Energy Commentary Part III

This is Part III of a three part commentary on energy letters that were recently published in the State News. Part I advocates for immediate drilling; Part II advocates for drilling as part of a comprehensive energy plan; this third and final part is a letter which advocates for more big government as part of a "credible commitment to reducing oil consumption.

This letter appeared as a letter to the editor/guest commentary in the July 10, 2008 edition of the Delaware State News (page 4):

Plan would conserve energy, create jobs
David Benevy, Effort, Pennsylvania

I own a building that used 4,000 gallons of heating oil a year. I decided to just say "no" to oil and installed electric heating. Oil has gone up to $4 a gallon, so, I would have spent $16,000 heating with oil. I've been offered oil next year at $5 a gallon, so, I would have to spend $20,000 next year if I still used oil. The electricity I used for heating cost me $2,500 for the entire heating system. That's like buying heating oil at 63 cents a gallon! Now, that's energy conservation! How can this experience be repeated all over this country? Here's my suggestion.

Create a federal Department of Energy Conservation. Start with a crash program to reduce the use of home heating oil and propane. Invest $150 billion the first year. Hire and train thousands of energy-conservation specialists to develop an energy-saving plan for each homeowner desiring to participate. Get funding from investors by offering them an 8-percent tax-free return. Charge the homeowners 3-percent interest and have the federal government make up the difference. Insist that all products purchased for these projects be at least 90-percent American-made.

The benefits of this plan are far reaching. First, it will put people to work as energy-conversation specialists. The products required to implement the projects will range from new windows and insulation to heat pumps, geothermal systems, electric hot-water heaters, etc. A large number of jobs will be created to install these products. Since they must be of 90-percent American origin, it will put this money to work across America. By paying only 3-percent interest, homeowners will be able to repay the loans with less money than they would have spent on oil. This is money that will not go out of the country and will be spent locally.

By reducing the demand for heating oil, the supply of diesel fuel (basically the same product as heating oil) will increase, reducing its cost. This, in turn, can reduce the cost of everything that is transported by diesel fuel. The 8-percent tax-free yield will encourage foreign investors, and hence, the demand for dollars, which will improve the exchange rate, which tends to lower the cost of oil.

There is a federal weatherization program which provides windows and insulation to lower-income Americans. This program will have a wider scope and be available to everyone, regardless of income, because its goal is to benefit the country rather than lower-income people.

A realistic goal for the $150 billion would be to cut the nation's use of home heating oil and propane in half. Each house is different, and there is a different strategy for each house. A house with central air and an oil-fired hot-air system can easily be converted to a heat pump using the oil or propane system for backup heat. Geothermal savings would offer even greater savings. Houses using oil furnaces for hot water could turn the furnaces off when not needed for heat and use hot water heaters instead. Poorly insulated houses could be made to use less oil by insulating and installing modern windows.

Unlike current plans floated by our presidential candidates which include spending $150 billion over the next 10 years or offering a prize of $300 million for a better battery, this plan can be implemented using existing technology and bring about an immediate and dramatic reduction in our use of oil and propane. Moreover, when everything is taken into account, the federal government will probably end up making money with the venture. The interest cost to the government would be $7.5 billion the first year. But since the program moves money back into the American economy, it creates jobs, profits and consequently, taxes. The money saved by homeowners not buying oil and propane will go back into the economy.

Most significantly, by making a credible commitment to reducing oil consumption, this program should help lower the cost of oil. This will lower everyone's fuel bills, including the government's fuel bill, and results in less money leaving the country to pay for oil, leaving more money in the country to help the economy recover.