Ray Rothrock

Domestic Energy Standards – American Energy for Americans

In Energy on February 17, 2011 at 10:34 pm

By various means the United States is shipping its wealth overseas.  One of those ways is the importation of foreign oil.  For several years now we shipped about $400 billion dollars overseas, to some countries that don’t much like what America stands for.  Let me say that again, $400 billion.  That’s $111 per person per month sent overseas.   Can you imagine what you could do with $111 per month?  We really don’t need to do this, nor should we.   Let me explain.

For years now the country has debated things like Renewable Portfolio Standards, Cap and Trade on Carbon, or Carbon Emission Standards, and the like.  Some of these concepts are law in many states.  All these remove choices from the consumer.  All of these are mandates.  Okay.  Standards of this sort are often backed up by arguments of climate change.  The fragmentation of the climate discussion means that we probably really don’t know.  And we really don’t.  Personally, I don’t want to take the chance so I would stop creating CO2 as fast as possible.  If we can, we should!  But I’m not a majority.

Rather, I’d like to start with energy independence.  This is not debatable.  It is easy to understand by everyone.  It is not controversial.  Every president since President Carter has pushed for it, yet none has ever achieved it.  President Obama can.  As Americans we should demand it of our government.

Everyone can agree, I believe, that we need to stop sending our wealth overseas.  This means stopping the oil imports and coming up with our own sources of gasoline since oil is mostly used for gasoline.  Instead of RPS or CES standards, we should simply have a Domestic Energy Standard – DES.  I think this is easier to understand.  It is not scientifically debatable.  And the American People can understand it – every time they fill up their gasoline tanks of their cars.  The choice is theirs!

What do I mean by DES?  DES would not dictate what source of energy you use as a state, city or person for your electricity or gasoline.  It wouldn’t dictate incentives for expensive energy systems.  It doesn’t give you tax breaks to deploy things that have yet to make economic sense. It doesn’t pick winner or losers in the energy supply of the United States.  It simply encourages you to purchase domestically created energy – electricity and gasoline.  That means that if you choose to purchase foreign sources of energy, you will pay more.  That’s right – your choice.  Pay more or pay less.  We all know that American’s are fragile and respond quite quickly to price signals on energy.  Look what happened in the summer of 2008 when oil hit $148 per bbl and gasoline was hitting $5 per gallon.

The United States should tariff all sources of foreign energy, which mostly means OPEC oil.  It would by its very nature increase the cost of energy from nondomestic sources, and favor domestic sources of energy.  The entire supply chain would have to respond.  It would let the free market continue to win as it always has in commodities like energy.  This means, of course, that the United States would have to bring online more domestic sources of gasoline.

One of the near term sources for gasoline is the conversion of other coal or natural gas.  The US has massive coal and massive gas resources.  Both can be converted to gasoline with known technologies.  It takes a lot energy to combine short chain hydrocarbons to longer chain hydrocarbons but it can be with electricity.  The Germans figured it out in World War II.  To get the energy to do this conversion, the United States should immediately begin to build nuclear fission plants.  I can imagine that Big Oil who have the balance sheets to afford nuclear power might get involved since they know best how to deliver gasoline to our pumps.  Can you imagine if ExxonMobile built a massive coal to gasoline refinery at a coalmine in West Virginia powered by a nuclear power plant?  Can you imagine the jobs that would create for a 100 years?  Can you imagine the impact that would have on world oil markets?   Mr. Tillerson, care to discuss this idea?

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