Energy Commentary Part II

This is part II of a three part commentary on energy letters recently published in the Delaware State News. Part I was a letter about the benefits of immediate drilling. This second letter, a response to that letter, also discusses the benefits of drilling, but as part of multi-faceted approach. The headline is misleading though.

This commentary appeared in the July 8, 2008 edition of the Delaware State News as a letter to the editor/guest commentary. Again I have attempted to add links where I was able to find support for the points.

Drilling will not solve oil crisis
Andrew Alea, Dover, Delaware

This is a two-fold response to Franklin Wright's June 30, 2008 commentary, "Drilling Answer to Gas-Price Woes." I first offer a counterpoint to Mr. Wright's letter, and then a starting point for a more productive discussion on approaching our nation’s energy concerns.

We both agree that the price of and our dependence on oil will continue to be a central issue for both candidates this fall and to this country for at least the next decade. In none of Wright's hyperbole and rhetoric, however, does he offer any substantive approach for the candidates (and more realistically the voting public) to think about given that the price of gas is not coming down anytime soon. Unlike Wright, I will not attempt to summarize my understanding of either Obama's or McCain’s positions beyond what they agree on, leaving the readers to their own resources to check Wright's allegations for accuracy and form a sound, independent opinion.

Wright begins by arguing that both parties have "distinct solutions" to the energy problem. I believe he has misspoken. Everybody agrees on the solution: we need to increase our oil reserves and alter national perceptions and trends regarding energy policy and use. Obama and McCain agree that one way to reach it would be through offshore domestic drilling. They also agree that this is only one means to increase supply, it should not be undertaken at the expense of the Alaska National Wildlife Reserve, and is, at best, a long-term, insubstantial fix. What distinguishes the candidates is not in their "solution," then; it is with their "approaches," which aren't that distinct.

Wright and I also agree that drilling even as early as next year will not affect oil prices significantly for at least a decade (or at least the 2016 election). Thus, we both conclude that the only logical reason for making a concerted public push to drill domestically serves no purpose, save a political one.

After reaching this conclusion, Wright and I have divergent reactions. He focuses on a senator's comments (implying that he supported nationalization of the oil refineries) as gospel that the Democratic party has become a Trojan horse for a socialist agenda. Not only does this position overlook the fact those comments were clarified the next day, it dodges the likely purpose behind them, which is probably as political as the push for domestic drilling. Regardless, Wright uses them to bolster his personal theory that the Democratic party (and by implication, their candidate) is attempting to tie the invisible hand of the free market to benefit OPEC and domestic oil barons. I have not found any source that supports that theory (for either candidate or party), which ultimately led to my confusion as to the point of his commentary beyond the simple idea of more drilling to lower gas prices. As should be clear, more drilling serves little to accomplish that goal in the short term. His reaction to the idea of increased drilling as the only viable approach prompted me to write this response.

I offer a short and long term approach which may start to reach the issue. The only short term (and immediate) method for lowering gas prices would be for the federal (and perhaps state) government to implement a gas tax credit. The credit, available to anyone who files a tax return, could give, for example, a maximum $400 credit to qualifying tax payers. The credit could be adjusted for mileage, whether they own or lease a car, or maybe for the type of car they drive in order to influence nationwide purchasing trends. According to a 2004 report by the California Energy Commission, the average American guzzled 464 gallons gas (Delaware was 541.6). At $4/gallon, this adds up to around $2150/year. Those taking the maximum credit would magically have their yearly gasoline expense drop to $3.26/gallon. Of course, tax credits are only a quick solution, and would have to be made up somewhere, and certainly the General Assembly or the Congress can work out the details for either of these approaches better than I can. The longer term solution would be to revamp the tax code and modernize it to reflect our current society and economic trends. I haven't heard either candidate float that albatross out yet, but perhaps it is coming.

My long term approach to the oil problem would be for Congress or the President by executive mandate to direct each state’s government to examine, pass, and begin to implement (within a certain time frame), an individual state energy policy. Thus, if a state wants to start drilling for oil, either within their borders of offshore, build a field of solar panels in the desert, build a nuclear reactor, wind farm, hydrogen plant, or whatever, the federal government will have to work with these states and decide how their plans fit within the national scheme. The federal government could also mandate through fiscal bullying a reason for the car companies to use existing plants in cities like Newark and Detroit to start producing some sort of fuel efficient concept car on a mass scale.

States (like Delaware with the wind farm) would be able to use their independent policies to help other states develop and implement similar strategies, which in turn would provide a steady stream of revenue and work for those initial states and their citizens. Letting each state develop the technology best for its citizenry would not be easy, and the role of the federal government, Republican or Democrat, would have to be to work with the states to implement their plans quickly and in harmony with the refined national goals and policy.

The candidate who makes the most common sense with his energy plan and gets the most votes is going to be the winner. The question each of us is going to be asking, sooner or later, is who should that person be. Just don’t be fooled by Wright into thinking that increased drilling will solve the problem anytime soon.