The Bare Knuckled Pundit
Grand Inquisitor
As the price of gas continues to rise, the corresponding partisan rancor and posturing has likewise followed off into low Earth orbit. Enduring increasing pain at the pumps, Americans naturally look about for answers and ultimately someone to hold responsible.
How did we come to this sorry state? What can be done? Whose fault is it? All are completely reasonable and natural questions. Many point to the cartoonishly vilified Big Oil. Others blame obstructionist environmentalists. Some accuse cowboy capitalist market speculators. Engaging in what increasingly appears to be the new national pastime, several believe in a conspiracy among oil producers and nefarious groups seeking to cripple and push us off the world stage.
Yet, while flaring tempers and pointed fingers may vent our spleens, they do nothing to address the situation at hand.
Let me be the first to say I have engaged in my fair share of this very same vitriol. Lest I be charged as a self-righteous and proselytizing hypocrite, I readily acknowledge and take full responsibility for wantonly adding fuel to the philosophical and political flames. I have ridden the tumultuous rapids of high emotion and surrendered myself to the partisan passions of the moment. That being said, the time for reason and rationality is now at hand.
Setting past sins of omission and commission aside, the time has come to look to the future. What follows is a broad and rough outline for a comprehensive energy plan for America. The devil and boredom lie in the details, so this is offered in the broadest of terms as a starting point for discussion and debate.
First though, let me clearly state that while I am an admitted and committed Petrovore, I am no friend of wanton and wasteful gluttony. Accordingly, I wholeheartedly support the responsible development of our natural resources and the expansion of renewables where possible. However, I likewise firmly believe first and foremost in the economic security of our nation. Therefore when push comes to shove, the caribou will kindly have to step aside so we may develop our resources in ANWAR, albeit in the most responsible and minimally intrusive way possible.
Furthermore, bear in mind this is a long term plan. Many of the proposals may not produce tangible results for years. Yet, to further delay its inception is to extend the period of vulnerability for our economy and our very way of life. Having done so repeatedly in the past, we can ill afford to do so yet again. Now, onto the fun, shall we?
-Open ANWAR and the Outer Continental Shelf for exploration and drilling: Estimates place the potentially recoverable reserves in the billions of barrels of oil and trillions of cubic feet of natural gas. The impact of this development will be in the mid to long range. However, further delay will likewise push back the introduction to and impact of these reserves on energy markets. Responsible planning for the future entails concrete action today and this is a tangible step towards securing our future energy needs.
-Heightened lease development and administration: A report issued by the House Natural Resources Committee recently asserted that energy firms currently hold undeveloped and inactive leases on millions of acres of federally owned land. Due to the variables involved with exploration and production and the fact that not all lands are going to be commercially exploitable, the true extent of this situation is open to debate.
Nonetheless, in order to encourage timely development of these resources, oversight, tracking and review of federal leases should be substantially increased. Companies applying for future federal leases would be required to provide a plan with a corresponding timeline for developing land awarded to them. In line with current policies, increasing penalties would be imposed on them up to the forfeiture and loss of their lease should they fail to meet their submitted timelines without showing good cause for their delay. Companies experiencing chronic and repeated delays and forfeitures would be barred from applying for future leases.
The new regulations and requirements would likewise be applied to pre-existing and current leases.
As part of the new lease regime, companies would be required to provide additional royalty-in-kind payments of oil to the Strategic Petroleum Reserve in order to increase the amount of oil available to the nation in times of crisis.
-Establishment of the Federal Petroleum Management Board: In order to remove political considerations and influence from the management and utilization of the Strategic Petroleum Reserve, the FPMB would be created. The Board would be empowered to add or release stocks from the SPR as it deemed necessary and would include members of the energy industry as well as financial and commodity markets experts. It would additionally be responsible for working with commodity markets and energy industry entities and personnel in order to coordinate and stabilize national energy policy. Modeled after the Federal Reserve, the FPMB would be an independent entity with its members appointed by the President and approved by Congress.
