Independent Women's Forum - Research Areas > Energy (In General)

New IWF Fact Sheets

info@iwf.org (Allison Kasic) — Thu, 17 Jul 2008 17:05:00 EDT

Check out the campus resources page to get the 411 on:

Energy prices

Sexual harassment policies on campus

How school choice benefits families

The living wage

Get the Facts: Energy Prices

Thu, 17 Jul 2008 10:46:00 EDT

Download the IWF Energy Prices Fact Sheet below.

As the average price of gas climbs higher than ever before, Americans feel increased economic pressure while waiting for prices to come back down. Unfortunately, the options being discussed by the Majority in Congress will only serve to make the situation worse. Nationalizing the oil industry or raising taxes on oil companies will not encourage a decline in prices and might drive them up even further. Greater government regulation or intervention in the energy industry is not the solution. Allowing the market to operate without needless intervention in order to increase energy supply is.

Why are gas prices higher than ever before?

In June 2008 average gas prices hit a historical high in the U.S., exceeding $4/gallon.
Similarly, the cost of crude oil has hit record highs exceeding $125/barrel.
Global demand for crude oil, the primary determinant of gas price, has risen dramatically over the last decade as countries like China and India continue to develop. For example, China's demand has increased by more than 730 million barrels/year in the last five years. This increased demand for oil is typical of a country as its economy grows and expands into a highly developed nation.
Global supply of crude oil has not risen in proportion to the increase in demand. Since 2006, the average daily demand for barrels of oil has exceeded the average supply.

The rise in crude oil and gas prices may be reversed with an increase in oil production.

Because other oil producing countries have been unwilling to increase production, the U.S. must focus on developing its own natural resources.
- Saudi Arabia, the world's number one oil producer, has consistently resisted U.S. calls for a substantial increase in production. From 2006 to 2007, OPEC reduced its yearly production of crude oil by almost 160 million barrels.
- Congress has passed legislation banning the drilling of many oil rich areas in the U.S.
  - The Arctic National Wildlife Refuge and adjacent State waters are estimated to hold an average of 10.4 billion barrels of oil, possibly the largest oil field in the northern hemisphere. The Senate has consistently passed legislation blocking its development.
  - The Federal Outer Continental Shelf is estimated to contain an average of 86 billion barrels of oil. However, 85% of the shelf's 1.76 billion acres is off-limits and 97% is undeveloped.
  - Shale oil reserves in the Green River Formation hold an estimated 800 billion gallons of recoverable oil, more than three times the proven amount of oil in Saudi Arabia. The 2005 Energy Act called for the development of technologies to extract shale oil, however a Congressional moratoria on the leasing of shale-oil land has halted this effort.

While alternative sources of energy are likely to have an important role to play in our future energy markets, Congress needs to reverse the destructive policies that prevent the exploration and refining of fossil fuels in order to increase domestic supply of energy.

Information taken from the U.S. Geological Survey (www.usgs.gov), the Energy Information Administration (www.eia.doe.gov), and GovTrack.us.

Get the Facts: Cap and Trade

info@iwf.org (Allison Kasic) — Tue, 08 Jul 2008 09:16:00 EDT

Attention students (and anyone else who enjoys succinct info on important policy matters): check out the latest fact sheet over at IWF's Campus Resources page for all the need-to-know information on cap and trade.

Get the Facts: Cap and Trade

Mon, 07 Jul 2008 11:51:00 EDT

Download the IWF Cap Trade Fact Sheet below.

Although advocates describe "cap and trade" as a free market approach to environmentalism, in many ways it is worse than a tax. In addition to imposing costs on businesses which will be passed on to consumers, a cap-and-trade system is wrought with unintended consequences. This type of system can significantly impede economic growth, as it decreases the number of available jobs and average gross domestic profit.

Pointing Fingers Won't Bring Gas Prices Down

info@iwf.org (Allison Kasic) — Mon, 30 Jun 2008 12:36:00 EDT

In an editorial today, the Wall Street Journal dispels the myth that oil companies are stock piling leases on federal lands to drive up gas prices. Check it out here.

