More Of Same Won’t Keep $4 Gas At Bay By BRUCE VINCENT
The Bear on Nov 28 2009 at 8:45 am | Filed under: Energy Policy
Insanity: doing the same thing over and over again and expecting different results. Albert Einstein told us this. And while he probably wasn’t referring to the last 50 years of U.S. energy policy, it certainly applies to today’s situation.
Volatile energy markets, high prices, instability abroad — if it feels like we’ve been down this road before, it’s because we have. Unfortunately, reaching back over a period of more than a half-century, Washington has been a serial offender in missing key opportunities to deliver an energy policy worthy of the world’s greatest nation.
The year was 1859. In the small, rural community in northwest Pennsylvania, America’s first wildcatter Edwin Drake struck oil, forever changing our way of life. And for the better. Lighting, automobile and air travel would follow.
Over the years, oil was refined in such a way that it could deliver more effective and powerful results. And leading up to the mid-1960s, due mostly to steady access and new technology, America’s economy flourished thanks to an abundance of low-cost, readily available, American-made energy.
Major turning points in world oil supplies — some driven in part by the Organization of the Petroleum Exporting Countries, others originating at home — would have a profound impact on the price American consumers would pay at the pump. Like the responses we’ve most recently seen from Washington, the actions taken in the 1970s only served to exacerbate the problem.
In many ways, the 1973 oil crisis was a teachable moment for American policymakers. Unfortunately, some of the lessons learned were not good. In response to spiraling prices, President Nixon instituted a price control regime that only further stunted American exploration. Thankfully, Congress came through with a narrow approval of the Trans-Alaskan oil pipeline, helping deliver more than 2 million barrels of U.S. oil a day from Alaska to the lower 48.
President Ford came next and, to his credit, took modest steps toward increasing American energy supplies. He also recognized the problem at hand, saying that “America’s future depends heavily on oil, gas, coal, electricity, and other resources called energy.” Make no mistake, said President Ford — “We do have a real energy problem.” Once again, though, U.S. policy would fail to reflect that circumstance.
The U.S. would again face another monumental energy crisis in 1978. President Carter’s response? Windfall profits taxes and a single-minded focus on forcing Americans to cut demand — at the exclusion of all else.
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