Wednesday, April 30, 2008

Energy Ostriches

Whether it is projection or speculation, there have been discussions in the news that oil could reach $200 a barrel and gasoline could reach $10 a gallon in the not-too-distant future under some scenarios. It's presently around $120 and $3.60 or so (above $4 in some regions - $3.79 would be $1 per liter). Of course gasoline prices have been higher than this in Europe and other regions for quite a while, but the current prices and projections like these have many Americans up in arms (and make me glad I bought a Prius, which is back to giving me ~50 miles/gallon now that my snow tires are off).

There is also discussion of a summer moratorium on the $0.184/gallon Federal excise tax. McCain and Clinton have endorsed this, though it's a ridiculous band-aid or PR stunt that encourages gas consumption and probably won't even lower consumer prices. This is what passes for "energy policy" in this country.

As Thomas Friedman points out in this op-ed piece, the US really doesn't have an energy policy. It is astonishing that Congress has failed to extend tax credits for alternative energy research and production (mainly solar and wind). The oil and gas industry continue to get their credits, but it is the still-embryonic solar and wind industries that really need this help to attract investment and help them to grow to the point where they can operate without subsidies. Fortunately other countries such as Germany and Spain are subsidizing alternative energy R&D and starting to build industries in these fields.

It's pretty clear that the Bush administration is as brain-dead on energy as it is on most issues, but it's worrisome that none of the three presidential candidates seems to be paying much attention to this beyond McCain and Clinton supporting the crazy summer gas tax holiday.

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