After surviving steep winter utility bills, Iowans are braced for more belt-tightening as the hot summer months approach with no relief in sight from sky-high energy prices and threats of looming black-outs. Meanwhile, climbing prices at the pump fuel calls for action from the nation’s political system and private industry.
All the while it has become increasingly clear the nation’s energy woes aren’t going to be solved with the flip of a switch. Faced with another energy crunch, Americans at large are experiencing in their daily lives what farmers have known for generations. It’s as certain as the sun rising in the East. The cyclical highs and lows of a raw commodity — from cattle, to corn and crude — hinges on market supply and demand. In this case, surging consumer and industrial demand are outstripping our national energy system that is far too dependent on foreign crude.
The nation's fast-growth economy has placed an insatiable demand on limited energy supplies and behind-the-times refining capacity. According to the Energy Information Administration of the U.S. Department of Energy, the United States is the world's leading consumer and net importer of energy. Last year, the U.S. consumed about 19.5 million barrels of oil a day. Producing roughly 8 million barrels a day domestically forced the U.S. to import an estimated 11.1 million barrels per day last year, representing 57 percent of total U.S. demand. We're importing energy at unsustainable levels. With today's rising prices, it's painfully clear that we're in the middle of another boom-and-bust cycle and consumers are getting the short end of the stick.
We’ve been down this road before. Iowans will recall the energy shortages and ration lines of the 1970s. What’s needed today is a national strategy that will help smooth out the current cycle and achieve the country’s long-term energy needs once and for all.
Public policy ought to: promote renewable domestic production that burns clean energy, including soy diesel, ethanol, biomass, solar and wind energy; emphasize conservation and efficiency among U.S. households, schools and businesses; accelerate 21st century technologies that will spare limited resources and the environment, including energy-efficient appliances, cleaner-burning coal plants, alternatively-powered vehicles and mass transit; and invest in the nation’s energy supply chain, from boosting domestic production to beefing up our oil refining, electricity generating and natural gas distributing systems.
The Bush administration in May issued a comprehensive plan to address the nation’s energy crunch. The proposal sticks to key principles that promote energy efficiency, affordability, and reliability. And it keeps within the context of protecting the environment.
For years I have worked to decrease our reliance on foreign sources of energy and accelerate and diversify domestic energy production. As the leading Republican of the Senate Finance Committee, I fully support the $10 billion of tax incentives recommended by the administration that promote renewable and alternative sources of energy and conservation initiatives.
I am pleased the president is recommending to fund ethanol research and continue federal ethanol incentives. His visit to a Nevada, Iowa biomass facility in May underscored his support for renewable energy and Iowa’s potential to reap the rewards of its natural resources. Iowa can help lessen the Persian Gulf’s grip over U.S. foreign policy and our national economy by becoming a domestic energy giant in its own right. The Hawkeye state has the capacity to emerge as a leading "green" energy exporter by producing and processing clean-burning ethanol and soy diesel, harnessing wind energy and generating electricity with renewable biomass.
By cultivating homegrown resources, placing more emphasis on conservation through tax incentives and public education and investing in our domestic energy infrastructure, we have an opportunity to cushion harsh prices caused by the inevitable swings of the volatile petroleum market. Smart public policy can serve as a circuit-breaker to protect against the boom- and-bust cycles inherent to the energy market.