-Expansion of national refining capacity: All the oil in the world is useless unless it's refined. Accordingly, in addition to increasing supply, you must correspondingly increase refining capacity. With the last new refinery built in the United States when Jimmy Carter was President, it is long past due.
The permitting process for new refineries should be dramatically restructured with regulations being loosened. As a matter of national security, federal regulations should take precedence over state and local requirements. In exchange for loosened regulations for new permits and expansion of pre-existing refineries, the industry would pay into a federal pool that would be used to address and offset any adverse impact that might occur, much like the EPA’s Superfund.
In order to encourage expansion of pre-existing and new refineries, tax incentives would be provided that specifically supports each option. Tax incentives and favorable lease provisions would be offered for the refurbishment and utilization of formerly active industrial facilities as well as former military sites.
-Electrical generation capacity expansion: Nuclear power plant permitting would be updated, simplified and expedited. Clean coal and carbon sequestration technology would be encouraged through tax incentives and government-private sector partnerships.
The national power grid and the corresponding delivery network must be upgraded and expanded. Redundancy and flexibility must be greatly enhanced, as demonstrated by the New York blackout of August, 2003. Permitting for power line routes would be expedited accordingly. Minimizing the impact of line routes on animal habitat and the environment would play a significant, but not ultimately determinant role.
-Expansion of renewable electrical generation capacity: While not being able to provide consistent base load generation, renewable sources such as wind turbines and solar cells should be dramatically expanded. Tax incentives that allow families and businesses to deduct the full installation costs of such systems the first year, as well as the total cost of the systems themselves over three to five years would encourage the expansion of home and business-based supplemental electrical generation. This would allow power generators to lower their fuel usage and production costs.
Furthermore, tax incentives and expedited permitting should be provided for the expansion of commercial renewable electrical generation. If renewables are going to be a significant part of our future energy equation, serious incentives must be provided and efforts made to support them during their fledgling period.
Intrigued? Enlightened? Engrossed? Enraged? If so, tune in again tomorrow, same Bare Knuckled channel, same Bare Knuckled time for Part Two of the American Energy Initiative for the 21st Century.
Remember, faithful readers, you may find yourself behind the wheel of a large automobile. And you may ask yourself – well…..how do I fill this? Stay tuned for those answers and more tomorrow!
How did we come to this sorry state? What can be done? Whose fault is it? All are completely reasonable and natural questions. Many point to the cartoonishly vilified Big Oil. Others blame obstructionist environmentalists. Some accuse cowboy capitalist market speculators. Engaging in what increasingly appears to be the new national pastime, several believe in a conspiracy among oil producers and nefarious groups seeking to cripple and push us off the world stage.
Yet, while flaring tempers and pointed fingers may vent our spleens, they do nothing to address the situation at hand.
Let me be the first to say I have engaged in my fair share of this very same vitriol. Lest I be charged as a self-righteous and proselytizing hypocrite, I readily acknowledge and take full responsibility for wantonly adding fuel to the philosophical and political flames. I have ridden the tumultuous rapids of high emotion and surrendered myself to the partisan passions of the moment. That being said, the time for reason and rationality is now at hand.
Setting past sins of omission and commission aside, the time has come to look to the future. What follows is a broad and rough outline for a comprehensive energy plan for America. The devil and boredom lie in the details, so this is offered in the broadest of terms as a starting point for discussion and debate.
First though, let me clearly state that while I am an admitted and committed Petrovore, I am no friend of wanton and wasteful gluttony. Accordingly, I wholeheartedly support the responsible development of our natural resources and the expansion of renewables where possible. However, I likewise firmly believe first and foremost in the economic security of our nation. Therefore when push comes to shove, the caribou will kindly have to step aside so we may develop our resources in ANWAR, albeit in the most responsible and minimally intrusive way possible.
Furthermore, bear in mind this is a long term plan. Many of the proposals may not produce tangible results for years. Yet, to further delay its inception is to extend the period of vulnerability for our economy and our very way of life. Having done so repeatedly in the past, we can ill afford to do so yet again. Now, onto the fun, shall we?
