Senator Domenici Introduces The American Energy Production Act (S. 2958)

It would have been nice if this legislation had been introduced and passed two years ago when the Republicans still controlled the House and Senate. But if nothing else, this bill will definitely show how the Democrats have beholdened themselves to special interest groups, even when such groups push agendas that are not in line with the well-being of the American people.

The Press Release for the American Energy Prodcution Act (S. 2958) can be accessed here:

Summary Of The American Energy Production Act S. 2958
U.S. Senate Committee on Energy & Natural Resources
May 1, 2008

Here is the executive summary:

The American Energy Production Act, introduced today by Senator Domenici and Senate Republicans, will address America’s soaring gas prices by focusing on common sense measures that will increase production of oil and gas in America. If enacted, the American Energy Production Act will produce up to 24 billion barrels of oil—enough oil to keep America running for 5 years with no foreign imports. And that doesn’t include billions more barrels of potential fuel from oil shale and coal to liquids in the bill. By expanding production offshore and in Alaska, and removing obstacles to domestic production in the West, this bill will help us reduce our dependence on foreign oil.

That sounds really good to me and if you are concerned about rising gas prices and the fact that we send $40 billion annually to nations that have anti-American agendas, then it should sound good to you too.

As such, I have written my Senators to express my support for this bill. I encourage all who are reading this blog to do likewise. Just copy and paste the following, then print it out and mail it to your Senators:

Dear [Senator's name], I am writing this letter to ask you to support and/or co-sponsor the American Energy Production Act (S. 2958) introduced by Senator Domenici (R-NM) on May 1st, 2008. This bill would provide the American people with a potential 24 billion barrels of oil which we can sell to ourselves much more cheaply rather than paying an annual $40 billion to buy oil from overseas. The benefits of this bill are many-fold. Not only will it help ease the price at the pump by increasing supply, it will also help reduce the amount of money we send overseas to buy oil, much of that money going to fill the coffers of governments that actively pursue an anti-American agenda (e.g. Saudi Arabia, Venezuela, etc.). Additionally, the money saved by supplying ourselves with our own oil can go into research for truly viable alternative energy supplies. The price of gasoline has gone up for many reasons, most of which can be attributed to the policies enacted into law by this very Congress. For example, the mandate of using ethanol, despite its supporters’ promise of bringing down gas prices, actually drove the price of gasoline up as it also drove up the price of food. The end result: people now have to pay more at the pump in order to get to the store to pay more for food. This has also had a worldwide impact as food prices have gone up globally resulting in food riots in Mexico and Egypt and people starving as close to home as Haiti. Further, there was also a promise of lower carbon emissions, but since it requires the burning of 1.5 gallons of petro-chemicals to produce a single gallon of ethanol, that promise was nothing more than fantasy as well. The main reason for the high price of oil is simple supply and demand. Nations that have been aggressively developing the industrial sectors of their economies (India and China) have been using more and more oil which means demand has gone up. As any first year economics student knows, when demand goes up, so do prices. But, when demand goes up and supply does not keep pace, or even goes down, prices rise even faster. Evidence of this can be seen every time OPEC announces there will be reduced production. Prices are pushed up. Domestically producing oil would help ease the supply issues that we now face and would help ease the burden on the American consumer. That is one of the best actions Congress can take to help bring us out of recession. Please support S. 2958 so that we can get our economy back on track and stop funding those who would do us harm. Thank you.

This is the reality we live in now. We need to bring our Congressional representatives out into this same reality.

Ethanol: The Side Effects

Take a look at this:

They don't have enough to eat. Five people are dead in Port Au Prince, Haiti after a week of food riots. Unions in Burkina Faso have called a general strike to protest the high cost of grain. Food riots have rocked Egypt, Cameroon, Indonesia, Ethiopia and other nations. In Manila, police with M-16s have supervised the sale and distribution of subsidized grain. Hoarders have been threatened with life imprisonment. In Thailand and Pakistan, troops are guarding fields and warehouses. In Egypt, the army has been called out to bake bread. Even in the United States, a run on rice has caused big-box retailers Sam's Club and Costco to limit the amount of rice consumers can purchase per visit (though the cap is extremely generous -- each customer can buy four 20 pound bags of rice per day at Costco).

That sounds like the plot to one of the futuristic apocalypse/disaster movies from the 1970s/1980s. But it's not. It's real life and it's happening today. Why? Well, the answer to that will surprise most liberals and green activists.

In his epic work, Wealth Of Nations, Adam Smith noted that whenever a transaction between two people occurred, it was because both believed they were gaining something in the exchange. Further, Smith noted that when both parties did gain something, there were unintended side-benefits that went beyond the single transaction.

Well, the idea of side-benefits also applies to unintended consequences. What you read in the above excerpt is just that: unintended consequences of a transaction that has been forced upon us by our own government. I am, of course, referring to ethanol.

It is simple economics. When supply goes down, price goes up. It does not matter the reason that supply went down, just that it went down. When our government mandated the use of ethanol in our gasoline, it cut into the supply of corn that we use for food and food production. As a result of this, the price of food has gone up, not just here at home, but worldwide.

More, from Mona Charen over at TownHall.com:

It seemed like such a painless solution. It fits on a bumper sticker. In fact, I saw one yesterday: "Don't burn fuel. Grow it." The EU adopted a goal of producing 10 percent of its fuel for road transportation from biofuels by 2020. The U.S. government (cheered on by the agriculture industry and environmentalists) adopted a mandate of 36 billion gallons of biofuel production by 2022 -- a five-fold increase over 2006 levels amounting to 28 percent of the U.S. grain harvest. Congress and the president joined hands to pass this feel-good legislation just when, as the Wall Street Journal pointed out, new data were demonstrating that biofuels cost more energy than they save. "When the hidden costs of conversion are included, greenhouse-gas emissions from corn ethanol over the next 30 years will be twice as high as from regular gasoline. In the long term, it will take 167 years before the reduction in carbon emissions from using ethanol 'pays back' the carbon released by land-use change."

Of course, that will be a small relief to those who will starve over the next 167 years just so we can feel good about a law that will never reach it's stated goals.

We aren't even sure that Global Warming (or any kind of climate change) is even human induced. But we can be absolutely sure that whatever we try to do about it will have serious costs.

Mona's parting shot:

"When millions of people are going hungry," Palaniappan Chidambaram, India's finance minister told the Journal, "it's a crime against humanity that food should be diverted to biofuels." This is not to suggest that all efforts to conserve energy or maintain the environment are folly. Rather, it's a cautionary tale. How much environmental improvement do we really get and -- this is paramount -- at what price?

Yes. At what price? I have no doubt that the environmentalists and others who cheered on this bill went to sleep that night feeling very good about themselves.

But, as was noted in the book (and movie) The Neverending Story, when travellers reached the second gate to get to the Southern oracle, they looked into a mirror and saw their true selves. Brave men found they were truly cowards and kind people found they were truly cruel. Those who cheered on this ill-thought out ethanol law fall in the latter category.

You can access the complete column on-line here:

Let Them Eat Ethanol?
Mona Charen
TownHall.com
April 25, 2008