August 28, 2006

August 28, 2006 | Commentary on Energy and Environment

Procrasti-Nation has no place in energy race

Congress, keep that cork in the bottle. The race for energy independence hasn't been won yet.

Yes, the Senate approved legislation to open 8 million acres in the eastern Gulf of Mexico for energy exploration. But so far, it has refused to negotiate with the House, which passed legislation that could open 40 times as much offshore area to exploration and produce at least 10 times as much energy.

With the oil-rich Middle East in turmoil, Venezuelan dictator Hugo Chavez trying to cut off the hemispheric spigot, much of the rest of the oil-producing world in uncertain hands, and China and India becoming major purchasers of energy, the need for us to produce our own never has been greater.

We're vulnerable to almost any hiccup in our present supply line. When corrosion on an oil-transit line shut down half the production in Alaska in early August, experts warned that lost production could add $10 to the price of a barrel.

That the Senate congratulates itself on so timid a step illustrates perhaps an even bigger obstacle to energy independence -- letting parochial concerns keep us from harvesting the plentiful energy within our grasps.

Rep. Devin Nunes, R-Calif., hopes we catch on soon. He recently introduced the American-Made Energy Freedom Act, one of the few legislative efforts in recent years to treat the problem with the seriousness it deserves. Among other things, Rep. Nunes' legislation would calls for extracting oil -- and more -- from America's largest untapped source of domestic energy, the Arctic National Wildlife Refuge (ANWR).

Strangely enough, it seems that an abundant supply of domestic oil and unreasonably high gas prices -- a true reflection of our "procrasti-nation" -- are not enough of an incentive to invest time and resources to drill. However, Rep. Nunes has discovered a remedy with his proposal to extract more than oil from ANWR.

Sponsored by 12 Republicans and nine Democrats, Nunes' proposal would provide both short-term and long-term incentives to drill in the designated 2,000 acres of ANWR. Critics say the 10.4 billion barrels there aren't enough to make exploration worth it. But experts say ANWR would produce far more than that. Look at the disruption to the market when just 400,000 barrels per day were suddenly unavailable because of the corroded line from Prudhoe Bay. That one blip left us without 8 percent of our energy production.

Nunes proposes more than just drilling. He suggests creating a trust fund where the entire federal share of ANWR's royalty and lease revenue -- an estimated $40 billion to $50 billion -- would go toward a trust fund that would finance new energy technology, such as cellulosic ethanol and liquid coal, both of which are actually good for the environment.

The green movement would have to abandon its holy war aimed at protecting ANWR from exploration, especially if doing so would finance the largest fund ever created for pursuing alternative and environment-friendly resources. Proponents and opponents of ANWR exploration would share the credit for a new generation of energy sources.  

Drilling in ANWR alone would increase our domestic productivity by as much as 1 million barrels a day for the next 30 years. The United States uses about 7 million barrels per day, so ANWR would account for nearly 15 percent of our oil during that time. And estimates for areas that haven't been explored are notoriously low. At Prudhoe Bay, just a few hundred miles to the north of ANWR, officials projected a haul of 9 billion barrels at the most. Recently, the 15 billionth barrel was shipped south, and no end is in sight. 

ANWR's oil wouldn't hit markets for another five to seven years, but Nunes' legislation would allow Americans to start reaping the benefits sooner. Money would start flowing from oil companies into the trust fund within 18 months, and the fund could collect as much as $6 billion in just the first two years of drilling. And since corn for ethanol and coal for the coal-to-liquid exchange can be found in every state, it's time all members of Congress take a look at such proposals.

Perhaps when China's state-owned oil company sets up shop off the coast of Cuba -- in waters American companies are forbidden to explore -- lawmakers will awaken to the problem in our midst and the dangers of procrastination. But who knows? Heat-related blackouts in major American cities haven't gotten our attention; $3-a-gallon gasoline hasn't either.

President Bush is right: The United States is addicted to oil. For the time being, we need to feed the addiction. But we also need to need to move toward the day when we can wean ourselves off of it. Rep. Nunes has found a way to do both.

Amanda Reinecker, a junior at Loyola College in Baltimore, Md., is an intern at The Heritage Foundation.

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