The first point when you hear Barack Obama's charge that John McCain is a "third Bush term" on energy (a claim made outside an E85 retailer in Manheim, PA, in early April) and disingenuous attempts to suggest McCain has been bought off by Big Energy, is to review the following quote regarding the 2005 Bush-Cheney Energy bill: ""This bill does little to address the immediate energy crisis we face in this country. The handouts to big business and oil companies are irresponsible and will be disastrous for the people of Arizona. I cannot in good conscience vote to pass legislation that does not adequately address issues related to energy efficiency, security, and energy independence."
The person who released this statement? John McCain. Why? He has repeatedly evoked the memory of Teddy Roosevelt's populism and conservatism in describing his own political philosophy. John McCain refuses to use his position to get earmarks, unlike Barack Obama. McCain has a reputation among lobbyists of being one of the hardest lawmakers to influence. He will talk to lobbyists, because they represent companies or groups whom pay taxes.
Obama, in fact, voted FOR the 2005 Bush-Cheney Energy Bill, because it doubled ethanol use. Hmmm. You don't think it had anything to do with the fact that they grow a lot of corn in Illinois, do you?? But Obama has the AUDACITY to politically attack the energy policies of two principal national candidate opponents whom were among the 26 to vote against the "Bush Third-Term Energy Act": John McCain and Hillary Clinton.
He also uses various misleading statistics (amount of reserves, time to market for oil finds, influence of supplies on market prices, etc.) We are producing somewhere in the neighborhood of 7.5 million barrels per day of, say, 83 million barrels worldwide per day, exceeded only by Russia and Saudi Arabia at over 9 million barrels per day. Of course, we are consuming something like 20 million barrels. Are we ever going to ramp up production to 20 million barrels a day? No. We have to work on the spread, knowing when demand closes in on supply the price will escalate accordingly. We can close our foreign import gap two ways: (1) reduce barrels used, e.g., by component demand for gasoline and other by-products; (2) increase barrels produced. This will increase the global gap, all things held equal. What is tougher to tell is to what extent suppliers can extend their production to satisfy growing demand, particularly from the fast-growing Asian regions. Some supplier wells may be on the decline (e.g., Saudi Arabia, Mexico, Venezuela, etc.) This is not simply a short-term problem; for instance, we can expect the number of cars for the rapidly growing middle-income population in Asia to multiply quickly.
There are a variety of ways to cut down on the use of oil; one way is to conserve energy utilization (e.g., drive vehicles with more miles per gallon, cut down driving); another way is to find alternative supplies of energy that work together with or in substitution of, say, gasoline. For example, we could run cars on electricity (which can be generated by hydroelectric, wind, coal, solar, or other means) stored in batteries. A chief issue there is battery capacity/distance between charges.
Cars can run a 10 to maybe 20% of ethanol without modifying engines. With additional hardware which might cost within $200 per car in volume, we could make flex-fuel cars, thus enabling us to run an 85% mixture of ethanol. A current issue is that we create ethanol primarily from corn; the starch must be broken down into sugar, and the corn itself today requires a lot of resources--nitrogen/fertilizer, water, etc., not to mention fossil fuel spent in planting, harvesting and processing the corn. In the meanwhile, ethanol cannot be transported through existing pipelines, we maintain high tariffs on more efficiently produced sugarcane-based ethanol from Brazil to protect domestic suppliers, we don't have flex-fuel vehicles readibly available in the US, and and few fuel retailers are willing to dedicate E-85 pumps.
Trying to pick winners in the alternative energy industry is risky. Even on some high-profile goals, like hydrogen-powered vehicles, we've seen adjustments to earlier targets, with some predicting hydrogen cars won't be a serious factor for another 40 years. The Democrats are pushing on a string. High energy prices provide a natural incentive for the buildout of disruptive technologies.
John McCain has generally been supportive of alternative fuels, but his strategy "does not rely on subsidies, rifle-shot tax breaks, line-items for lobbyists, or big-government debacles." John has been skeptical about the energy efficiencies of corn-based ethanol, but agrees at today's oil prices, ethanol makes sense, just as he similarly announced a reversal of his position on offshore drilling. His votes must be understood of other conservative principles, e.g., he voted against a 1999 amendment which looked to add to money for solar energy because the dollars were not matched with a budget reduction elsewhere in a pay-as-you-go context. He prefers for government to set policy goals and let the private sector determine the means.
Obama's other recycled liberal "solutions" proposed in his major energy address: windfall profits taxes and tapping the Strategic Petroleum Reserves. For example, Exxon Mobil recently announced its biggest profit ever. Thus, it also has to pay more taxes. But the Democrats want to penalize Exxon unduly for its success, which is likely unconstitutional and in any event counterproductive (it doesn't tend to stimulate new domestic exploration). All of the oil majors are finding it hard to maintain their reserves as hostile sources nationalize operations. Now Barack Obama has reversed himself on tapping the Strategic Petroleum Reserves, basically in a transparent attempt to flood supplies and force down prices--a one-time decrease that does nothing about addressing our long-term supply/demand problem but which suddenly leaves this country economically vulnerable to a true emergency, such as a temporary disruption in oil from the Middle East due to war. This is not a "strategy"; it is shameless pandering for short-term political gain at the expense of our long-term strategy to protect our economic security.
