ENERGY POLICY

Energy policy is one that seems so simple to the common man but is filled with years of bowing to powerful special interest groups. It is commonly agreed that we do not desire to be hostage to foreign entities for our basic energy supplies and likewise we do want low cost and low environmental impact. The key to getting an energy policy that makes sense is to admit that we must get the special interests out of the ball game and provide a level playing field for those energy sources that can best provide for both of our needs.

The first step is to develop an environmental policy like the one described previously. This would let consumers of energy understand the true cost of energy and its life cycle impact on our planet. The second step is to put a tax on foreign energy that would fund the development of local energy supplies. I believe that a BTU tax (since this allows us to compare different types of energy) tied directly to the importation of foreign energy would be used to fund direct investment tax credits for new domestic supplies of energy.

For example, if we taxed imported oil and used that to finance an Energy Fund (similar to the Highway Trust Fund) that could provide credits to domestic suppliers of energy; we would only finance the fund as long as we continued to import oil. As our imports diminished we naturally need less subsidy of domestic production and thus collect less tax revenue. Further, if we successfully develop new technologies like clean coal, then we can start exporting those technologies to other countries.

Likewise, as we pass these higher costs on to consumers of energy, they would have an economic incentive to move to locally produced energy sources. Further, conservation would be promoted since that would not incur any new energy requirements, but also those credits could be sold for avoiding consumption. This creation of new trading credits puts money directly in the pocket of the consumer allowing him to benefit from his own energy (and pollution) saving activities.

The question of how to direct the Energy Fund investments should be determined by those potential energy sources with the lowest direct impact on society. For example, direct conversion of sunlight to electricity through photovoltaic cells only hurts the society to the degree that the product manufacturing process has an impact. The energy produced releases no new pollutants. Thus this would be a favored technology versus improvements in conventional coal fired boiler technology. Direct conversion of solar produced electricity to hydrogen would be a natural since there is no environmental impact in either the conversion or distribution of energy.

Further, this fund could promote those infrastructure changes that would be needed to move society to lower impact technologies. We could fund the development of hydrogen burning buses and thus create the initial refueling infrastructure in a city for hydrogen distribution. We could add inner city trucks and other local transportation until we had developed an infrastructure that was low impact to our energy and environmental concerns.