In Case You Missed It

info@iwf.org (Allison Kasic) — Thu, 26 Jun 2008 13:40:00 EDT

Over the weekend, IWF visiting fellow Donna Wiesner had an article in the Washington Times looking at gas prices. Donna urges policymakers to get beyond finger pointing and look at the factors that actually affect energy prices. Read her article here.

Meanwhile, over at the New York Daily News, IWF's Carrie Lukas examines a recent case of political pandering to women (Obama calling for "equal pay"). Read her article here.

Energy Futures

info@iwf.org (Allison Kasic) — Tue, 24 Jun 2008 13:28:00 EDT

The Wall Street Journal has a good editorial today, dispelling some myths surrounding the energy futures market, which seems to be the new scapegoat for high oil prices:

The futures market may be a convenient scapegoat, but it's simply a price discovery mechanism. Major energy consumers - refiners, airlines - buy and sell these contracts to lock in goods at a future price, as a hedge against volatility. Essentially, they're guesses about coming oil supply and demand, as well as the rate of inflation. The political theory is that such futures trading is creating a bubble in the spot market (i.e., oil purchased for immediate delivery) beyond oil fundamentals. Thus, $4 gas.

But there's no inherent reason to "bet" that commodities will go up rather than down. Bet wrong - place all your chips on red, say - and you lose. If a company purchases the future right to buy oil at $140 a barrel and it instead sells for $130, the option is worthless. Besides, somebody has to take the other side of any futures contract: Some are trying to predict where the price will go in the future, while the other side is attempting to sell its future price risk. But no one knows how things will end up.

More here.

GMU Economists on Energy Prices

info@iwf.org (Allison Kasic) — Fri, 20 Jun 2008 10:06:00 EDT

The latest podcast of EconTalk features an interesting discussion between George Mason University economics professors Russ Roberts and Don Boudreaux on energy prices.

Give it a listen here.

Carrie Lukas on Gas Prices

info@iwf.org (Allison Kasic) — Wed, 18 Jun 2008 11:48:00 EDT

Over at Townhall.com, IWF's Carrie Lukas urges Congress to stop promoting big-government "solutions" to high gas prices that, in reality, will only drive prices higher. The big-government urge of many Members of Congress is exemplified by this recent exchange:

A headline-making exchange between Representative Maxine Waters and John Hofmeister, president of Shell Oil Company is just the latest and most egregious example. During questioning, Rep. Waters asked the oil executive to "guarantee" that the price of oil will go down if oil companies are granted authority to drill off U.S. shores. When Mr. Hofmeister failed to offer such a guarantee, Representative Waters issued a threat: "And guess what this liberal would be all about? This liberal would be all about socialize...basically taking over and the government running all of your companies."

It's a breathtaking moment of honesty from a member of Congress. So much for concerns about the limits of government authority; so much for respect for private property and free enterprise. Rep. Waters shares the worldview of most of the world's dictators: if industry can't produce the desired results, then government should simply seize their property.

Beyond the totalitarian impulse, the exchange reveals Ms. Waters's ignorance about the role prices play in the economy. In a free market, prices help ensure that supply meets demand. The demand for energy has been growing, not just here in the United States but around the world. Unless supply keeps pace with demand, prices must rise. Rising prices send important signals to both consumers and producers: high prices offer producers an incentive to invest in producing more supply, while consumers are encouraged to buy only what is necessary, preventing shortages. The oil executive cannot promise that the prices will be lower in the future because he cannot know exactly how much demand will increase compared to supply.

Rep. Waters may think that if the federal government seized control of the energy industry, prices would fall, but she'd quickly learn (as did the Soviet bloc) that the laws of supply and demand are tough to escape.

More here.

Biofuels Backlash

info@iwf.org (Allison Kasic) — Mon, 16 Jun 2008 10:50:00 EDT

In the Wall Street Journal, Peter Brabeck-Letmathe weighs in on the role of biofuels in the world's agricultural and water troubles:

The world's agriculture and water crisis is only going to get worse. As China and India grow, their populations are demanding more and wider varieties of food stuffs, and competition for arable land is intensifying. Food prices are rising, in large part because agriculture suppliers can barely keep up with today's demand. So what is the world doing? Reorienting land away from food production and toward plants cultivated for energy needs.

