Ryan calls for moving toward a more coherent energy policy

Corporate Report Wisconsin, Jun 2008 by Warde, Bob

Last month, Wisconsin's First District Congressman, Paul Ryan, had some harsh words for our nation's lack of a comprehensive energy policy. In an op-ed piece circulated to state media outlets, Ryan wrote, "As the political finger pointing begins in Washington, D.C., Congress would serve itself well by looking in the mirror. Traveling around Wisconsin's 1st Congressional District, I routinely hear about how high gas prices are reducing people's paychecks. These layoffs [at the GM Plant in Janesville] are a devastating blow to our town and a harsh reminder of the consequences of our incoherent national energy policy." He went on to list a five-point plan he says will help lead to a more effective energy policy for the U.S.

One: Drill for oil - Members of Congress should pursue initiatives that would boost supply here at home, particularly in Alaska and outer continental shelf. For example, the U.S. Energy Information Administration has reported that more than 10.4 billion barrels of oil could be recovered from beneath the Arctic National Wildlife Refuge (ANWR). Technological advancements, such as directional drilling, would allow for responsible exploration and leave a minimal environmental footprint, affecting only 2,000 acres (out of ANWR's nearly 20 million acres).

Two: Build more refineries - In the past three decades, there has not been a single refinery built in the U.S. As a result, we have relied on an increasingly larger share of imported refined product. The Refinery Permit Process Schedule Act of 2006 would have cut down the red tape that stood in the way of building new refineries, and allows for building refineries on abandoned military installations.

Three: Streamline fuel blends - Congress should end its mandates for specialized "boutique" fuels for different regions of the country and different seasons of the year. This provides a straightforward opportunity for Congress to take action and end the fragmentation of our gasoline supply.

Four: Don't rely on food for fuel - This Congress has passed an energy bill. It quintupled the ethanol mandate. The ethanol industry was not ready to take this kind of supply shock, and federal efforts to pick the winners and losers in the marketplace have had devastating consequences in the food market. Congress can promote a more reasonable path to alternative energy by investing in the basic research to develop the ideas of tomorrow, such as using corn stalks and switch grass, rather than food, for energy.

Five: Stop stoking inflation - Additional responsibility for our current state of affairs rests with the Federal Reserve, whose dramatic interest rate cuts since last fall have pushed crude oil prices to new heights and stoked inflation. Congress is in a position to put our monetary policy on solid economic footing by reviewing the dual - and often contradictory - mandate, which directs to the Fed to focus on both long-term price stability and short-term economic growth. Ryan has proposed the Price Stability Act of 2008, which will make the Fed's overriding policy goal to control inflation.

His plan makes sense, with the exception imposing rules on the relatively independent Federal Reserve. Points one through four should be drafted into a bill and passed by Congress.