Petronomics 101

Oliver North
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Posted: May 09, 2008 12:01 AM
Petronomics 101

FORT BENNING, Ga. -- Here at the U.S. Army's biggest base on the East Coast, soldiers and their dependents are eagerly awaiting the arrival of their "economic stimulus payments." It's a good thing because, like most of us, these American heroes are going to need the extra money just to purchase their next tank of gas.

This week, the Internal Revenue Service begins mailing rebate checks to budget-crunching taxpayers. Bush administration officials hope the checks will be used for shopping sprees to resuscitate the U.S. economy. But instead of getting that new patio grill, consumers are more likely to apply Uncle Sam's payments to their next purchase of petrol.

When the price of oil hit $100 per barrel in January, I wrote in this column, "Those who wish to lead this nation in the future need to put more than hot air into solutions such as clean, safe nuclear energy for electricity and hydrogen fuel-cell technology for propelling people and products around the planet."

Unfortunately, few politicians seem to have given a second thought to the fact that this country hasn't had an energy plan for the past 30 years, and it doesn't look as if we will have one anytime soon.

While Washington's political elites in both parties have debated and dithered, the price of crude oil has risen to $123 per barrel -- nearly double what it was at this time last year. The average cost of a gallon of gas at the pump is approaching $4 per gallon. Some analysts now are predicting that the price of a barrel of oil could approach $200 in the next two years -- and that gasoline could be $6 a gallon. An equal amount of diesel may cost truckers as much as $7.50.

Meanwhile, Middle Eastern governments are raking in the petrodollars. At least one despotic regime is using its plentiful petrol profits to kill American troops, erect nuclear facilities, fund global terrorism, and strategize about new and creative ways to make Israel's 60th birthday its last as a nation.

Iran, just named by the State Department as "the most active state sponsor of terrorism" and "a threat to regional stability and U.S. interests in the Middle East," this week hardened its position with respect to going nuclear. Supreme Leader Ayatollah Ali Khamenei, who outranks the Persian Napoleon -- Iranian President Mahmoud Ahmadinejad -- said this week that Iran would not give up its nuclear program.

Last week, delegates from the U.N. Security Council nations plus Germany met to discuss incentives that might persuade Iran to cease its program of uranium enrichment. But Khamenei would have none of it, baldly stating, "It is a national duty not to fear any sanction." And just in case anyone might misunderstand, the Tehran theocrat added, "We should not allow anybody to deprive Iran of its legitimate rights," and declared, "No world power can make Iran retreat from its path."

Now, you don't need to have a degree in economics to see what's happening. The cost of crude oil is out of sight and climbing. Petrodollars are funding a radical Islamic jihad being waged against us. Here at home, the cost of everything from fuel to food is going up, and we're sending out of the country capital needed to resuscitate an economy that is, at best, sluggish and, at worst, foundering.

The majority in Congress has responded by proposing tax increases for domestic energy production, suggesting new mandates on producers, demanding that coal-fired electric plants be shut down, and whining that foreign governments need to increase oil production -- while opposing exploitation of reserves here at home. In a news conference two weeks ago, President Bush criticized Congress for blocking efforts to expand domestic oil production in the Arctic National Wildlife Refuge. And this week, in a noteworthy understatement, White House spokesman Scott Stanzel observed, "We have here, in this nation, resources that we are not utilizing."

No, really? The newest oil refinery in the United States was built by Marathon in Garyville, La., in 1976. Since then, every effort to construct new facilities has been thwarted by protests and lawsuits from "environmental" groups and government red tape. It has been 12 years since the last nuclear reactor came on line to generate electrical power in the United States.

Time and money are wasting. Sen. Kay Bailey Hutchison of Texas has proposed a realistic solution: the Domestic Energy Production Act of 2008. Her bill would permit exploitation of more than a trillion barrels of U.S. territorial oil and nearly 600 trillion cubic feet of natural gas -- more than the combined hydrocarbon reserves of Saudi Arabia, Mexico, Nigeria, Venezuela, Libya and Iran. The measure also would streamline the process for building new refineries and clean, safe nuclear power plants, as well as funding to develop alternative fuels.

But none of that -- and the consequent reduction in energy costs -- ever will benefit American consumers, unless Congress acts. Until they do, we will have to plan on spending our tax refund checks -- and a whole lot more -- at the pump.