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Crisis Point : Where we are. Where we need to be.
National Review Online ^ | June 11, 2008 | Senator Kay Bailey Hutchison

Posted on 6/11/2008, 9:28:27 PM by Delacon

President Reagan liked to say, “There are no easy answers, but there are simple ones.” This principle applies to America’s energy woes. Since the Democrats took control of Congress in January 2007, the price of a gallon of gas has soared from $2.33 per gallon to over $4. Furthermore, over the next two decades, global demand for oil is expected to rise by 50 percent, meaning that further price escalation is almost inevitable. When confronted by these facts, the energy solution — as President Reagan would say — is simple. We need more energy! We should be increasing our production of oil, natural gas, clean coal, and nuclear power — and those resources should come from America, instead of foreign dictatorships. Unfortunately, enacting this agenda won’t be easy. The Democratic Leadership in Congress is determined to “punish” energy companies with new taxes, even if the greatest victim of those taxes is the American consumer.

The Democratic presidential candidate — Senator Barack Obama — is eager to burden oil producers with a “windfall profits tax” — a euphemistic phrase that implies an undue or undeserved “profit.” As Alan Greenspan once said, “Whatever you tax, you get less of.” By raising taxes, and thereby, reducing the incentives to produce energy, the consequences of this policy are obvious: we will end up with a smaller supply of domestic energy. But don’t just take my word for it; take a look at history. In 1980, Congress passed a “windfall profits tax” and the consequences were devastating. In the six years following that levy, domestic oil production dropped by 1.26 billion barrels and imports of foreign oil rose 13 percent. The “windfall profits tax” was an unmitigated disaster, which is precisely why it was repealed. We shouldn’t make that same mistake again.

Instead of searching for scapegoats, we should be striving to create a bold, comprehensive plan for America’s energy security in the 21st century. Specifically, this will require overturning literally decades of Big-Government regulations that have prevented energy companies from tapping America’s bountiful natural resources. So many people in Washington have grown accustomed to the idea that we must either import oil from the Middle East or make an expensive transition toward homegrown fuels like corn-based ethanol. This is a false choice. One of the best kept secrets in politics today is that our country is one of the richest energy nations in the world, and is extremely capable of achieving energy independence — but only if we have the willpower to do it.

When investigating America’s assortment of energy problems, a common theme starts to emerge: the more you look around, the more you’ll find government taxes, regulations, and subsidies that distort the market, raise prices, and increase our dependence on dictators thousands of miles away.

In May, I joined my Senate Republican colleagues to introduce legislation that would go a long way toward solving our energy problems. How? By increasing the supply through development of our own natural resources. Our bill, The American Energy Production Act of 2008, will remove unnecessary government barriers to domestic energy production.

The most obvious example of unnecessary federal interference is the ban on oil production in the Arctic National Wildlife Refuge. Despite its lofty name, ANWR is not all a pristine Eden. Rather, the area that would be drilled is a frozen tundra where temperatures can reach 70 degrees below zero in the winter. As even the Washington Post admitted, ANWR “is one of the bleakest, most remote places on this continent, and there is hardly any other where drilling would have less impact on the surrounding life.” In 1995, the Republican Congress passed legislation to open ANWR — which is estimated to contain 10.4 billion barrels of oil — for energy production. But President Clinton vetoed our bill. If he had signed it, today America would be producing almost enough oil to replace all of our daily imports from Saudi Arabia. By consistently blocking ANWR production, we are failing to help America become less dependent on foreign imports for basic economic needs.

But the problem goes beyond ANWR. Current federal law prevents oil and gas production in the deepwaters off the Atlantic and Pacific Coasts. These laws, which were first passed in 1981 when the price of oil was $35 per barrel, were a luxury at the time, but today, given America’s growing energy needs, they are indefensible. The fact is, these areas, along with another energy-rich section of the Gulf of Mexico, could contain as much as 115 billion barrels of oil — which is greater than Venezuela’s current reserves — and 565 trillion cubic feet of natural gas — which is greater than the combined reserves of Iraq, China, Yemen, Oman, Nigeria, and Venezuela. Federal laws also prevent us from exploiting one trillion barrels of shale oil in Colorado, Wyoming, and Utah — an amazing amount that is three times what Saudi Arabia has on reserve. Our bill, the American Energy Production Act of 2008, would allow us to tap these resources with environmental safeguards.

