In the United States, fossil fuels account for 85% of the energy consumed. According to Nansen G. Saleri, roughly 61% of energy produced is wasted through poor insulation, inefficient autos, and inefficient power plants. What does that mean? It means that the U.S. had better formulate an energy strategy, and fast. As Mr. Saleri points out, the Obama administration’s energy strategy so far has been one of “ambivalence,” though there has been some dreaming thrown in about “green” energy.
In the upcoming issue of Intelligence Report, I deal with America’s energy situation at length. To make up for Libyan lost production, the Saudis are pumping an estimated 9.3 million barrels of oil a day, up from their average of 8 million barrels. According to estimates, Libyan oil production has dropped about 0.7 million barrels per day, so net production may have actually increased, although that wouldn’t be evident by the skyrocketing price of crude.
Saudi Arabia has another estimated 3.5 million barrels of spare capacity left, with another 1.2 million barrels of extra capacity throughout OPEC. So, one or two more small oil producing states could conceivably be displaced before world capacity is stretched to the limit (for example, Algeria produces around 2.1 million barrels of crude per day). But what happens if the unrest in the Middle East makes its way to Saudi Arabia itself? Global energy risk necessitates crafting a better domestic energy policy here in the U.S., the world’s largest consumer of energy.
The solution is not that difficult, but political self-interest has, for decades, compromised American energy security. The current administration is the most hapless yet, as not a single soul among its ranks of economists has a shred of business experience. What was America thinking by installing into the White House a poorly prepared president who, upon his inauguration had accomplished absolutely nothing in his life that would have allowed anyone to think him qualified to be president?
Given the current situation in the Middle East, the administration’s hemming and hawing on drilling in the Gulf of Mexico has long outlived its usefulness. Every day, dollars are sent abroad to nations where autocrats and monarchs rule with iron fists and hand out money to terrorist organizations for purposes of inciting war against the U.S. Tomorrow, Congressman Pete King from New York will be chairing hearings on “The Extent of Radicalization in the American Muslim Community and that Community’s Response.” America needs to focus on how its energy dollars are being spent and who will ultimately end up with those dollars. At home and abroad, America is threatened by radical Islamic terrorism. The most recent attack on soldiers in Germany is evidence of the reach and determination of America’s enemies.
Setting a national energy policy that encourages domestic production and consumption of domestic fuels should be a priority for the next administration. The Tea Party needs to press hard for such a plan. At this point, there can be no reliance upon the current administration to develop a coherent plan for American energy.