Thoughts on Energy by Set America Free

Back to the future
Now, when the first signs of economic recovery may be in sight, it’s time to ponder what kind of recovery we are likely to witness. Will it be the traditional V-shaped recovery in which economic growth bounces back from a slump, or will it be a W-shaped, double-dipped one in which one crisis follows the other for several years to come? “Much of this depends on the price of oil,” writes Gal Luft. If one is to listen to the OPEC cartel (we’ve chosen to ignore the Saudi Oil Minister, who doesn’t want OPEC described as a cartel; Newspeak rears its head again) oil prices will climb to $75 a barrel and within 2-3 years they could again reach $150 a barrel. Feels like deja vu?

But Congress apparently has other worries. What seems to be the signature energy legislation of the 111th Congress, the American Clean Energy and Security Act, (also known as the Waxman-Markey cap and trade bill) which recently emerged from the Energy & Commerce Committee of the House of Representatives, does virtually nothing to shield the economy from the devastation the coming oil crisis would no doubt cause. The bill’s renewable electricity mandate which requires utilities to get 20 percent of their electricity from renewable sources by 2020 would discourage the use of coal and natural gas, but since only 2% of U.S. electricity is made from petroleum it will do nothing to address our oil dependence problem. The bill’s “cash for clunkers” program which gives consumers credit for purchasing an-oh-so-slightly more fuel-efficient car – for example $3,500 for replacing a SUV or pickup truck with a model just one mile per gallon more efficient – may help drive stockpiles of unsold Detroit cars off the lots but in terms of oil dependence it is equally meaningless. Even the provisions to encourage deployment of electric vehicles and plug-in hybrids, while important and useful, will not affect our near-term energy security, at least until battery costs are significantly reduced.

Sadly, the one provision that could have made a difference, an Open Fuel Standard to ensure most new cars are flexible-fueled – capable of running on a variety of alcohol fuels in addition to gasoline – was watered down to meaninglessness by the Committee. Such a standard, which would add less than $100 to the cost of a new car, could have enabled drivers to choose a fuel alternative at the pump if and when gasoline prices rise to $5 a gallon.

Watch what Set America Free member Congressman Eliot Engel had to say about the bill.

A comment on GM’s bankruptcy
To see what was once a pillar of America’s industrial prowess crumbling is not a happy sight, and our hearts are with the millions of hardworking Americans that will no doubt be affected by this bankruptcy. But let’s not mince words here. Only six years ago GM promised that by 2010 it would sell 1 million hydrogen fuel cell cars. Only seven months are left before 2010 and GM hasn’t sold one. Yet, up until its last day of trading on the Dow Index the company continued to pour good money after bad and remained committed to a hopeless hydrogen vision devoid of scientific and economic merit. Time after time GM leadership came to Capitol Hill to ask for taxpayer bailout funds to keep their failing business afloat. In doing so, GM promised that it would make 50% of its cars flex-fuel vehicles by 2012. But when the moment of truth came and the House of Representatives considered including in its energy bill an Open Fuel Standard which would ensure they did just that, it was auto industry lobbyists that scuttled the move. GM is living off of our billions – $50 billion dollars of hard earned taxpayer money and counting – but refused to give Americans the minimal assurance that it would use the funds to usher us into an era of global transportation that is no longer exclusively tied to oil.