Last week President
George W. Bush held a press conference on the current state of the
economy and the high cost of energy. In it he made several important
points. First, he noted that one reason gas prices are increasing is
that global supply has not kept pace with the growing demand
worldwide. Members of Congress, he noted, “have
been vocal about foreign governments increasing their oil production;
yet Congress has been just as vocal in opposition to efforts to expand
our production here at home. They repeatedly blocked environmentally
safe exploration in ANWR. The Department of Energy estimates that ANWR
could allow America to produce about a million additional barrels of
oil every day, which translates to about 27 millions of gallons of
gasoline and diesel every day. That would be about a 20% increase of
oil…and it would likely mean lower gas prices.”
Senator Charles E. Schumer’s (D-NY) response: “Unless the [Bush] Administration gets [the Organization of Petroleum Exporting Countries] OPEC
to increase oil supply, American consumers are going to be in for a
scorching summer of $4 gasoline with no relief in sight.” Apparently
Senator Schumer expects President Bush to bully other countries into
relieving our economic problems. This is wise foreign policy advice if
ever there was some. And if foreign governments do not want to help us
we should not expect Congress to do anything about it. After all, why
alleviate needless financial hardship when some Senators can use it as
a political weapon?
Another factor
contributing to the high cost of energy is that America’s refining
capacity has been stagnant for 30 years, the last time a new refinery
was built. Like ANWR exploration, Congress repeatedly has blocked
efforts to build more refineries and expand capacity. It has done the
same with the use of nuclear energy. Congress also is “considering
bills to raise taxes on domestic energy production, impose new and
costly mandates on producers, and demand dramatic emissions cuts that
would shut down coal plants, and increase reliance on expensive natural
gas,” as President Bush stated.
Finally, there is no end
in sight for Federal subsidies to multi-millionaire farmers. These
subsidies, as this column has noted before, cost American taxpayers
millions of dollars a year, are wasteful, and generally hinder the
development of more productive farmland and the planting of
market-driven crops. Yet Congress shows no inclination to cut
subsidies from the current Farm Bill. By paying farms to plant
specific crops regardless of the demand for those crops or allowing
their fields to lie fallow, these subsidies unintentionally raise the
price of other commodities that could be planted instead. President
Bush was correct to note that Congressional support for farm subsidies
will do little other than contribute to the rising prices of food.
President Bush should be
commended for giving this speech. He was correct to remind Americans
that if we want to lower the cost of energy we must be willing to use
our own resources, whether they are natural or those we can build,
rather than rely upon others to provide for our needs. After all,
isn’t self-reliance part of the American spirit. We should not rely on
foreign governments, many of which are volatile, to supply our energy
needs, nor should our large farmers rely on Federal Government handouts
to prop up their financially lucrative businesses.
Throughout this economic
downturn it has seemed as if Congress, the Federal Reserve and other
government agencies have reacted to the crisis rather than thought of
productive ways in which they could lead on the issue. It is wise for
the President to begin to exert some leadership on this issue.
Hopefully he will maintain a spotlight on this issue and pressure
Congress to initiate some constructive change, not implement more
regulation and taxes.