How will the future economy of the United States respond to rising oil prices or to $300-a-barrel oil? Under the Obama Administration and a Democratic majority, we’ve seen the federal government attempt to stimulate renewable energy by investing into it, by contributing to energy-storage technology, and by recognizing the utility of alternative-fuel vehicles.
Despite fossil fuels contributing to climate change, national security concerns, and the pollution of the human environment, the GOP embraces an economy dependent on dirty, nonrenewable fossil fuels. Fossil fuels may seem cheap, but they’re not. The cheap cost of fossil fuels, paid at the pump for example, doesn’t reflect the true cost of fossil fuels, because the price at the pump doesn’t include costs that are a consequence of the negative externalities associated with burning fossil fuels. For example, it has been estimated by numerous studies that the negative externalities associated with burning fossil fuels cost governments and the public billions of dollars each year. This means that while fossil-fuel companies receive record profits, they’re not responsible for the consequences of doing dirty business or for the billions of dollars that governments and the public are forced to pick up. Additionally, the fossil-fuel industry receives government subsidies to pollute the human environment. These fossil-fuel subsidies must be eliminated to “enhance energy security, reduce emissions of greenhouse gases and air pollution, and bring economic benefits.”
Given the facts and consequences associated with a fossil fuel-based economy, it would seem that a prudent and progressive energy policy shouldn’t be a partisan issue, but the Republican Party isn’t exactly known for pushing clean, sustainable, or rational energy policy reforms. For example, the Republican Party’s energy policy focuses on “lifting restrictions on ANWR, the Outer Continental Shelf, and oil shale in the Mountain West.” Also, the Republican Party claims that “revenue generated by the sale of leases will be invested in renewable and alternative sources of energy.” However, what will the United States utilize after these nonrenewable resources are exhausted? Why drill here, drill now when these minerals are sold on an international market, so why is it necessary to invade protected wilderness areas to extract minerals, which aren’t necessarily consumed domestically. Also, considering greenhouse gases, global warming, and climate change, why is it necessary to add even more trapped carbon dioxide — a greenhouse gas — into the atmosphere? Basically, the short-term benefits of extracting and using these minerals are outweighed by the long-term damage caused by climate change and a failure to implement a prudent or sustainable energy policy.
Furthermore, the Republican Party believes that “the best way for utility companies to reduce carbon emissions is to increase their supply of nuclear energy.” However, nuclear power isn’t cheap, and the costs associated with constructing new nuclear power plants have skyrocketed. There are also substantial costs associated with decommissioning nuclear power plants (“it may cost $300 million or more to shut down and decommission a plant“). Other negatives associated with nuclear power production include the fact that the nuclear power industry depends solely on a nonrenewable energy source, and there’s the well-known problem of storing nuclear waste. Also, “the process of thermoelectric generation from fossil fuels such as coal, oil, and natural gas, as well as nuclear power, is water intensive. In fact, each kWh generated requires on average approximately 25 gallons of water to produce.” Therefore, drought could force nuclear power plants to shut down. What’s more, there are past and present safety concerns with nuclear power production. Recently, the nuclear power industry has been plagued by safety problems at the Vermont Yankee Nuclear Power Plant. Certainly, if the costs associated with decommissioning nuclear power plants, with the management of nuclear power plants, and with the disposal of nuclear waste are considered, then both solar and wind power are substantially cheaper than nuclear power.
The GOP’s talking points on energy also claim that Democrats tax energy, but the GOP makes no mention of the tax incentives and tax credits spurred under the Democratic majority and under the Obama Administration. Consequently, the Republican Party merely politicizes and trivializes the issue of energy. Why can’t the Republican Party aggressively pursue the development of renewables? Portugal is doing it. Denmark is doing it. Iceland is doing it. Even China understands the utility of developing its renewable energy sources.
Additionally, being a conservative political party, there are energy conservation strategies that the Republican Party should show open and strong support for but don’t. For example, there are the ideas of retrofitting buildings to conserve energy, adopting greener building standards to conserve energy, or even promoting the smart grid revolution to conserve energy. Also, instead of attacking it, the Republican Party should show strong support for science in order to spur innovation and technological development to meet our energy needs.
Given the Party’s energy policy positions, the new Republican majority in the House of Representatives threatens to stifle the progress made by the Democratic majority by resurrecting an energy policy focused too much on fossil fuels. For example, Representative Joe Barton, a Republican from Texas and BP apologist, is supposedly a contender for the chairmanship of the Energy and Commerce Committee. Another contender for the chairmanship of the Energy and Commerce Committee is John Shimkus, a Republican from Illinois. Shimkus is a climate-change denier, and once declared that “global warming isn’t something to worry about because God said he wouldn’t destroy the Earth after Noah’s flood.”
To summarize, the Republican energy policy lacks innovation and forward-thinking, and their energy policy merely utilizes old ideas, which don’t promote energy security. To put it another way, the Republican Party’s answer to our current energy crisis is to stick their heads in the sand. Also, the failure of the Republican Party to embrace prudent energy policies is the failure to recognize the connection between population growth, rising energy demand, natural resource unavailability, and rising energy and mineral prices. More on the future price of oil via Peak Oil News and Message Boards:
Ludwig: What is your oil price outlook as this whole new world order begins to take shape?
Maxwell: The supply and demand of oil in the world today are pretty close to each other, and there shouldn’t be too much deviation in 2010 and 2011. We think prices will stay within a band roughly between $67-$87 a barrel. When it gets up toward $87, it seems to retreat, and when it gets down toward $67, it seems to take off again. That’s because supply and demand are in rough balance.
But as the economic recovery continues, as more people use oil because there are more people in the world, and China and India continue to progress with rapid expansion of cars and the roads they are offering their people, demand for oil will continue to climb between 1 and 1.5 percent per year. That, combined with the depletion of these mature oil fields we’ve talked about, will bring us to a plateau by 2015-2017, where the rising production of newer oil fields will equal the falling production of old fields.
At that stage, prices will break through this $87 boundary—in about 2013, I’m thinking. And by 2015 we’ll be up to around $130-$150 a barrel. And then by 2020, when we have 1.5 percent increases in demand each year and 0.5 percent declines on the downside, then we’ll really be in a fix. At that time, I’m looking at $300 a barrel in money of the day. But remember, by then we will have the full effects of inflation over the prior 10 years, so it would probably be something like $200 a barrel in today’s terms, but it will have a nominal price of about $300 a barrel.