Colorado’s ‘no energy’ economy

by | Jul 13, 2008 | Capitol Review, Notes | 1 comment

As if paying $4-plus for gasoline isn’t bad enough, some of Colorado’s political leaders seem bound and determined to spread pain at the pump to the cost of heating our homes this winter — and for decades to come.

Ours is a beautiful state with an abundance of natural resources: silver and gold lured early pioneers, mountain vistas and ski slopes keep visitors coming year after year, and abundant energy sources fuel our economy and our way of life.

Not long ago, political leaders of both parties understood that the energy sector is vital to the economic health of our state and actively worked to utilize those resources while applying responsible protections for the environment.

Unfortunately, energy has now become a political football. Republicans play the traditional role of advancing affordable energy development, while Democrats try to freeze traditional energy sources to make alternative energy economically competitive.

According to Fortune, our junior senator, Ken Salazar, “has emerged as the Senate’s leading oil shale opponent,” fighting for a moratorium against further development.  Never mind that Shell invested millions in oil shale research: “Salazar’s efforts have essentially pulled the rug out from under (it).”

Oil shale reserves in the Green River Formation, which underlies parts of Colorado, Utah and Wyoming, are staggering.  A Rand Corporation study calls it the largest known oil shale deposit in the world with 1.5 to 1.8 trillion barrels of crude oil.

Nearly half of those deposits — 800 billion barrels, triple the known crude reserves in Saudi Arabia — are recoverable using existing technology, if only Salazar and company would get out of the way.

With gas prices soaring, Salazar’s wannabe senate sidekick, Boulder congressman Mark Udall, called a news conference last month to tell Colorado families that high gasoline prices aren’t going away so we need to be more fuel efficient.

File that inspirational note next to Jimmy Carter’s fireside chats about economic “malaise.”

Udall’s plan to do something about soaring gas prices is a confounding concoction combining economic illiteracy and wishful thinking:

Crack down on price-gouging. Straight from the far-left playbook of MoveOn.org, liberals rant against price-gouging, fully aware that evidence of actual price-gouging is scarce as hen’s teeth.

Stop “subsidizing” the oil and gas industry. Udall wants to eliminate tax credits that U.S. oil companies receive for taxes paid to foreign governments, and he would eliminate a tax deduction for domestic production.  This amounts to penalizing American companies when they bring their overseas profits back home and for creating jobs to produce oil in the U.S.

Move away from corn to cellulosic ethanol. Ethanol mandates contribute to price distortions, but the technology for turning corn into fuel is years ahead of research on switchgrass.  The lesson from our ethanol experience should be that politicians are ill-equipped to predict where technology  and economics will converge.

Udall boasts of his sponsorship of a bill to allow U.S. companies to engage in exploration off the coast of Cuba, but his bill is mere window dressing. In nearly a year since its introduction in the Democrat-controlled Congress, Udall’s bill hasn’t even been scheduled for a hearing.

To make matters worse, Udall and Salazar team up with Gov. Bill Ritter to stonewall against responsible energy development on the Roan Plateau. Meanwhile, Ritter still expects the energy industry to provide more tax revenue.

Roan Plateau contains an estimated 9 trillion cubic feet of natural gas — enough to heat every home in Colorado for 20 years.  Bureau of Land Management would allow drilling on no more than 1 percent of the plateau’s surface at any time.

Yet Salazar, Udall and Ritter want to stall the process (which began in 1997 under President Clinton), impose even more restrictions, and then tell the bidders where to drill first.  If any of the three knew so much about energy exploration, he could be making a fortune as a geologist.

Say what you will about oil and gas producers, but remember that they don’t get paid if they don’t produce.  If Salazar, Udall and Ritter get their way, Coloradans will be sitting atop vast oil and gas reserves but sending our money to the likes of OPEC and Hugo Chavez.

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