Drill Drill Drill?

Here's a thought experiment for you...

Let's say there is this natural resource called "shmoil". There is only a limited amount of shmoil in the entire world, and one day it will dry up. Nevertheless, shmoil is critical to the basic function of our economy and our nation would fall back into the dark ages without access to shmoil.

If you were President of this country, would you:

a) Elect to use the shmoil of other nations while shmoil prices were relatively low, in the mean time working hard to identify replacements for shmoil and thus guaranteeing you have shmoil reserves through the very end?

OR

b) Open up full exploitation of domestic shmoil early on, resulting in your nation being the first to run out of shmoil and thus being at the mercy of other nations at a time when shmoil prices are sky high due to the great lack of supply?

I vote for a).

Here's the cold reality. The USA has 3% of the world's known oil. It has 25% of the world appetite for oil. We need to be prepared to drill all 3% if it comes to it, but we don't want to open everything up  and end up having no oil reserves when the real oil crunch hits.

Ideally, we develop alternate energy resources and don't ever need to fully deplete the Earth of its oil. But we can't plan for the best and ignore the possibility of the worst. We need to manage access to our natural resources so we are guaranteed to be the last nation on Earth with oil.

We need the oil companies to drill using the oil leases they have available today and stop whining about getting access to ones they don't need access to right now.

Energy Proposal

We have a lot of vague platitudes out there... "We should drill for oil offshore"... "We need an Apollo program for alternative energy"... Blah blah blah.

What we need is a specific energy program. Here's one:

1. Reduce foreign oil dependence

• Place a tax on unused oil leases.
• Make drilling available in the arctic and offshore... conditional upon exhausting 50% of existing, unused oil leases.
• Remove all federal gasoline taxes.
• Place a 33% tax on every barrel of oil imported from abroad.
• Create mild incentives for the use of natural gas and "clean" burning coal.
• Provide R&D tax breaks on seeking out new sources of oil in the USA.

These combined options create a huge incentive to sell gasoline from American wells. Quite simply, American gasoline will be cheaper than foreign gasoline and the market will vote with their dollars. We have to be a bit careful, because we don't want to create so deep an incentive that we overly rapidly deplete our own reserves. They need to last at least long enough to get to hydrocarbon-independence.

This policy will also ensure that before we damage our national treasures in the name of removing our dependence on foreign oil, that we exploit the resources we already have in place.

2. Eliminate Hydrocarbon Dependence

• Allow no new power plants based on hydrocarbons.
• Subsidize the development of nuclear, wind, and solar power plants.
• Remove all tax breaks for energy companies related to hydrocarbon R&D (except as it relates to the specific tax breaks listed in part 1).
• Boost tax breaks for R&D spent on alternative energy sources.
• Remove capital gains taxes on investments in proportion to their expenses related to alternative energy R&D (careful how this is setup, can be a nice loophole for jackasses).
• Mandate that all new vehicles sold after 2015 must get 50 miles/gallon. Allow a very high "gas guzzler" tax for exceptions through 2020.
• Mandate that all new vehicles sold after 2030 must not require hydrocarbon energy sources.
• Mandate that all vehicles on the road must be powered by systems that do not require hydrocarbon energy sources by 2050.

Cheaper oil and gas should never be an objective; it just delays the inevitable—our need to not use hydrocarbons at all as sources of energy. Absent of an incentive like high gas prices, we will continue down the path of least resistence—fueling up at the pump.

And the reality is that we don't want the departure from a hydrocarbon system to be based on the free market. It must be mandated, or it simply won't happen unless the pain in the pocket book is severe enough. We therefore need regulations that establish a timetable for the move away from hydrocarbons.