Oil is the lifeblood of the American Economy. From the cars we drive to the plastics that went into the keyboard I’m banging on right now, we have relied on, rely on, and will continue to rely on oil and oil-based products as a key component of our economic strength. Oil’s role in the economy has become increasingly clear as the Unites States wrestles with mixed economic signals—and unless we get a handle on the supply of that oil, and other economic tinkering will be an exercise in futility.
This is especially true for America’s small businesses. Ninety percent of America’s businesses have fewer than twenty employees, and American small businesses provide nearly seventy percent of all new jobs. These businesses are especially hard-hit by rising oil costs—they have the worst of all possible worlds. They cannot negotiate like big businesses for lower fuel and supply costs, and they cannot change their behavior like individuals to deal with the shock of high prices.
According to the National Federation of Independent Business, small businesses want three things when it comes to energy: low prices, reliability of supply, and stability of prices.
But recent actions by Senator Charles Grassley (R-IA) have impacted all three of these fronts, creating, in effect, a double-whammy.
First off is Sen. Grassley’s continued support of corn-based ethanol programs. Renewable, growable fuels might be the wave of the future, but in the here and now they are creating more problems than they are solving—especially when it comes to fuels derived from food sources. Corn-based ethanol is difficult and costly to manufacture, requiring vast amounts of crop-land to produce enough corn to meet artificially-inflated demand, while at the same time it is needlessly driving up food prices both in the United States and abroad.
While efficient algae-based biofuel programs might be cost-efficient, they are years away from the marketplace, and Sen. Grassley’s fetish for corn-fuels will delay that delivery even more.
At the same time, Sen. Grassley has voted to punish American oil companies for maximizing shareholder profits – as though it were the oil companies’ fault that Congress has punted its responsibility for crafting a sound energy policy. The oil companies aren’t driving up the speculative market for oil, the lack of drilling and refining in the Unites States is. And the continued push for renewable only exacerbates that speculation, as ever time someone mutters the possibility that the age of drilling is over, it sends the futures markets into a frenzy.
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