Filed under: Capitalism, Economy, Energy, Liberalism, Politics | Tags: High Energy Costs Cost Jobs, Ignoring Evidence, Unexpected Consequences
Are you noticing the rising prices in the grocery store? Manufacturers try to hide the increases by making packages smaller, yet raising the cost per ounce. Sugar used to come in 5 lb. packages, now it comes in 4 lb. packages. Ice cream is now sold in a 1½ pint carton instead of 1 quart. Some cereal boxes have become thinner.
A new study from the Consumer Energy Alliance blames the lack of a national energy policy for America’s economic troubles. Higher prices are costing jobs, and higher prices are putting a strain on struggling families. 3.7 million jobs have been lost because of high energy prices.
Higher energy costs means that costs of anything that is transported go up, and jobs are lost. Industries such as manufacturing, agriculture and transportation are strained as well by endless regulation and red tape including restricted access to energy. Truckers spent $163.4 billion for fuel in 20089.
The offshore energy potential of the United States is estimated conservatively at 45 billion barrels of oil and 183 trillion cubic feet of natural gas — enough to power 60 million vehicles for 25 years and enough natural gas to heat 60 million homes for 57 years. Although demand is increasing, but we only explore in about 15 percent of the nation’s offshore areas.
Offshore energy production would bring in billions for the U.S. Treasury. The decline in production in the Gulf of Mexico from the government refusal to issue permits could cost the federal government more than $1 billion in revenue this year. President Obama has gone for window dressing like releasing 30 million barrels from the Strategic Petroleum Reserve which is designed to be there for emergencies. The emergency seems to be the effect of the rising price of gas on Obama’s reelection hopes. The Obama administration is denying Americans access to domestic oil — in spite of Obama’s oft-stated claim that we have to reduce our dependence on foreign oil.
- Production in the western Gulf of Mexico has dropped nearly one-third of a million barrels per day since last April.
- Increased production in 2010 is the result of increased horizontal drilling in North Dakota.
- We cannot drill off the Pacific Coast, Atlantic Coast or the eastern Gulf of Mexico.
- The US Environmental Appeals Board has withheld air quality permits preventing Shell from moving forward to develop 27 billion barrels of oil off the coast of Alaska.
- Because of the decline in allowed production in Alaska, the oil pipeline may have to be shut down, leaving it unavailable for future drilling.
CEA’s report also estimates the economic cost for other industries, including the benefits of new nuclear power plants. Their 52-stage study is available here.
No one in the federal government seems able to understand how high energy prices play out through the economy. Refuse to issue drilling permits, and those who were working on offshore rigs are out of work, workers who supply offshore rigs are out of work, restaurants and stores who serve oil field workers and their suppliers lay off people or go out of business. Revenue to the treasury from production does not go to the treasury. Lack of revenue to the treasury means that the President wants to raise taxes to get more revenue so he can spend more on subsidizing green energy. Green energy requires generous subsidies to stay in business. If the subsidies are not forthcoming, they lay off their workers. The higher costs of energy raise the cost of everything, costing more jobs throughout the economy. And so it goes.
There is plenty of evidence for all these effects, but liberals are singularly uninterested in evidence. All these cascading effects of their policies occur so — unexpectedly!
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Another great post. More proof that our energy policies are insanely stupid.
Comment by Ken Gardner July 6, 2011 @ 3:45 pmThanks. It makes me crazy. Democrats aren’t interested in evidence. Tom Sowell just wrote a column on this. We have all sorts of evidence from Europe that alternative energy may have been a nice idea, but it doesn’t work, and cannot work at the scale demanded. We have all sorts of evidence from many countries— and the UK and Canada are just easy examples— that socialized medicine doesn’t work. It’s not even working in Massachusetts — yet they pay no attention and want to repeat the folly.
Comment by The Elephant's Child July 6, 2011 @ 4:01 pmHit the nail on the head with this post. Energy prices ripple throughout the economy witch can have disastrous consequences
Comment by kevinbsnyder July 6, 2011 @ 6:03 pm