A clear lack of thought
Robert Bryce, author of “Power Hungry” describes the lack of clear economic thought going into the current energy policy in this February 22 National Review editorial. Bryce’s focus is on oil and gas, as opposed to coal, but the sentiment still fits just as well. There seems to be little more going on in an energy policy sense than a desire to attack fossil fuels and prop up renewables, regardless of the cost or larger social, economic, and environmental impacts. Bryce comments,
To be clear, all energy sources should be forced to compete, fair field, no favor. Let’s eliminate all energy subsidies. But contrary to the president’s narrative, if that were to occur, it’s the wind and solar industries, not the oil-and-gas sector, that would immediately go into cardiac arrest.
The nut of Obama’s energy policy can be found in a single paragraph of his budget:
As we continue to pursue clean energy technologies that will support future economic growth, we should not devote scarce resources to subsidizing the use of fossil fuels produced by some of the largest, most profitable companies in the world. That is why the Budget eliminates inefficient fossil fuel subsidies that impede investment in clean energy sources and undermine efforts to address the threat of climate change.
To begin, consider the “largest, most profitable” line, which betrays the Obama administration’s antipathy toward the hydrocarbon sector. Apple, the company nearly everyone loves — iPads, iPhones, the secular saint Steve Jobs — has a market capitalization of $475 billion and a profit margin of 25.8 percent. Meanwhile, BP, the biggest producer of domestic oil and the company nearly everyone loves to hate — oil spills, British people, Tony Hayward — has a market capitalization of $147 billion and a profit margin of just 6.8 percent. Apple is three times as large and nearly four times as profitable as BP.
Apple has virtually no manufacturing jobs in the U.S. Instead, it imports nearly everything from China. Meanwhile, last year, the domestic oil industry exported — yes, exported — about 1 billion barrels of crude oil and refined products worth some $100 billion. Those exports are creating jobs and helping America’s balance of trade.
The reality is that there is a near complete lack of science and/or economics going into the attacks on fossil fuels. Domestic fossil fuel production provides hundreds of thousands of jobs, billions in salaries and government revenues, infrastructure development, as well as the low-cost fuels and electricity that power this nation.
It’s good to see some people out there recognizing the benefits of our domestic fossil fuel resources. We need their voices now, more than ever.