Energy Prob Solved

EconoPundit

How to achieve full energy independence in fifteen years...

Here's the EconoPundit national energy policy.



1. Impose an immediate and permanent oil import tax set on a sliding scale between $95/bbl and current world price. If world price is $70, the tax is $25/bbl. If world price sinks to $35, the tax automatically rises to $60/bbl.



This tax is permanent. Energy costs as seen by households and businesses will initially rise substantially but will quickly stabilize and won't fluctuate even one tiny bit from year to year. What now goes "up and down" is import tax revenue, not domestic energy costs. It is possible there are massive cost reductions in many if not all areas of production to be realized if energy costs are permanently and credibly stabilized.



2. Spend some of the new massive revenue on whatever redistribution is necessary to ease the transition to the new economy. Spend some of it on alternative energy and conservation. Spend some of it on lowering other taxes here and there. Heck, I don't care.



3. Spend the rest on speeding the development of domestic recoverable oil shale. James Perry, who provided this link, describes the situation as follows:



The largest known oil shale deposits in the world are in the Green River Formation, which covers portions of Colorado, Utah, and Wyoming. Estimates of the oil resource in place within the Green River Formation range from 1.5 to 1.8 trillion barrels. Not all resources in place are recoverable. For potentially recoverable oil shale resources, we roughly derive an upper bound of 1.1 trillion barrels of oil and a lower bound of about 500 billion barrels. For policy planning purposes, it is enough to know that any amount in this range is very high. For example, the midpoint in our estimate range, 800 billion barrels, is more than triple the proven oil reserves of Saudi Arabia.



At current rates of consumption these deposits would keep a U.S. petroleum-based economy going for another 100 years with no oil imports.