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A Step Forward or Two Steps Backwards? – Part II

Saturday, April 3rd, 2010

By: Don Bates Jr.

In my previous post, I mentioned my concern over the President’s disingenuous approach to energy policy and national energy self-sufficiency. Thankfully, the President’s path is not the only path available to us. One of the most important options that we should pursue, and that we are not pursuing now, is the development and production of coal-to-liquid fuels. In a state like Indiana where coal is abundant and the need for job creation exists, a coal-to-liquid fuel industry would help move our country towards energy independence, create lower gas and diesel prices for consumers, and generate more jobs for Hoosier workers.

Coal-to-liquid fuel has been successfully produced and used by other countries, yet our nation has never needed to pursue it as an alternative to petroleum because of the abundance of relatively cheap, imported oil. The days of cheap, imported oil are over, and that leaves us with a choice between the development of every resource that we have, from oil, natural gas, coal-to-liquid, to other biomass-type fuels, or a continued reliance on unreliable, costly petroleum imports that frequently come from unstable regions and regimes around the globe.

Indiana is one of the top ten states in the country for coal reserves with more than 18 billion tons of recoverable coal yet to be mined. Over 3,000 Hoosiers work in the coal industry and in 2008 they mined over 35 million tons of coal. If coal-to-liquid fuels were to become part of our national strategy for energy self-sufficiency, jobs would be created in the building and operating of new plants that could turn the raw coal into the liquid fuels of gasoline, diesel, and jet fuel. Additionally, our entire economy would benefit by being close to the production of this alternative fuel that is potentially more cost-effective that refined petroleum fuels.

What the next senator from Indiana needs to do is work to reduce regulatory barriers that stand in the way of the development of this exciting technology. The Department of Defense and other federal agencies need to be allowed to enter into contracts for the purchase of coal-to-liquid fuels, companies that want to build the refining and conversion facilities must be allowed to accelerate the tax-depreciation of their new facilities, and investors across the board must be given a lower capital gains tax. The last policy would benefit every kind of investment, and emerging technology and industry sectors such as coal-to-liquid would stand to be among the greatest beneficiaries of such a plan.

Hoosiers are hardworking pioneers, and I am ready see Indiana lead the way towards energy self-sufficiency. It can be done. We have the resources, we have the ability to develop the technology, and we have the work-ethic necessary to push forward and lead our country into the future in energy policy. Let’s get to work!

A Step Forward or Two Steps Backward? – Part I

Friday, April 2nd, 2010

By: Don Bates Jr.

The President created a stir among the environmental left this week when he announced the opening of certain coastal areas to off-shore oil exploration.  Proponents of stringent regulations banning, or severely limiting, the development of off-shore and other forms of domestic oil and natural gas production are expressing deep frustration that the President who expressed support for their position on the campaign trail has seemingly turned on them. Meanwhile, some who have been promoting the idea of national energy independence, in part by way of domestic oil exploration, are wondering if the President has moved us one step forward in the right direction.

While I would like for the President to abandon the politics of environmental alarmism and embrace the common-sense solution of allowing environmentally responsible domestic energy resource development, I am not happy with this latest policy move by the Administration. Strong and vibrant on its surface, this plan will not do enough for our needs, and it may end up do nothing at all.

Nearly two summers ago Americans saw an already struggling economy get socked with high energy prices, particularly gasoline prices. This energy price increase compounded a growing problem, and American industry, agriculture, and families suffered. When the economy slowed down still further, and as workers lost their jobs, energy prices began to come down. However, our nation is still in need of an energy independence policy that embraces domestic energy development as a means of assisting the economy, creating jobs, and strengthening our national security.

President Obama’s plan gives the green light to exploration in limited coastal areas, but it does not give a green light to actually producing oil and natural gas from wells in those areas. Unannounced to the American public, the Administration has recently closed areas in Alaska that would have been ready for full production of oil and natural gas within two years. These areas were much closer to coming on line and helping to meet the energy needs of our country than the areas that were just opened for exploration. It takes years, sometimes decades, for exploration to turn into production. Opening up areas for exploration while shutting down areas that are close to being ready for production, is not serious energy policy, it is serious Washington politics.