MANY paths could lead to North American energy security, but none can be reached without a road map. A comprehensive national energy policy would provide a map. Unfortunately, no such policy exists.
Barack Obama's “all-of-the above” energy plan hardly qualifies as a map (or even as real policy), but a Tulsa-based think tank funded by an Obama supporter has some solid ideas for energy security.
Obama would find some things to like in a plan unveiled recently by the National Energy Policy Institute, endowed by George Kaiser, the Tulsa oil entrepreneur, philanthropist and Obama donor. The five-plank policy platform includes a tax on oil products and clean energy standards that, NEPI's report says, could cut oil consumption by 2.4 million barrels a day by 2035.
Often forgotten in the discussion about energy independence is that producing more energy on this continent (rather than importing it from the Mideast) focuses only the supply side. To truly boost independence, the demand side must be given equal weight. Therein lies the political rub.
NEPI's Charles Wohlforth says the policy is visionary but not “pie in the sky.” That's a tall order when you set out to increase energy independence while lowering carbon emissions. To get there requires cutting consumption of gasoline and upping the use of renewable or low-carbon fuel to make electricity. Both rely on tapping natural gas to run more vehicles and make more power.
NEPI is pushing a national goal of generating 80 percent of electricity with “clean” energy by 2035. We don't think this is possible using wind and solar power alone; adding gas and nuclear sources to the mix makes it doable.
The most controversial aspect of the proposal is a type of carbon tax euphemistically termed as an “oil security dividend.” Products made from oil such as gasoline would be taxed more to discourage consumption. An offsetting cut in the income tax would cover the added amount; consumers will get the income tax break regardless of how much fuel they buy. So the less you buy, the less of the “oil security dividend” you would pay and the more the income tax cut would benefit you.
The NEPI plan is officially focused on prosperity and energy security, but it contains heavy doses of environmental concerns. Clearly, cutting pollutants is as important to the institute as importing less oil from the Middle East. That's OK with us as long as federal energy policy balances the needs of the environment with the needs of consumers and business and industry. Increasing consumption of natural gas for transportation and power generation would help the environment and the Oklahoma economy — not to mention state revenues.
NEPI is selling its plan as one emphasizing market solutions rather than Washington mandates. It stresses “goals” rather than diktats. This is the right approach and far less intrusive than any energy policy coming from environmental activists.
A reasoned approach to energy policy can't overlook the effects of carbon consumption on the environment, just as a reasoned approach to environmental policy can't overlook the effects of regulation on the economy. Energy efficiency not only helps the environment but also keeps more money in the wallets of consumers. And NEPI's plan has a big emphasis on cutting oil consumption through efficiency as well as switching the fuel of choice for trucking away from diesel.
Still, that “oil security dividend” thing, although lacking the politically poisonous “cap and trade” moniker, will be a tough sell. On the road to North American energy security, higher taxes may not make the map.