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June 23, 2008
It's Long Past Time to Move on Energy Solutions
Posted by Peter Cutler

A few decades ago Maine had no oil shortage. America produced most of its needed supply by drilling and refining within its own geographical boundaries . Maine also had hydroelectric sites and as the years passed a nuclear power plant was added along with biomass power producers such as MERC and the plant at the Sappi Westbrook mill. Many homes were heated by wood or coal. In the 1950’s my family lived three miles from town and I and others walked, rode a bicycle or sought rides from friends or parents to attend work, school or recreational activities.

All of these things together helped make the cost of energy affordable for Maine and the Nation.

But today, Augusta is desperately seeking additional Federal funding to help supply heating oil to people whose incomes fall short of enabling them to heat their homes and at the same time meet a multitude of increasing costs of living, all of which are affected by the skyrocketing price of crude oil.

There has not been a new oil refinery built in this country for over thirty years. Existing wells have been capped and exploration is severely limited by regulations imposed at the insistence of environmental lobbyists. The vast majority of our oil is imported from countries who, charitably can be described as not having our best interests in mind.

How to improve this dire situation?

With our energy profile currently overly-dependent upon petroleum, it would seem to make sense to pursue with haste alternative energy sources while increasing our domestic oil producing and refining capacity. I don’t see this happening without strong and creative actions from our political leaders at all levels.

Unfortunately, the immediate reaction from Gov. Baldacci and our entire Congressional delegation was to repudiate the concept of initiating offshore drilling because that could possibly damage Maine’s fishing industry, overlooking the fact that Maine’s fishermen are already severely hampered by Federal regulations and further frustrated by overfishing near our territorial limits by foreign ships and crews.

I use this example to help identify the problems we face in utilizing our bountiful natural resources to ease our energy problems.

In addition, wind power projects are blocked here in Maine by conservation groups (Friends of the Appalachian Trail, for one) who object to windmills on grounds varying from ruining the “esthetic value” of our mountains to speculation on the devastation of migrating birds encountering the towers. Sen. Ted Kennedy has repeatedly blocked windmills being located offshore and visible from the Kennedy compound on the Massachusetts coastline. And nuclear power is an unacceptable option for some, although there are foreign countries (France, for one) who have safely and economically embraced that source of power. Hydroelectric plants, once plentiful here in Maine, now are few in number and are still decreasing, the dams creating that source of power now termed “destructive” for impeding the “natural flow” of rivers.

One last issue: we should not overlook the possibility that a concentrated effort to weaken the economy of the United States through oil price manipulation might be an additional tactic utilized by radical elements of Islam in the ongoing war against the West. After all, one of the most effective tactics resulting in the fall of the USSR was pressure on many fronts that undermined the already shaky Soviet economic structure.

These examples indicate that our politicians and administrations, at all levels, Federal and State, have studiously avoided the mounting energy problem for decades, unwilling to alienate blocks of voters whose support helps them maintain their myriad and bountiful privileges.

An individual can save money on a personal basis by restricting his or her use of energy, but I doubt if conservation alone is going to influence the rising costs of gasoline, heating oil and electricity that produce negative effects on our economy . The growing energy needs of nations such as China and India will more than make up for any reductions achieved by America’s citizens.

For many of us on fixed incomes the price of implementing alternative energy systems such as solar, wind power or geo-thermal systems, with any cost savings a decade or more in the future, is sufficient reason to swallow hard and bear the increasing costs of heating and transportation.

It appears to me that increasing our stores of domestic petroleum, coal and natural gas is a necessary stopgap measure because without such actions our national economy and accompanying welfare is in continuing danger from outside influences – some of whom would be delighted to see us fall from our position of global influence and power. We need time to study, choose and develop alternative energy sources.

Only if we can unite in applying pressure to our political class, will they begin to seriously address our future. But we must agree to act en masse, insisting that our needs be recognized and acted upon by our “leaders” at all levels and voting out those who seek only the privileges of their political status rather than focusing on the welfare of the nation and its citizens as a whole.

Posted by Peter Cutler at 09:06 AM

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Comments

If Mr. Cutler is serious about applying pressure on our political class, then he should seek to tell the whole truth: Senator Susan Collins has said she would not allow drilling off the coast of Maine. It seems, then, that she should be a target of his ire as well.

Mr. Cutler notes "a concentrated effort to weaken the economy of the United States through oil price manipulation might be an additional tactic utilized by radical elements of Islam in the ongoing war against the West".

It might be, but the 500 pound elephant in the room is our our free market system. Enron was busted for energy market manipulations and we're watching securities traders getting frog marched to jail on the sub-prime scandal now every day. There's a new and serious investigation that's starting up on the energy speculators in our own borders that should have been undertaken years ago. Maybe we have found the enemy and he is us. Or at least he is our free market system.

We need practical systems of regulation to deal with these issues in America. The SNL crisis told us this along with 1,000 other things and we routinely wait until it's too late. Especially when our economy gets precarious, we are vulnerable to our own economic system since it rewards those who are preditory: lenders, speculators, etc.

The idea of returning to the good old days just before the oil embargo that sent our inflation streaming into double digits isn't realistic. US oil production peaked in 1970 and we're at about half of that now. To pretend the oil companies are unable to build refineries only because of regulation is not very realistic either: Exxon just broke all-time profit records in America. They definitely have the cash and means by which to invest further - if that's what they really want. With such profits, are they really going to want to change their ways?

I agree with Mr. Cutler about our needing to look to alternative energy, although I would point out at this point we have crossed the line where alternative energies are now worth the extra money because of the current cost of fossil fuels.

Wind, nukes and hydro all point to the same thing, however - electricity. That won't solve the car issue for a long time, but in Maine, 75% of our energy use is heating our homes (and 75% of Maine's homes heat with oil). If we choose an electricity strategy, it could pay off big time - and soon be sustainable.

If you don't know it, I suggest you check out Angus King's plan for wind power off the coast of Maine.

People in Maine living on fixed incomes are getting creamed - especially the elderly and the retired: since the current Republican administration came to power, energy costs as part of the average Mainer's budget have moved from 5% to 20% of total costs while medical costs have tripled in their role as well. For someone on a fixed income, that's horrible news and for far too many, insurmountable.

Now that oil has passed the actual cost of alternative energies like wind, the future is now. There is no reason to wait and so many to move. We need to begin a strategic move to invest in heating by electricity in Maine.


Posted by Daniel Kany
June 23, 2008 12:12 PM

Drilling in the US is no short term solution. The oil price bubble will collapse by repealing the Enron loophole that deregulated speculative trading and increased supplies from Iraq (an additional 3-4 million barrels a day) and punishing regulation of the Oil companies who have delayed making investments in hopes of causing a price bubble and an annoucement of a change in our trade policy to seek to balance trade.
A "free" market in Oil does not exist. 70% of oil supplies come from government controlled oil companies. All the other majors jointly make decisions. OPEC is not a free market. Today, the decisions of the US oil companies borders on treason since it is primaily their decisions that have escalated the price of Oil.

Posted by Jonathan Albrecht
June 23, 2008 01:03 PM

"the immediate reaction from Gov. Baldacci and our entire Congressional delegation" is what I have written in the article and I believe that "Congressional delegation" includes both members of the House and Senate. If I am mistaken, then I state that it was my intent to include Senators and House members under that characterization.

Posted by Peter Cutler
June 23, 2008 01:16 PM

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