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Energy Policy

09/09/08 7:55AM By Dick Mallary
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(HOST) One of the most critical issues in this campaign year is the nation's energy policy, and commentator Richard Mallary thinks that most of the debate so far is missing a fundamental point.
(MALLARY) At a time of high prices and looming shortages, we are hearing lots of nostrums designed to give the appearance of a painless solution to the energy challenges we face.

We really need to dig below the rhetoric and assess underlying realities. The increase in our economic product and improvements in our standards of living have been closely correlated with increases in the use of energy - much of it derived from the burning of fossil fuels -- coal, oil and gas. But as we use more and more of these fuels, we deplete the resource, their cost increases and we emit into the atmosphere increasing amounts of carbon dioxide, probably leading to global warming.
So a major element in any sound energy policy should be to reduce our use of fossil fuels, with a special emphasis on imported oil; and do it with the least possible effect on our economic health and our standard of living. Some of this can be accomplished by the displacement of fossil fuels by renewable energy sources or nuclear energy, but that is a long term project and depends on uncertain technological breakthroughs. The most important element must be the prudent and efficient use of the energy we consume.

Lately, there's been good news on this front. More people are buying small and fuel-efficient cars. Total automobile miles traveled in the United States have declined. Mass transit use and ride sharing have expanded. The use of railroads to move freight has increased. Airlines have pruned flight schedules so that flight load-factors have increased - using fuel more efficiently. Homeowners are insulating, turning down thermostats and buying wood stoves.

And the reason for these improvements is very simple. Prices for oil and derivative fuels have risen sharply and people are reacting to the cost increases. The public does respond rationally and actively to four and five dollar a gallon gasoline and heating oil.

So it seems ironic and counterproductive that politicians are now rushing to propose schemes to reduce high fuel prices. Gas tax holidays, tapping the strategic oil reserve, higher appropriations for LIHEAP and subsidies for corn based ethanol are proposals designed to show that the politicians feel their constituents' pain. Yet, if these programs work to reduce fuel costs, they will cancel our recent efficiency gains.

I'm not running for office this fall, so I dare to say it: High fuel prices are good for America. Cheap fuel begets waste. Expensive fuel promotes conservation.
As we see oil and other fuel prices falling rapidly, we ought to find a fair way to maintain stable high prices for fossil fuels with the government collecting the difference between normal prices and a higher minimum price. The money collected to maintain the minimum price should be returned to the public through grants or rebates or tax reductions so that the economic burden on the public would not be increased.

But I'm afraid that's a policy plank that you won't hear from any of the candidates.
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