-Open ANWAR and the Outer Continental Shelf for exploration and drilling: Estimates place the potentially recoverable reserves in the billions of barrels of oil and trillions of cubic feet of natural gas. The impact of this development will be in the mid to long range. However, further delay will likewise push back the introduction to and impact of these reserves on energy markets. Responsible planning for the future entails concrete action today and this is a tangible step towards securing our future energy needs.
-Heightened lease development and administration: A report issued by the House Natural Resources Committee recently asserted that energy firms currently hold undeveloped and inactive leases on millions of acres of federally owned land. Due to the variables involved with exploration and production and the fact that not all lands are going to be commercially exploitable, the true extent of this situation is open to debate.
Nonetheless, in order to encourage timely development of these resources, oversight, tracking and review of federal leases should be substantially increased. Companies applying for future federal leases would be required to provide a plan with a corresponding timeline for developing land awarded to them. In line with current policies, increasing penalties would be imposed on them up to the forfeiture and loss of their lease should they fail to meet their submitted timelines without showing good cause for their delay. Companies experiencing chronic and repeated delays and forfeitures would be barred from applying for future leases.
The new regulations and requirements would likewise be applied to pre-existing and current leases.
As part of the new lease regime, companies would be required to provide additional royalty-in-kind payments of oil to the Strategic Petroleum Reserve in order to increase the amount of oil available to the nation in times of crisis.
-Establishment of the Federal Petroleum Management Board: In order to remove political considerations and influence from the management and utilization of the Strategic Petroleum Reserve, the FPMB would be created. The Board would be empowered to add or release stocks from the SPR as it deemed necessary and would include members of the energy industry as well as financial and commodity markets experts. It would additionally be responsible for working with commodity markets and energy industry entities and personnel in order to coordinate and stabilize national energy policy. Modeled after the Federal Reserve, the FPMB would be an independent entity with its members appointed by the President and approved by Congress.
-Expansion of national refining capacity: All the oil in the world is useless unless it's refined. Accordingly, in addition to increasing supply, you must correspondingly increase refining capacity. With the last new refinery built in the United States when Jimmy Carter was President, it is long past due.
The permitting process for new refineries should be dramatically restructured with regulations being loosened. As a matter of national security, federal regulations should take precedence over state and local requirements. In exchange for loosened regulations for new permits and expansion of pre-existing refineries, the industry would pay into a federal pool that would be used to address and offset any adverse impact that might occur, much like the EPA’s Superfund.
In order to encourage expansion of pre-existing and new refineries, tax incentives would be provided that specifically supports each option. Tax incentives and favorable lease provisions would be offered for the refurbishment and utilization of formerly active industrial facilities as well as former military sites.
-Electrical generation capacity expansion: Nuclear power plant permitting would be updated, simplified and expedited. Clean coal and carbon sequestration technology would be encouraged through tax incentives and government-private sector partnerships.
The national power grid and the corresponding delivery network must be upgraded and expanded. Redundancy and flexibility must be greatly enhanced, as demonstrated by the New York blackout of August, 2003. Permitting for power line routes would be expedited accordingly. Minimizing the impact of line routes on animal habitat and the environment would play a significant, but not ultimately determinant role.
-Expansion of renewable electrical generation capacity: While not being able to provide consistent base load generation, renewable sources such as wind turbines and solar cells should be dramatically expanded. Tax incentives that allow families and businesses to deduct the full installation costs of such systems the first year, as well as the total cost of the systems themselves over three to five years would encourage the expansion of home and business-based supplemental electrical generation. This would allow power generators to lower their fuel usage and production costs.
Furthermore, tax incentives and expedited permitting should be provided for the expansion of commercial renewable electrical generation. If renewables are going to be a significant part of our future energy equation, serious incentives must be provided and efforts made to support them during their fledgling period.
Intrigued? Enlightened? Engrossed? Enraged? If so, tune in again tomorrow, same Bare Knuckled channel, same Bare Knuckled time for Part Two of the American Energy Initiative for the 21st Century.
Remember, faithful readers, you may find yourself behind the wheel of a large automobile. And you may ask yourself – well…..how do I fill this? Stay tuned for those answers and more tomorrow!
