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Regulation not the cause of America's growing oil problems

by Chester Sansbury, a REP member in South Carolina
published in the Island Packet on June 19, 2005

Some people seem to think that high oil prices are a result of over regulation by the government. Many of them express themselves from a partisan viewpoint and ignore the true facts and mislead the ignorant for political purposes. Meanwhile, our leaders are heavily influenced by a few large oil companies who are more interested in profits than protecting consumers and adjusting to reality.

Here are some true facts worth learning:
America's problem is not government restraints on domestic production and refineries. Our problem is increasing demand for a product in a global market that we have limited capability to influence, even if all regulations affecting domestic production and refinery construction were eliminated. Increased domestic production and lower health and environmental protection standards would not automatically result in lower cost of oil and less vulnerability to disruption in foreign sources. Oil is traded in a global market where supplies are interchangeable and the last barrel sold determines the price. Even if we could magically replace half of oil imports with domestic production (which is impossible), our economy and security still would be at risk from overseas events that influence the global oil market.

American oil independence is an illusory goal. We are decades past our oil production peak. There is no realistic prospect of reversing that fact. We've drained our biggest, cheapest oil fields. We control only 2 percent to 3 percent of remaining global reserves, two thirds being in the Middle East. Today, imports make up 58 percent of our use. With our demand continuing to rise, imports will be 70 percent of consumption by 2025. Opening the Arctic National Wildlife Refuge, which is believed to hold the largest untapped oil left in the U.S., would lower imports a mere 4 percentage points for only a few years. It would also increase and prolong our dependence on an 800 mile pipeline vulnerable to acts of sabotage.

By opening the refuge, we will have degraded a rare natural treasure in pursuit of an illusion. What if South Carolina's ACE Basin, the Cape Romain Wildlife Refuge, or Port Royal Sound had oil. Would we agree to degrade these environmental jewels for it?

With demand rising in the United States, China and other nations, the global oil market is stretched. It also is more vulnerable than ever to disruptions due to terrorism and political manipulation. In fact, because of our reliance on foreign oil, our economy and security are more vulnerable to foreign intrigues and chaos beyond our control. It seems our political leaders have learned nothing. Things worsen while they diddle.

If we continue our oil addiction, we'll need increasing fixes from foreigners who will continue to have more influence over the global oil market than us. We'll continue endless entanglements in oil-rich countries beset by ancient ethnic or religious feuds and widespread corruption. We will make our economy and security ever more dependent on a production and distribution infrastructure that is vulnerable to acts of sabotage and terrorism, here and abroad. We now find ourselves in increasing competition with a fast growing China and other nations over the same planetary pot of black gold. Unless we reduce our consumption substantially, we will send more dollars overseas (which hurts our economy and jobs), weaken our currency, and endanger our security.

The only way to reduce our dependence on foreign oil is to reduce our dependence on oil, period. We must invigorate vehicle fuel efficiency measures and increase tax incentives for hybrid car engines and other efficient transportation technologies. Instead of giving tax breaks for gas guzzlers, we should give breaks for gas misers and alternative fuels.

America has a business and cultural system that relies on efficient and rapid transportation of goods and people. Without a transportation system less dependent on oil, our economic security is doomed. We must elect trustworthy leaders and demand that they confront this worsening debacle.