Friday, May 16, 2008

The New Hostage Crisis

We are being held hostage on the energy front by our governmental policies at our behest. How have we done this? We have supported, or at least we have not opposed, a policy of protect the environment at any cost. Over the last 30 years, we "protected" the environment by stopping every attempt to build nuclear reactors and oil refineries, prevented oil exploration and many new drill sites, and refused to support viable energy alternatives and solutions.
IcQ* Question: What happens when domestic supplies are kept flat while domestic and worldwide demand increases?
I say "protected" like this because other countries have built nuclear reactors (e.g. - France), have built oil refineries, and are erecting new drill sites (e.g. - China) at a record pace. Unless one thinks the American flag flapping in the wind over these facilities hurts the environment more than a French, Chinese, Russian, or Venezuelan flag, the environment is not more protected.

Conservation is Balance
Energy policy cannot be obtuse. Industrialism has no concern for the environment and was a policy for many years in this country. It is responsible for such things as strip mining. Conservation sprung up to address and counter this lack of concern. However, environmentalism has no concern for progress of mankind. Industrialism and environmentalism are policy extremes in our relationship with our environment. Neither policy is good.

Escalating energy prices due to increasing demand against shallow increases in energy supplies is and will continue to be the cost of the current policy. The price escalation so out paces our ability to accommodate it, something has to give. When increased prices are due to supply shortages and not due to increased costs, "windfall" profits result. In a free market, these profits have a built-in coolant. These increased profits attract competitors and investors to this high return trade to get a piece of it, increasing supplies and competition, and driving prices down. However, we do not have a open energy market in this country. We have made it so costly in time and money to enter the market, we deter anyone from entering.

Compounding the problem, pacts between oil producing countries have formed a worldwide monopoly. The weakening dollar also increases the problem exponentially.

What Now?
Living in the Western US, I love the beauty of our countryside. We need to demand those making the policies and laws in our government to strike a balance between responsibly meeting our energy needs and responsibly protecting our environment.

Our ability to force change in the market is rendered inert by the current laws. Our ability to affect change in the laws is made nearly impotent by the hold of special interest groups upon policy makers and those who would speak the truth. Therefore, until the pain of the cost pushing a majority of Americans to want change more than the desire to be complacent, we will continue to be held hostage by market and political forces to increasingly higher energy costs with no discernible benefit to the environment.

What's Next? The resurrection of the misery index?

* Intellect Capital Quotient

Labels: , ,