This could be the single most destructive set of policy mistakes made in a generation. From time immemorial, mankind has struggled to produce enough food. Wars have been fought over arable land. Whole populations have been forced to migrate, and untold millions of human beings have died because circumstances, climate, war or political ineptitude have deprived them of what the German language describes as "Lebensmittel," or a "means for survival." This problem hasn't disappeared; our world today needs to feed some six billion people. According to some projections, that number will rise to nine billion by 2050.

More here.

What Is ANWR like?

info@iwf.org (Allison Kasic) — Fri, 13 Jun 2008 16:00:00 EDT

With all the debate over domestic drilling recently, Jonah Goldberg takes a look at ANWR. Is it really as pristine as it's cracked up to be? Goldberg thinks no:

ANWR is roughly the size of South Carolina, and it is spectacular. However, the area where, according to Department of Interior estimates, some 5.7 billion to 16 billion barrels of recoverable oil reside is much smaller and not necessarily as awe-inspiring. It would amount to the size of Dulles airport.

...
Most of the images of the proposed drilling area that people see on the evening news are misleading precisely because they tend to show the glorious parts of ANWR, even though that's not where the drilling would take place. Even when they position their cameras in the right location, producers tend to point them in the wrong direction. They point them south, toward the Brooks mountain range, rather than north, across the coastal plain where the drilling would be.

More here.

Another Good One from the WSJ

info@iwf.org (Allison Kasic) — Fri, 13 Jun 2008 09:30:00 EDT

The Wall Street Journal weighs in on the oil debate with this great editorial:

Anyone wondering why U.S. energy policy is so dysfunctional need only review Congress's recent antics. Members have debated ideas ranging from suing OPEC to the Senate's carbon tax-and-regulation monstrosity, to a windfall profits tax on oil companies, to new punishments for "price gouging" - everything except expanding domestic energy supplies.

Amid $135 oil, it ought to be an easy, bipartisan victory to lift the political restrictions on energy exploration and production. Record-high fuel costs are hitting consumers and business like a huge tax increase. Yet the U.S. remains one of the only countries in the world that chooses as a matter of policy to lock up its natural resources. The Chinese think we're insane and self-destructive, while the Saudis laugh all the way to the bank.

More here.

Cartoon of the Day

info@iwf.org (Allison Kasic) — Thu, 12 Jun 2008 09:40:00 EDT

The Chilling Effect points to this great political cartoon about gas prices.

More on Energy Supply

info@iwf.org (Allison Kasic) — Thu, 12 Jun 2008 09:37:00 EDT

Earlier in the week, Larry Kudlow called for more drilling. Now, Amanda Carpenter shows where to do it.

Support for Drilling

info@iwf.org (Allison Kasic) — Wed, 11 Jun 2008 08:11:00 EDT

Yesterday Larry Kudlow pointed to some revealing polling numbers dealing with oil:

Recent polling data from Gallup show the percentage of voters blaming oil companies for skyrocketing gasoline prices has dropped from 34 percent to 20 percent over the past year. At the same time, support for more drilling in U.S. coastal and wilderness areas has increased to 57 percent from 41 percent.

Unfortunately, many politicians continue to look to cap-and-trade as a false solution:

The public wants more energy and more fuel to cut high prices and spur economic growth. But the costly cap-and-trade plan would produce less fuel and less growth. It would only raise gas pump prices while mounting a Gosplan-type taxing, spending, and regulating program that would be the moral equivalent of Hillarycare on nationalized medicine.

More here.

Education Goes Green

info@iwf.org (Allison Kasic) — Fri, 06 Jun 2008 10:51:00 EDT

Over at National Review Online, Dan Lips points out the misguided priorities of many politicians when it comes to education:

Every 26 seconds, a student drops out of high school in the United States. National test scores reveal that half of all low-income fourth graders cannot read. Given such alarming statistics, you'd think that helping at-risk kids would be the top education-related priority on Capitol Hill.