As conservatives, we must unite to repeal one of the most misguided policies of the last decade — government mandates to increase the production of corn-based ethanol. These policies — which give incentives to farmers to divert their plantings from other crops to corn in order to produce ethanol — have been robbing the world of one of its most important sources of food.


Since February 2006, the shift in farming habits has caused the price of corn, wheat and soybeans to increase by more than 200 percent. Rising food prices are hitting the pockets of lower-income Americans and people who live on fixed incomes. Food riots are breaking out in some parts of the globe, and relief organizations are facing gaping shortfalls as the cost of food outpaces their ability to provide aid for 800 million people.

I have introduced legislation that would freeze the corn-based biofuel mandate at current levels, instead of steadily increasing it through 2015, which is the present policy. This is a commonsense measure that will reduce pressure on global food prices and restore balance to America’s energy policy.

The rush to embrace corn-based biofuels stemmed from a belief that America must increase its use of alternative fuels to reduce our dependence on foreign oil. But if that’s the mission — and it’s a worthy one -we must embrace more economically-viable energy sources such as solar power, wind power, and especially nuclear power — which, in addition to being a reliable and affordable energy source, emits almost no carbon gasses. The best way to broaden our energy portfolio is through American ingenuity, not Washington bureaucracy.

On all of these energy-related issues — preventing tax hikes, reducing government regulations, repealing mandates, and accelerating innovation — the American people are solidly behind us. The Democrats, however, have an ace up their sleeves — or so it seems. They feel empowered to challenge plans to increase supply, preferring to demagogue the profits of oil companies instead.

In 2007, the oil industry’s profit margins were 7.6 percent of revenues, which is not much higher than the 5.8 percent profit margin for all U.S. manufacturing. In fact, if you exclude the financially troubled auto industry, the oil industry actually appears less profitable than most manufacturers, which are earning 9.2 cents on every dollar of sales. America’s energy problem isn’t oil company profits; it’s a changing global energy market — in which demand is surging while supply is remaining largely stagnant. As President Reagan might say, the simple solution is to increase the domestic energy supply to lower prices — precisely the opposite of what the Democrats are advocating.

Conservatives are well poised to lead a pro-growth energy program that could create millions of jobs and secure our economy. But wherever possible, we should look for allies across the political spectrum. We can find allies among national security Democrats who understand that energy independence is a vital component of winning the war on terror. We could also find friends in the environmental community, where concerns over corn-based ethanol and the carbon emissions necessary to produce it have grown considerably. Respect for nuclear power has also accelerated.

This year, we will spend about $500 billion to import oil. All of those dollars should stay here in America, instead of being sent to corrupt regimes that are hostile to our interests. We need energy for Americans by Americans, and we need it now. At a time when conservatives are playing defense on so many issues, energy is one issue where we can go on offense and win. Victory would be good for our party, and better yet, it would be good for our country.

Kay Bailey Hutchison is the senior senator from Texas and the Chairman of the Senate Republican Policy Committee.


TOPICS: Business/Economy; Culture/Society; Editorial; Government; Politics/Elections
KEYWORDS: 110th; aepact; anwr; capandtrade; carbon; climatechange; energy; energyindependence; energyprices; ethanol; globalwarming; kaybailey; oil; texas
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1 posted on 6/11/2008, 9:28:28 PM by Delacon
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To: Genesis defender; proud_yank; FrPR; enough_idiocy; rdl6989; TenthAmendmentChampion; Horusra; ...

This would be a congressional and presidential election policy winner for republicans IMHO.


2 posted on 6/11/2008, 9:31:14 PM by Delacon ("The urge to save humanity is almost always a false front for the urge to rule." H. L. Mencken)
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To: Delacon

Good for Kay!


3 posted on 6/11/2008, 9:31:44 PM by griswold3 (Al qaeda is guilty of hirabah (war against society) Penalty is death.)
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To: Delacon

They could at least have built some coal to liquid plants with that $5 billion a year the DoE has had for the past 30 years.


4 posted on 6/11/2008, 9:32:00 PM by RightWhale (I will veto each and every beer)
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To: Delacon

We need to make it possible to drill for oil in this country again. And we need to license nuclear power plants.


