Energy
I may be a relatively simple man stating the obvious in that it appears increasingly necessary for the US to develop energy independence. This has been a buzz phrase that we’ve all heard countless times recently with high gas prices affecting everything including the cost of food. It also seems to me to be possibly the most important security concern for the US right now. The reason we are bogged down in Iraq, have had to endure decades of rocky relations with the Middle East and have thus attracted the ire of would-be terrorists is our need for foreign oil. Again, i’m no expert but i’m under the impression that we’re also importing a decent amount from places like Russia and Venezuela, two countries that aren’t real hot on us these days.
So it appears to me that the biggest cause of foreign relations headaches for our government is the constant need for access to oil and dealing with opec countries. If we could drop this one burden, we’d have the ability and strength to deal much more effectively with stuff we’d like to do as opposed to needing to do (maybe focus on piracy, genocide, hunger, whatever). It appears that everyone is on the same page politically that America needs energy independence but i’m not aware of much action on that front. In presidential debate 2, Brokaw asked a question about whether the answer was a Manhattan Project style approach or lots of little independent operations that might come up with the solution.
My uncle and I talked a lot about it the next day and agreed we’d like to see a Manhattan Project effort level with this. Its something that would really benefit the country and could do a lot to get Americans back to work on a major initative. Most importnatly, we think its something that Americans are ready for. We are in the middle of an unfortunately ugly political atmosphere right now and lots of people (especially blue collar folks in southern illinois) are worried about bleak economic prospects, and it would be great for the whole country to pitch in on (even if only on an emotional level) something that would benefit all Americans.
October 20, 2008 at 12:52 pm
So, this morning the December oil options market is signalling that oil is expected to be less than $50 in two months. My personal prediction is $37/bbl by this time in 2009. The problem with alternative energy is that this always happens: Oil runs up, everyone suffers, alternative projects begin to make economic sense, and then oil crashes and makes all of the alternative projects uneconomic. It happened in 1973-1976, 1979-1983, and it’s happening now. Some European countries made big progress towards energy independence over the last thirty years by using taxes to put a floor under the cost of oil so that it wouldn’t wipe out all of the alternative projects when the price came down. The idea would be to keep the price high all the time to discourage use of oil and to protect and encourage the alternatives. The tax money in turn could be used to finance and subsidize research or directly subsidize alternative production. Is this politically feasible in the U.S.? I worry that it isn’t. As to the Manhattan Project, the only real breakthrough would be fusion power and we’ve had several such projects like the National Ignition Facility going on for decades. It’s a tough nut to crack and we can’t be sure that it will ever work. Much more likely to work is policy that protects the many smaller, private efforts like wind farms from being creamed when oil prices crash. But, are you willing to accept a floor of $4.00/gallon for gas forever while we’re waiting for the alternatives to fill in the gaps? Because that’s what is most likely to work the fastest.