $120/barrel because of the influence of followers of Islam is patently ridiculous, though politically, it is popular to identify scapegoats in non-Western garb. The reason oil costs more than $120/barrel is a function of supply and demand, not religion. There was a time when senior policy makers, not to mention ordinary Americans, understood this basic economic principle.

As to nuclear power, Mr. Abel imagines that some rag-tag group of T-shirt wearing eco-activists have stopped the construction of nuclear power plants. If only it were that simple (as if such activists had any control at all over Reagan’s energy policies or those of Bush Senior or Junior). The reality is much more mundane: Wall Street doesn’t like the risk/return picture for nuclear power. In other words, nuclear power hasn’t prospered in the United States because utilities can’t raise money for it (in spite of $18.5 billion in subsidies from the US government). For example, Warren Buffett’s Mid-American Nuclear Energy Company canceled plans to build a power plant in Payette, Idaho. Why? It just didn’t make economic sense.
Finally, the idea of lowering gas taxes by 50 cents may seem politically savvy, and it may make angry voters feel better. But the net effect would be to increase gas consumption and further postpone the time when U.S. citizens and their elected representatives actually have to develop long-term, sustainable energy policies, including higher mileage vehicles.

The best short-term approaches remain increased conservation, better building and motor vehicle MPG standards, and large-scale investment into solar, wind and other renewable energy technologies. It’s tempting to look for simple solutions and blame scapegoats. But if we’re ever going to develop sustainable, reliable, robust sources of energy that do not pose a threat of energy wars with other nations, or a danger to the earth’s climate, we need to learn the facts and prepare for some years of hard work and difficult decisions.

Richard Steinberger is an Incline Village resident.