5 posted on 6/11/2008, 9:33:42 PM by popdonnelly (Does Obama know ANYONE who likes America, capitalism, or white people?)
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To: Delacon

A good summary of the problem and its makers. We now need solvers. And fast. Yet we remain hamstrung by the left and RINOs and that refuse to develop and execute a REAL energy policy that provides for more energy in all forms and removes our radical dependence on enemy-based and other foreign supplies.

The malfeasance of Washington on the matter of energy, has hurt the American economy, increased our security risks, and done nothing for the future to assure America’s energy independence.


6 posted on 6/11/2008, 9:34:07 PM by EagleUSA
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To: Delacon
Where we are.

Probably about page #453 in Ayn Rand "Atlas Shrugged"

Where we need to be.

Cracking open "The Road to Serfdom" by Friedrich Hayek

7 posted on 6/11/2008, 9:35:36 PM by Popman (Obama is like a Ken doll, smooth between the legs)
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To: Popman

Kudos on the literary post. :)


8 posted on 6/11/2008, 9:37:26 PM by Delacon ("The urge to save humanity is almost always a false front for the urge to rule." H. L. Mencken)
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To: Delacon
Nah, we need to increase taxes to cut demand - ALL of my Congress critters tell me so.

They don't appreciate hearing that they are not following world wide opinion and following in the lead of their progressive masters in Cuba and China to drill off the coast of Fla.

9 posted on 6/11/2008, 9:38:45 PM by Paladin2 (Huma for co-president!)
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To: EagleUSA
My Energy Manifesto:

* Cease all ethanol production. It takes away from food production and the unintended consequence is higher food costs. As diesel prices go up, the cost of farming tips the balance of cost to make ethanol a bad idea. Just say "no" to ethanol! Even Jimmy Carter says that diverting farm production from food to fuel is dumb – even HE gets it. This will create only ONE "blend" of gasoline and will cease regional "boutique" blends (gasohols) which are stupid, costly, and meaningless. Trucking custom blends around the country is wasteful. Ethanol blends get fewer miles to the gallon, and adds to the cost of production and transportation. Newer cars do not need oxygenated fuels.

* Lift the restrictions in order to drill for oil in Alaska, Gulf of Mexico, and other sites in the CONUS as a matter of national security.

* Encourage the petro industry to construct state-of-the-art refineries and/or retrofit current and dormant ones and crank up production for our newly-accessed oil in the CONUS.

* Make all “carbon credit” scams unlawful. Discrediting Algore should have been a slam-dunk a long time ago. Stop electing Reps who buy into the Global Warming / Global Cooling / Climate Change Hoax. CO2 is not our enemy!

* Construct SEVERAL, regional Pebble-Bed Modular Reactors (or other similar modern designs) that are not considered "breeders", are rechargeable, and cleaner than any current nuclear generator design. Breeders are OK, but PBMR's are better. Refine spent nuke fuel for recycling. DO SOMETHING NUCLEAR to resolve energy problems.

* Use the residual heat from the reactors above to process motor fuel from coal and/or shale. Even though Clinton "stole" some of the best coal reserves, we still have a lot to use.

* Become independent enough to make the cartels (i.e. OPEC) inconsequential.

* Convince local taxing bodies to lift or cap the sales tax on gasoline so that as gas prices go up, the local tax collectors don’t see a windfall revenue jump at the expense of the consumer. The Federal government could compel the states (and locals) to cap the fuel taxes.

If you squint real hard, and read between the lines, the ‘manifesto’ will require the dismissal of all RINOs and LibDems and the election of some clear-minded conservatives to even consider any of the above.

10 posted on 6/11/2008, 9:39:10 PM by SERKIT ("Blazing Saddles" explains it all.....)
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To: popdonnelly
We need to make it possible to drill for oil in this country again. And we need to license nuclear power plants.

I totally agree, however I don't know how we do this with a democratic congress. I think it will take a march on washington and I dont know if that would even help. I have never felt so utterly out of control with regards to our future.

