US Sen. Pete V. Domenici (R-NM) could see a storm coming. The US House had just passed its latest bill to deny financial incentives to major oil companies and use the money to fund alternative energy programs. Crude prices were days away from breaking their inflation-adjusted record as the overall economy continued to slow down.
So the Energy and Natural Resources Committee’s chief minority member sought time to make Senate floor speeches on Feb. 28-29 to address a problem that has grown increasingly political: the economic consequences of allowing oil imports to keep growing.
Domenici noted that experts estimate that foreign oil will cost the US $400 billion this year. He cited National Defense Council Foundation estimates that importing oil deprives the US economy of more than 2.2 million jobs/year and creates another $825 billion of hidden costs including oil-related defense outlays, lost government revenues, and reduced domestic investment.
“Nearly all of us, and nearly all of our constituents, can agree that America’s dependence on foreign oil must end,” Domenici said.
Key element ignored
Domenici suggested that a strong US energy policy would rely on increasing domestic oil and gas production responsibly; accelerating research and development of alternative energy sources, and significantly enhancing conservation.
There is broad agreement on the last two elements, but the first is generally ignored, he said, adding that increasing US oil and gas production won’t solve problems by itself. “But with proven reserves of more than 21 billion bbl of oil, and undiscovered reserves of more than 100 billion bbl, it is simply unacceptable that America fail to meet a greater share of our own needs with domestic energy resources,” he said.
Counterproductive action
Raising US production involves more than issuing leases in the Arctic National Wildlife Refuge and on more of the Outer Continental Shelf, he said. It also means ending counterproductive maneuvers such as inserting drilling permit application fees and an oil shale moratorium into the omnibus appropriations bill late last year.
In addition to the House’s latest energy bill, Domenici said, “Some in the majority seek to make it more difficult for our military to purchase unconventional fuels from our allies in Canada...and to undo lease agreements that American companies have to produce energy in the Gulf of Mexico. This makes no sense.”
Instead, he said, it’s time to take action on an aggressive agenda of old and new energy ideas. “We must recognize that reasonable policies to reduce our dependence on foreign oil are American ideas, not partisan agendas. We must affirm that these policies are worth pursuing because additional steps can and should be taken to reduce the amount of energy this nation imports,” Domenici said.