Apparently not. As far as Congress is concerned, the real problem with public education in America is that it's not environmentally friendly enough.

Details here.

George Will on Cap and Trade

info@iwf.org (Allison Kasic) — Wed, 04 Jun 2008 11:35:00 EDT

George Will had a fabulous article on cap and trade over the weekend in the Washington Post. It's worth reading in its entirety here. Will does a good job in laying out the government's profit motive under a cap and trade system:

Speaking of endless troubles, "cap-and-trade" comes cloaked in reassuring rhetoric about the government merely creating a market, but government actually would create a scarcity so that government could sell what it had made scarce. The Wall Street Journal underestimates cap-and-trade's perniciousness when it says the scheme would create a new right ("allowances") to produce carbon dioxide and would put a price on the right. Actually, because freedom is the silence of the law, that right has always existed in the absence of prohibitions. With cap-and-trade, government would create a right for itself-- an extraordinarily lucrative right to ration Americans' exercise of their traditional rights.

Businesses with unused emission allowances could sell their surpluses to businesses that exceed their allowances. The more expensive and constraining the allowances, the more money government would gain.

Another aspect of cap and trade that's easy to forget about is foreign companies. As Will points out, the cap and trade structure is extremely protectionist in this regard:

Lieberman's legislation also would create a Carbon Market Efficiency Board empowered to "provide allowances and alter demands" in response to "an impact that is much more onerous" than expected. And Lieberman says that if a foreign company selling a product in America "enjoys a price advantage over an American competitor" because the American firm has had to comply with the cap-and-trade regime, "we will impose a fee" on the foreign company "to equalize the price." Protectionism-masquerading-as -environmentalism will thicken the unsavory entanglement of commercial life and political life.

Ecoindoctrination

info@iwf.org (Allison Kasic) — Wed, 04 Jun 2008 09:11:00 EDT

Naomi Schaefer Riley shares some interesting news on the subject in the Wall Street Journal:

If you have spent any time on a college campus recently, you will realize that "sustainability" is the academy's favorite new buzzword. There's the Association for the Advancement of Sustainability in Higher Education (AASHE); a Sustainable Endowments Institute that publishes a College Sustainability Report Card; an Ivy Plus Sustainability Working Group, and another one for colleges in the Northeast. There are sustainability offices and officers at dozens of schools nationwide.

People unfamiliar with this subject might think that sustainability is just a fancy-sounding term for a smattering of environmentally friendly campus activities. But while it's true that the word does encompass recycling and higher-efficiency light bulbs, college administrations in recent years have started to give the term a more dramatic meaning.

...

The sustainability folks have a much bigger agenda. As Mr. Bodner explains: "Sustainability, broadly speaking, is creating the ability for people to live on a planet that can support the population in an environmental way but also ultimately a way that promotes the good life for everyone, for social justice." And Kathleen Kerr, the head of residence life at the University of Delaware, told a gathering of college administrators last fall that the idea that "sustainability is mostly about the environment" is a "myth." In fact, she and a colleague offered a PowerPoint presentation listing other items that administrators might consider in this category. They included "Fair Trade," "Gender Equity," "Affirmative Action," "Multicultural Competence," "Worker's Rights" and "Domestic Partnerships."

More here.

A New Consensus

info@iwf.org (Carrie L. Lukas) — Tue, 03 Jun 2008 09:07:00 EDT

It seems hard to find anyone with anything good to say about the cap-and-trade legislation currently being considered in the Senate. There is plenty of criticism, but I think that Senator Inhofe, writing in todays WSJ, summarizes some of the bill's ploblems best:

With average gas prices across the country approaching $4 a gallon, it may be hard to believe, but the U.S. Senate is considering legislation this week that will further drive up the cost at the pump.