11 posted on 6/11/2008, 9:40:55 PM by estrogen (.)
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To: SERKIT

Serkit, didnt Senator Hutchison basically steal your manifesto and make it the American Energy Policy Act? I’d have words with the senator if I were you. :)


12 posted on 6/11/2008, 9:42:55 PM by Delacon ("The urge to save humanity is almost always a false front for the urge to rule." H. L. Mencken)
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To: Delacon; OKSooner; honolulugal; Killing Time; Beowulf; Mr. Peabody; RW_Whacko; gruffwolf; ...

FReepmail me to get on or off


Click on POGW graphic for full GW rundown

New!!: Dr. John Ray's
GREENIE WATCH

The Great Global Warming Swindle Video - back on the net!! (click here)

Ping me if you find one I've missed.



13 posted on 6/11/2008, 9:43:51 PM by xcamel (Being on the wrong track means the unintended consequences express train doesnt kill you going by)
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To: Delacon

I lost all respect for Kay when she basically admitted that she had, in her own opinion, violated her oath to uphold the constitution by participating in unconstitutional acts.

However, she speaks a lot of truth here.

The one glaring item she fails to mention is the need to roll back the Commodity Futures Modernization Act of 2000. Gramm was an idiot for pushing it and Clinton was an idiot for signing it.


14 posted on 6/11/2008, 9:43:57 PM by eraser2005
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To: Delacon

The enviro extremists have really hurt us in the energy area.

They are against new oil drilling such as we could at ANWR.
They are against new hydro electric dam projects.
They are against nuclear power.
They are against windmills if they block the view of powerful people.

They are against building new refineries.
They are against using more coal, even with the new “clean coal” technology.

While it’s good to think about the future and shifting away from fossil fuels eventually, it’s not going to happen next week, or next year, or the next 20 years. We’re going to have to develop more of our own energy resources.


15 posted on 6/11/2008, 9:44:34 PM by Dilbert San Diego
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To: All

“Since the Democrats took control of Congress in January 2007, the price of a gallon of gas has soared from $2.33 per gallon to over $4.”

About time someone pointed this out...about time the republicans grow some cajones and start some finger pointing of their own..........


16 posted on 6/11/2008, 9:45:03 PM by Alright_on_the_LeftCoast
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To: SERKIT

I wouldn’t cease ALL ethanol production, just that from foodstocks (and then simply cease mandates/subsidies). You can make ethanol from plenty of other stocks that don’t impact the food supply. That would require rollback of requirements for ethanol production for use as motor fuel, but so be it.

Heck, if one of these many algal oil companies gets things running profitably, they can produce ethanol from the waste stream of biodiesel production, all without displacing food crops.


17 posted on 6/11/2008, 9:47:59 PM by eraser2005
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To: Delacon
This would be a congressional and presidential election policy winner for republicans IMHO.

Damn straight it would.

If someone in the RNC recognized this, they wouldn't have the brains to figure out how to leverage it.

And McCain appears to propose the exact opposite when he blames "big oil" for earning too much. Which they don't on a PER CENTAGE basis compared to the S&P 500. The jerk should take a few quick economics and accounting classes.

18 posted on 6/11/2008, 9:48:15 PM by Cobra64 (www.BulletBras.net)
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To: Delacon
Serkit, didn't Senator Hutchison basically steal your manifesto and make it the American Energy Policy Act? I’d have words with the senator if I were you. :)

Thanks for the recognition! I've been posting the 'manifesto' here for about six weeks in various forms. MANY FReepers helped me hone it and tweak it, so it is a group effort. If she saw it here and stole it, I'm PROUD. BTW I sent the McCain campaign the 'manifesto' in the form of a question, "You want to hear straight talk on energy?". I offered to help explain it further - we'll see. My two nitwit Senators (Barry and Turban) wouldn't care to represent me, so I'm not wasting my time. Sometimes I feel as useless as a Republican-Conservative in Illinois......wait......I AM in Illinois......crap!

19 posted on 6/11/2008, 9:48:48 PM by SERKIT ("Blazing Saddles" explains it all.....)
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To: estrogen

Its my opinion that if the RNC made this the defining issue of the campaign season, we’d hold on to enough republicans in the house and senate(plus add a few conservatives to the rolls), and maybe retain the presidency(might even get McCain to sit down and shut up about cap and trade). This THE issue. Its our last best chance.


20 posted on 6/11/2008, 9:48:58 PM by Delacon ("The urge to save humanity is almost always a false front for the urge to rule." H. L. Mencken)
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