Another year, another rash of resolutions. But this reporter long ago gave up futile vows to lose weight and become a better person. Now I just hope to understand some of life's greatest puzzles.
For example, I wish I could understand how a government guarantee of a $535 million loan to a financially troubled solar-panel manufacturer was "an investment in the future," while taking from oil and gas companies the same tax provisions enjoyed by other businesses is a gutsy move to curb "subsidies." Government financing was supposed to create 4,000 "green" jobs. Instead, the firm went bankrupt, laid off employees, and let taxpayers pick up the bill. President Barack Obama has said renewable energy is the fuel of tomorrow while oil, gas, and coal are so yesterday. What should concern him, however, is which fuels will keep the economy running today while green energy strives to live up to his dream.
Obama tells voters the US has only 2-3% of the world's oil reserves but consumes 25% of global production. That's similar to the complaint by environmentalists and population-control advocates that, with only 5% of the world population, the US consumes 20% of all energy. What critics don't mention, however, is that the US is the world's largest single-nation economy and accounts for 25% of the gross national product worldwide. Although most jobs are in service industry, the US still produces 21% of global manufacturing output in terms of constant dollars. It also is a big country with an extensive transportation infrastructure and the most vehicles per capita. Given our unusually high standard of living, it's no wonder the US consumes so much energy. Through most of our history, energy consumption has grown with our GNP.
Business studies report 139 of the world's 500 largest companies are based in the US, twice the number of any other country. Most of the rest have operations here. US companies make twice the foreign investments as those in any other country. Moreover, when foreign companies invest abroad they're twice as likely to put their money in the US as anywhere else.
Offshore mysteries
Government policy on offshore drilling also defies understanding. The Department of the Interior banned offshore drilling, canceled lease sales, and has slowed permitting, claiming the April 2010 Macondo blowout resulted from a corporate rush to production. But in an earlier unprecedented move, Interior officials canceled three previously awarded leases in deepwater Julia field, claiming ExxonMobil Corp. was too slow in developing those properties.
Another nagging question is why Interior brags the 10 offshore lease sales it plans in 2012-17 will reduce dependence on foreign oil when it has done its best to curtail marine drilling. If Obama's serious about reducing US oil imports by one third by 2025, that goal more likely would be realized if the planned lease sales included the practically virgin areas off Florida and the Atlantic seaboard and the once-active waters off California. The goal could be reached even sooner by opening to exploration federally controlled lands in the Lower 48 and Alaska. Oh, not in a presidential election year, of course, but perhaps by 2017.
Political and public vilification of imported oil is puzzling when most of that supply comes from our neighbors, Canada and Mexico. It would seem in the best interest of the US for the countries that share our borders to have strong economies. Which would US citizens prefer to enter this country—Mexican crude or illegal migrants looking for jobs?
Critics blame oil imports for the lopsided US trade deficit but never mention the added-value petroleum products we export. Olivier Jakob at Petromatrix in Zug, Switzerland, reported US exports of distillates hit a record high above 1 million b/d in October while gasoline exports were stable at 500,000 b/d. He said the crude required to produce the exported distillates represents 45% of total US crude imports or 89% of the crude imported from members of the Organization of Petroleum Exporting Countries.
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