As I told my Foolish friends some time ago, we seem determined to be our own worst enemy on the energy front. That's not a new thing. It's been occurring for decades, or from about the time we began importing a greater percentage of our daily oil needs than we produce at home.
Indeed, we've always said the right things and meant well. For instance, I noted in an article in 2008 that then-President George W. Bush had stated emphatically that "We cannot let another year go by without addressing (energy) issues together in a comprehensive and balanced package." That quote was from 2001.
It just keep spewing
And yet we've now completed another weekend with oil gushing into the Gulf of Mexico at a prodigious rate, thanks to a rig explosion and fire that occurred as oil giant BP
Thus far, BP and its helpers have had little luck in stanching the massive oil flow, even while being leaned on by President Obama and the U.S. Coast Guard. Clearly the victims of this bumbling lack of success will be the citizens whose livelihood occurs along the Gulf coast, deepwater drilling off all U.S. shores, and the species of plants and animals that specifically call the Gulf home. That this is the first massive offshore drilling spill in U.S. waters since 1969 should be only mildly comforting to any of us.
Further -- and amazingly -- we still are operating without any semblance of the energy policy that not only President Bush called for a decade ago, but also President Carter decades before him.
Come on, Congress: Get a wiggle on!
Were bipartisan support to become at all possible in our Congress, what might a comprehensive U.S. energy policy look like? First, I trust that you'll agree that we must strive to markedly reduce our dependence on foreign oil, which is frequently shipped to us from unfriendly sources. That's a basic no-brainer, even considering that we probably will never completely satiate our thirst for black gold.
But in order to reduce our oil imports, at least two measures will be required: We’ll need to replace a portion of the reduced oil shipments into our country with a dependable and ideally cleaner-burning substitute. At the same time, we'll need to get serious about conservation -- such as through a faster rollout of hybrid and electric cars -- that will make the weaning process far easier.
Natural gas could be our savior
My vote for the first substitute fuel goes to natural gas, which has been increasingly found in a number of U.S. shale sites, including the Barnett Shale of Texas, the Haynesville of east Texas and Louisiana, and the Marcellus, which covers a massive amount of New York and Pennsylvania. While it wasn't long ago that the U.S. natural gas industry was looking for the day when we'd run low on the hydrocarbon, new technologies brought on by such producers as Devon
The promise of shale gas is hardly just a U.S. phenomenon. Indeed, it's likely that sources exist in such countries as Germany, Ukraine, Poland, Romania, and Sweden. However, there are those who contend that its technology can corrupt groundwater and that the same technology that makes its production possible is hardly inexpensive.
But with natural gas capable of being used as both a transportation fuel and a power generator, it could displace significant amounts of oil. Beyond that, with our own supplies of shale gas virtually at our fingertips, and since it's far cleaner-burning than coal, for instance, it's difficult to understand why demands for its increased usage haven't reached a crescendo in Washington.
Nuclear's new glow
Next comes nuclear energy, which the French have found to be efficient, safe, and clean, although costly during the plant construction stage. But even most Americans don't realize that we in the U.S. already have 104 nuclear reactors, providing one-fifth of our power. The result, according to Platts, the energy information unit of McGraw-Hill, is that 700 million metric tons of carbon dioxide are kept from our atmosphere each year.
The Bush administration provided $18.5 billion in tax credits and loan guarantees to the nuclear industry. The result was that Southern Company
In the meantime, coal, of which the U.S. has plenty, will likely remain our primary electrical source. The difficulty, of course, is its environmental impact, which can be reduced somewhat by a cleaning process, especially those now being born of new technologies.
Renewables not ready yet
And then, of course, there are the vaunted renewables, including solar and wind power. While the technology is intriguing and probably points to our ultimate energy future, as some note, renewables aren't ready for primetime yet. In fact, I'm willing to take that a step further and bet that my children won't ever receive a meaningful share of their electricity from renewable sources.
So, while the Gulf of Mexico spill is a horrible and inexcusable tragedy, in the absence of a realistic movement toward an energy policy, it appears that oil in abundance is here to stay, likely at escalating prices. My recommendation for Fools with a taste for energy investing continues to be close attention to ExxonMobil
Chesapeake Energy is a Motley Fool Inside Value pick. Southern is a Motley Fool Income Investor choice. The Fool owns shares of Chesapeake Energy, XTO Energy, and Devon Energy. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.
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