The Costanza Energy Policy: 25 Ways to Drive Oil to $150

On last night's Kudlow & Co., I discussed how absurd US energy policy is.

The United States is heavily  dependent on fossil fuels (>80%), most of which come from places we would rather not send our money to. We consume 26% of the world's energy, with only 3% of the world's known oil reserves.

It turns out that for the past 3 decades, we've had a George Costanza Energy policy -- every decision we have made as a country has worked to drive energy prices higher. Had we made the opposite decisions, Crude Oil prices would be much lower than they are today ($130.17 as I type this).   

What follows is a list of energy-related policies of the United States. On many of these, I have no opinion -- but I wanted to list as many as I could to demonstrate why Oil is where it is

US Policies with an impact on Energy:   

1. Limited areas available for offshore drilling;

2. Stopped the rise of CAFE standards for automobiles;

3. Restricted nuclear power generation of Electrical;

4. Federal Reserve policies since 2001 led to a very weak US dollar (raising Oil prices);

5. Energy conservation policies? None

6. Iraq and Afghanistan wars contributing to Middle East tensions

7. No major United States funding for R&D on energy;

8. Kept CAFE standards for light trucks/SUVs much lower than autos;

9. Failed to raise efficiency standards for appliances for decades;

10. Provided no tax incentives for consumer purchases of hybrid automobiles;

11. Suburban Sprawl: Americans, on average, live further from where they work than Europeans do;

12. Mass transit system not a high priority;

13. Allowed tax credits for residential solar power to expire;

14. No special capital gains treatment for VC alt.energy investment

15. Ridiculous corn ethanol policy helped drive food prices higher also;

16. Amongst the lowest gasoline taxes in the developed world;

17. No special capital gains tax treatment for clean energy technology development;

18. Created a tax incentive (ADCS) that encouraged purchases of large inefficient vehicles;

19. Game changing breakthroughs over the past decades in solar, battery, or energy generation technologies? None

20. Exempted light trucks, SUVs, and pickups from gas-guzzler tax;

21. Discouraged clean coal, including gas liquification from coal;

22. Limited (or non-existent) state tax incentives for building energy efficient homes;

23. Failed to aggressively promote compact fluorescent light bulb;

24. Limited hydro-electric power generation;

25. Aggressive tax incentives for battery technology development? None

26. Failed to aggressively promote efficiency improvements for residential energy use, transmission of power, or consumption;

27. No new oil refineries built in the USA over the past 25 years.

 

And that's just off the top of my head.

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