Wednesday :: Feb 1, 2006

Double-Dealing Gas-A-Ho

by pessimist

As the post below notes, it is necessary to crank up the Truth Squad again. In an effort to assist that movement, I'm now going to do my part.

One is more likely to get accurate reporting and opinion from the foreign media than one is likely to get from the domestic variety. I thought that I would browse about a bit to see what sort of reaction was showing up to King George's Annual Royal Achievment Pronouncement State Of the Union Address.

I've limited this post to energy issues as covered in the speech.

In his annual State of the Union address to Congress, Mr Bush set out plans to pour billions of dollars into researching new technology for producing alternatives fuels such as ethanol through the "Advanced Energy Initiative" which, he hopes, will cut oil imports from Arab countries by 75 per cent over the next 20 years.

Bush said:"America is addicted to oil, which is often imported from unstable parts of the world."

It might be pointed out that as a heavy drinker in his youth, he also knows a bit about addiction.
FACT - BUSH HAS INCREASED DEPENDENCE ON FOREIGN OIL: Sixty-six percent of oil consumed in the United States comes from foreign sources, up from 58 percent in 2000. Americans now spend $200,000 a minute on foreign oil and more than $25 billion annually goes to Persian Gulf states for oil imports. [Energy Information Administration, 1/06; American Progress, 2004 (PDF) ]
FACT - BUSH ENERGY BILL WILL NOT REDUCE RELIANCE ON FOREIGN OIL: The energy bill signed and supported by President Bush "rejected a Senate provision that required reduction of oil consumption by one million barrels per day by 2015." Under the bill, "our need for imported oil will continue to grow for as long as models are able to project." [U.S. House Committee on Government Reform, 7/05]
Since George Bush took office, net imports of oil have risen from 53% of consumption to 60%.
Reacting to last night's speech, Jason Mark, of the Union of Concerned Scientists, said: "We could save more than 75% of Middle East oil imports within ten years by increasing the fuel economy of our cars and trucks to 40 miles per gallon. The investments in renewable fuel technologies the president proposed will pay important dividends down the road. But you can't transform transportation by research alone. We need aggressive policies now to wean ourselves off oil."

This is the sort of aggressive policy that Bu$hco instead delivered:

The White House opposed a bipartisan congressional measure to tighten fuel economy standards four years ago, and the tax system actually encourages the use of huge four-wheel drive SUVs.

The economic stakes are quite high:

It was Mr Bush's remarks on the threat of energy dependency which may cause the biggest impact in a country where around 250 million cars still clog its highways. Like consumers, businesses have been hurt by rising energy prices, and the President renewed his call for long-term energy self-sufficiency. His weapons: home-grown American products such as ethanol and green technology. He wasn't an Al Gore clone, but the President didn't mention drilling under the Alaskan tundra or other controversial pronouncements of the past.

With oil prices close to record levels and Exxon reporting record profits of $10.7 billion in the fourth quarter of 2005, the former oilman highlighted the need to improve technologies in order to reduce US oil imports. To achieve his goals, the president wants to rely - once more - on market incentives spurred on by an American spirit of innovation, and avoid government regulation.

But that approach has done little to curb greenhouse gases.
Aides say that Mr Bush was impressed by Brazil's use of cellulosic ethanol produced from sugar cane as an alternative to fossil fuels. He believes US cutting-edge technology will help make a similar scheme become commercially competitive within six years. Bush said: "The best way to break this addiction is through technology. Since 2001, we have spent nearly 10 billion dollars to develop cleaner, cheaper, more reliable alternative energy sources – and we are on the threshold of incredible advances." He said he will now seek a 22% increase in funding for research into clean energy resources.

Mr Bush's oil independence pledge is less ambitious than it seems at first glance. Alternative fuels would only account for 15% of total imports. That does not sound so breathtaking.

Though much of the business community likes what Bush said, some wanted to hear more about aggressive production and short-term relief from soaring natural gas prices. Says National Association of Manufacturers President John Engler: "We had hoped President Bush would forcefully address this fundamental contradiction in our energy policy and were disappointed that he did not."

How could he? This was his crowning achievement as a businessman:

The President is a former Texas oil man himself, whose early chequered business career included a series of speculative ventures in the industry culminating in the controversial sale of his stock to Harken Energy in 1990 for just under $1 million.

So how does we know just what the facts is?

FACT - BUSH PUSHED FOR RENEWABLE ENERGY CUTS IN LATEST BUDGET: President Bush's FY06 budget request for the U.S. Department of Energy's (DOE) energy efficiency and renewable energy programs envisioned "reductions totaling nearly $50 million - an overall cut of roughly four percent." [Renewable Energy Access, 2/28/05]
FACT - BUSH REJECTED BIPARTISAN PLAN TO SET GOALS FOR RENEWABLE ENERGY: Last year, President Bush "oppose[d] efforts to include a national renewable energy requirement for utilities in Congress' broad energy legislation." According to the Union of Concerned Scientists it "is a cost-effective, market-based policy that requires electric utilities to gradually increase their use of renewable energy resources such as wind, solar, and bioenergy," to between 10 and 20 percent by 2020. A 10 percent standard "would have virtually no impact on electricity prices and could save consumers as much as $13.2 billion." [Reuters, 2/10/05; Union of Concerned Scientists; Union of Concerned Scientists]
FACT - BUSH ENERGY BILL CONTAINED LITTLE ON RENEWABLE ENERGY: The energy bill supported and signed by President Bush dropped a provision that would have required utilities "to generate at least 10 percent of their electricity through renewable fuels by 2020." [New York Times, 7/26/05]
Incidentally, the largest sources of American petroleum consumption are Mexico and Canada. Imports of oil and refined product from the Gulf make up less than a fifth of all imports and 11% of total consumption, according to US Energy Department statistics. The Middle East currently provides about 20 per cent of US oil imports, or 2.2m barrels a day.
But even if that level were reduced, Middle East countries would continue to exert control over global prices.
With gas prices on voters' minds, energy policy is sure to remain atop the political agenda in '06. But bipartisan policymaking appears unlikely.

So dig deep into that musty wallet, drive out all those cobwebbed moths, and get used to shelling out those sheckels to Shell.

It's the only way that the GOP can stay on top of energy issues - and everything else that is profitable in America.

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