Posted: 09/20/2005
Katrina Underscores Need for Energy Diversity
Sound Energy Policy Should Boost Production, Refining Capacity, Says NCPA Scholar
DALLAS (September 20, 2005) – Although fuel prices have moderated somewhat, Hurricane Katrina will continue to cause higher than normal prices for home heating oil, gasoline, food and chemicals, but the impact of the storm has important implications for public policy debate about energy, especially since it could have been much worse, according to NCPA Senior Fellow H. Sterling Burnett.
“We cannot afford to put all our eggs into one basket, the Gulf Coast, when developing a national energy strategy,” Dr. Burnett said. “We know that we have untapped, economically recoverable oil and natural gas off the East and West coasts and in Alaska.”
Burnett points out that although we can produce energy from these regions without unduly threatening the environment they remain off-limits for political purposes, which disproportionately affects the poor. Oil and gas prices rose rapidly as Katrina’s winds receded due to the disruption of oil production in the Gulf and damage to the region’s refineries that produce up to 10 percent of the U.S. supply of gasoline.
“We haven’t built a new refinery in 30 years and many have been closed due to local opposition,” Burnett said. “America’s prosperity is literally being held hostage to unfounded and over-hyped threats to the environment.” Burnett added that a sound national energy policy can remedy these problems by:
- Removing federal, state and local regulatory barriers to reopening closed refineries, expanding those still in production and constructing new ones.
- Remove top-down federal boutique fuel requirements that make fuel more expensive and less readily available in times of crisis, and create other environmental problems.
“If we had opened up more of the East and West coasts, the Great Lakes and Alaska to production 10 or 20 years ago, Katrina would not have had such an adverse impact on fuel prices,” Burnett said.