Political Issues

Energy Policy

Peter Writes,

As Americans, we must come to the full realization that our over dependence on foreign oil and other sources of energy is the single greatest threat to our economy and our national security. The rise of oil to $100 a barrel has had a negative impact on our economy. First, it leads to inflation as the cost rises of goods and services that depend on transportation to reach the shelves of their final destination. As a result, the federal reserve chairman is left with few options, one is to cut interest rate to prevent a recession and the other is to raise interest rate to prevent inflation from raring its ugly head in our economy. Increased interest rate in turn slows the economy. Thus, we are left with stack choices, none of which are a permanent remedy to the energy challenges we will face in the future.

The future Solutions

Washington must develop both long term and short-term solutions to this problem. First, we must have good relations with Opec, indeed a strategic one—The organization of petroleum exporting countries.

In the early 80's, Ronald Reagan cut a deal with the house of Saud-the White House of Saudi Arabia. In exchange for a massive build up of Saudi Arabia 's defense force. The house of Saud used its powerful influence to keep the price of oil below 30$ a barrel for eight years. Then Sheik Yamani was the powerful Oil Minister of Saudi Arabia Beyond, the tax cuts and the curbing of spending that Reagan attributes to the abundance of jobs during his era, the truth be told that oil went from $40 a barrel during the Carter era to as low as 16$ a barrel during the era of Reagan---This is the short-term or short gap measure.

On a long-term basis, we must move to alternative sources of energy such as wind, solar and in rare cases nuclear power. Sweden , a Scandinavian country has set a goal where they will cut their dependence on foreign sources of energy or oil by as much as 85% by 2015. They are on track to achieve that goal. With China and India soon to join the U.S. has one of the largest consumption of foreign oil, this is likely to lead to an increase in the price of oil in the near term future as demand grows. For every increase in the price of oil on the world market there is a corresponding adverse effect on the U.S economy.

Japan has made great strides in curbing waste as well as converting waste to alternative sources of energy. They have been successful in building several methane fermentation plants that collect and convert cow manure to methane gas which in turn is used to power vehicles. They have also acquired the technology to convert human waste to electricity. I believe we in America can do much better. Today, in Japan household and industrial recycling has become an obsession. We are not too far off in America . We can always unleash the entrepreneurial mind of the American people and set a standard of excellence that will be unmatched by other countries in the past. Nuclear power plants today will always face the constant threat of terrorism and the lack of a permanent site for waste. The idea of using Yucca mountain has a permanent site is still being resisted by the state of Nevada. New technology should be deployed that will make it possible to recycle nuclear waste. Urban dwellers in the industrialized world, of which we are a part of, generate far more waste that the developing countries combined.

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