Wednesday, April 27, 2005

The new presidential energy plan

At the risk of stating the obvious, the new presidential energy plan seems mainly to be a public relations stunt aimed at trying to reverse some of the latest polls, which show growing public discontent with high gas prices – and the President. (Somehow I doubt he earned any points by hobnobbing with Saudi Crown Prince Abdullah.)

The refinery/military base notion seems to be in the pr category. As you probably know, the House-passed energy bill includes a provision that would permit the Department of Energy to override EPA or state objections to re-starting closed refineries in high-unemployment areas. This idea has raised major concerns with low-income constituencies and those interested in environmental justice: The Department of Energy is not qualified to pass judgment on issues involving health or the environment, and poorer people are likely to suffer if corners are cut.

When congressional leaders met last week with the President, Rep. Joe Barton (R-TX) described this refinery provision to the President. Barton later reported that the President expressed interest in expanding the concept to closed military bases.

But who the heck would pay to build refineries there? The cost of building a refinery is huge: A private outfit is moving to build a new refinery in Arizona [see at ] at a cost of $2.5 billion! (By the way, they are receiving needed environmental permits.)

There’s been a lot of misleading propaganda on this question about the lack of new refineries. Oil companies generally haven’t built them because: 1) they’re expensive; and 2) they’ve historically made pretty small margins on refining operations; and 3) it’s generally been better for them to manage output to prevent refined products from significantly outpacing demand. (Notice they are making huge profits right now.)

The real pity is that the President has adamantly opposed the one initiative that could really make a difference to reduce our dependence on foreign oil – setting significantly better fuel economy standards. But, of course, the oil and car companies wouldn’t stand for that.


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alberthaanstra said...

Hi Blogger!

Great Blog you have here. Did you hear about clean energy? Is it solar energy, wind energy or nuclear energy?
I think (and hope) it is positive energy!

Signed, Albert

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