There seems to be an unquestioned assumption by environmentalists and their supporters in governments around the world that the hydrocarbon molecule is an energy source that should be relegated to the dustbin of history.
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Solar, hydroelectric, wind and other ‘clean and green’ energy sources are the wave of the future, environmentalists tell us.
US President Barack Obama has accepted the false premise that petroleum is an energy source whose time has passed.
In his proposed federal budget issued in February, President Obama called for US$ 44 billion in increased taxes over the next 10 years on companies that produce oil and on companies that use oil as a raw material to manufacture fuels and petrochemicals used in thousands of products.
President Obama said he wants to use revenue from these higher taxes to subsidise other forms of energy. Incorrectly labelling tax deductions for the producers of oil and the manufacturers of fuels and petrochemicals as ‘subsidies,’ the president said in his State of the Union address in January that ‘instead of subsidising yesterday’s energy, let’s invest in tomorrow’s.’
In fact, petroleum is the energy source of tomorrow as well as the present and past.
For more than 100 years, fuels manufactured from petroleum have powered vehicles in America and around the world. Today these include gasoline, diesel, jet fuel and other fuels, all safe, efficient, proven and reliable.
Refineries also manufacture home heating oil and other products from crude oil. Petrochemical plants manufacture the building blocks for thousands of vital products.
If the ‘alternate’ energy sources embraced by the critics of fossil fuels were as wonderful as their backers claim, we would all be using them today.
Historically, the best technology comes out the winner in a Darwinian ‘survival of the fittest’ in the free market. This is why the telephone replaced the telegraph, the car replaced the horse, the electric light replaced the whale oil and kerosene lamp, and the computer replaced the typewriter.
In all the above cases and many more, old technologies were not saddled with big new taxes and smothered in government regulations to raise their costs and make it difficult for them to stay in business. And government subsidies were not used to prop up the new technologies.
Plans to provide billions of dollars in subsidies to unproven, ineffective and unaffordable technologies that cannot survive on their own, while over taxing and over regulating the producers of petroleum and the manufacturers of gasoline, diesel and other fuels, are the wrong policy.
This policy would destroy jobs held by hard working men and women today in the hope of generating new jobs tomorrow. It would raise energy costs for consumers and businesses. And it would require tax increases to support continued energy subsidies.
Instead of condemning petroleum fuels as the causes of our energy problems, President Obama and leaders in other nations should embrace these fuels as the solution to our energy needs for many decades to come.
Instead of working to limit new exploration and production of oil in the US and off American shores, President Obama should be working to increase it, and to approve the Keystone XL pipeline that would increase oil imports from America’s neighbor and friend Canada.
Should non-hydrocarbon sources of energy be encouraged? Absolutely. If technology behind them improves, these sources of energy could play a bigger role in meeting the energy needs of America and the world in the future.
But taxpayers should not be expected to continue writing blank checks to developers of new sources of energy that cannot survive in the free market. When government tries to pick winners and losers among competing businesses, instead of letting the free market do the job, consumers and taxpayers wind up the biggest losers of all.