The Senate is debating a global warming bill that will create the largest expansion of the federal government since FDR's New Deal, complete with a brand new, unelected bureaucracy. The Lieberman-Warner bill (America's Climate Security Act) represents the largest tax increase in U.S. history and the biggest pork bill ever contemplated with trillions of dollars in giveaways. Well-heeled lobbyists are already plotting how to divide up the federal largesse. The handouts offered by the sponsors of this bill come straight from the pockets of families and workers in the form of lost jobs, higher gas, power and heating bills, and more expensive consumer goods.
[We Don't Need a Climate Tax on the Poor]
Corbis

Various analyses show that Lieberman-Warner would result in higher prices at the gas pump, between 41 cents and $1 per gallon by 2030. The Congressional Budget Office (CBO) says Lieberman-Warner would effectively raise taxes on Americans by more than $1 trillion over the next 10 years. The federal Energy Information Administration says the bill would result in a 9.5% drop in manufacturing output and higher energy costs.

Oh, and it would have no meaningful effect on the environment of course. Couldn't Memorial Day recess have lasted a little longer?

Morning Reading

info@iwf.org (Allison Kasic) — Mon, 02 Jun 2008 11:49:00 EDT

Václav Klaus, the President of the Czech Republic, was in Washington last week to talk about his book, Blue Planet in Green Shackles. His remarks are available here.

I don't think I'm the only one

info@iwf.org (Allison Kasic) — Fri, 30 May 2008 09:48:00 EDT

who would like to see this debate happen.

You're Killing Me, Smalls

info@iwf.org (Allison Kasic) — Thu, 29 May 2008 13:36:00 EDT

Over at Marginal Revolution, Tyler Cowen points to an article that claims movie tickets will skyrocket by upwards of 30% this year because ethanol subsidies have pushed up the price of corn.

"[T]he most extensive government reorganization of the American economy since the 1930s."

info@iwf.org (Allison Kasic) — Tue, 27 May 2008 12:13:00 EDT

That's how the Wall Street Journal describes the Warner-Lieberman cap-and-trade bill before the Senate this week. Doesn't sound too rosy, does it? We've highlighted the immense projected costs of the bill here on Inkwell. So, why would politicians support a policy with such staggering costs? The WSJ does a good job of laying out the motives:

And for the most part, the politicians favor cap and trade because it is an indirect tax. A direct tax - say, on gasoline - would be far more transparent, but it would also be unpopular. Cap and trade is a tax imposed on business, disguising the true costs and thus making it more politically palatable. In reality, firms will merely pass on these costs to customers, and ultimately down the energy chain to all Americans. Higher prices are what are supposed to motivate the investments and behavioral changes required to use less carbon.

The other reason politicians like cap and trade is because it gives them a cut of the action and the ability to pick winners and losers. Some of the allowances would be given away, at least at the start, while the rest would be auctioned off, with the share of auctions increasing over time. This is a giant revenue grab. The Congressional Budget Office estimates that these auctions would net $304 billion by 2013 and $1.19 trillion over the next decade. Since the government controls the number and distribution of allowances, it is also handing itself the political right to influence the price of every good and service in the economy.

More here.

Hat tip: The Chilling Effect

Increasing Domestic Oil Supply

info@iwf.org (Allison Kasic) — Fri, 23 May 2008 11:51:00 EDT

A step in the right direction.

Background on the Polar Bear Debate

info@iwf.org (Allison Kasic) — Wed, 21 May 2008 09:04:00 EDT

Last week, the Fish and Wildlife Service designated the polar bear as a threatened species under the Endangered Species Act (ESA). Over at NRO, Jonathan Adler provides some interesting background on the polar bear debate:

The polar-bear listing was initiated by a petition from the Center for Biological Diversity (CBD), an environmentalist group that aggressively seeks greater regulation for species conservation in federal courts. When the federal government failed to act, CBD and other groups filed suit, prompting a court order mandating a decision on whether to list the bear. CBD hopes to use the listing to limit energy development in Alaska and force restrictions on greenhouse-gas emissions from federally permitted facilities. The group tried a similar gambit before with the listing of some coral species, but this time they may have hit upon a winner.

More here.