I’ve been in the energy business a long time. As CEO of Pace Global Energy Services, I’ve been actively engaged in the energy industry for more than 35 years. It’s always amazing to me how the more things change, the more they stay the same. This is especially true during periods of gasoline price spikes.
It is Washington’s self serving habit to look for villains in the energy industry when gasoline prices rise. Last week several Senators introduced the “Close Big Oil Tax Loopholes Act” following President Obama’s earlier request for congress to “take immediate action to eliminate unwarranted tax breaks for the oil and gas industry and use the dollars to invest in clean energy”. Irrespective of your views on the appropriateness of these tax breaks, one doesn’t need to be an expert in Machiavellian tactics to know that these knee jerk reactions are intended to be detractions rather than purposeful.
In fairness, the stark reality is that no administration since the Nixon Administration has designed nor has been disciplined in the execution of a thoughtful energy program that would reduce our dependence on Middle Eastern oil. President Nixon’s 1973 initiative, in response to the first Arab Oil Embargo, to create the Department of Energy and announce Project Independence, was likely the most comprehensive, even though not systemic or successful.
And now, the Obama Administration’s impediment of domestic oil and gas development, the erection of regulatory barriers to the construction of the Keystone XL Pipeline to import 500,000 barrels/day of growing Canadian synthetic crude production and the aggressive actions of the EPA to impede if not altogether halt the development of vast new shale gas resources made possible by advances in drilling and completion technologies, is entirely consistent with our historic pattern of failing to be disciplined to the truth about the gravity of our current situation.
As a consequence of our chronic lack of leadership and resolve, the United States after nearly 37 years, continues to export dollars and remains content to allow our economic and political security to be subject to the market power of a small group of countries. Since 1973, in nominal dollars, we have invested over $537 billion in the Department of Energy, and have imported oil in the amount of over $3.4 Trillion dollars and we are little better off than we were in 1973. And, leave no doubt about the consequences to Europe and the United States and the solutions that would need to be deployed if Saudi Arabia became destabilized.
With advancements in renewable energy technologies, the availability of domestic natural gas, access to prudent offshore drilling opportunities, and major advancements we have made in energy efficiencies, the United States is truly in a position to materially alter the equation of our dependence on imported oil and oil products.
But sadly, while these opportunities for change are now available, what is still resident seems to be the lack of leadership and resolve to develop a prudent and comprehensive plan that balances environmental risk with economic and security risk, that considers the balance of public and private sector roles and the early and proper deployment of funds to accelerate renewable energy sources that truly are stable and beneficial.
We are at a unique time in terms of our ability to enhance domestic fossil energy supply, to take advantage of our renewable energy technology, and to impede the control that Middle East oil has over world economies.
Emotions and the overall level of discord are now at super-heated levels in Washington with no exception for energy policy. I hope we all avoid looking for “villains” and seek authentic collaboration with all stakeholders. I think we all need to take a deep breath, put past differences behind us and work together to come up with an energy policy that addresses the fundamental issues that we face and to do so without all the headlines.