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As fuel prices rise, what alternatives are available to us ? How do we combat this problematic issue?

Posted on: June 13, 2008

High gas prices can be fixed to a great degree by the government. by introducing fewer restrictions on domestic oil drilling. America is the only oil-producing nation on earth that has placed off-limits a substantial amount of energy reserves. This includes a few thousand acres of Alaska’s 20 million-acre Arctic National Wildlife Refuge that are believed to contain 10 billion barrels of oil. This is equivalent to 16 years of imports from Saudi Arabia. 85 percent of America’s territorial waters that are off limits (especially the western half of the Gulf of Mexico) more oil can be found. Though well-meaning environmentalists might be worried regarding the pitfalls of drilling on our environment, improvements in drilling technology in the recent times have greatly reduced the risk of offshore spills.

It would also be worthwhile to streamline the regulations that make it all but impossible to build a new refinery and more difficult and time-consuming to expand an existing one. Because of abundant regulation in the nuclear field and a lack of nuclear reactors more and more oil is used and because of the steadily high the price also goes higher. At this juncture we also need to be aware of the problems that the most popular and immediate alternative bio-fuel ethanol can come up with One of the federal requirements for the use of this alternative is that corn-based ethanol needs to be mixed into the gasoline But this way, not only will ethanol raise the cost of driving, but diverting corn from food to fuel will hike food prices as well. We also need to understand the mistakes of past government officials and a desire not to repeat these mistakes of the 1970s and early 1980s.

Among other mistakes from that period, the government increased the taxes levied on domestic oil producers, as if that would somehow help. Obama and Clinton want to repeat this again. The result, according to the Congressional Research Service, was “reduced domestic oil production from between 3 and 6 percent, and increased oil imports from between 8 and 16 percent.” The government also instituted price controls, which only served to create the notorious gas shortages of that era. No rational policymaker should want to repeat the mistakes of those days, yet several members of Congress are trying to do just that. There are new proposals to increase the effective tax rates on U.S. oil companies. There are also price-gouging measures, which act the same way as price controls do. Both try to make high prices illegal. Both discourage badly needed supply increases and, thus, end up doing more harm than good.

So, a few pointers that can be discussed are-

1) Opening up of Alaska for domestic drilling.
2) Reduce regulation and rules for building new refineries and expanding existing facilities.
3) Have them google the Synthetic Fuel Corporation created in 1981–the SFC was a federal chartered corporation that had as it’s sole purpose to work with private industry to produce synthetic fuels. It scared the heck out of the Saudi’s and forced them to increase supply to cut the price of oil back to $60.00 a barrel.

Meanwhile, its great to see that as oil prices continue to rise, the U.S. Department of Energy (DOE) has started looking for alternative fuels which would cost less, have lower emissions, and decrease dependence on the oil reserves of the Middle East’s One option that has become more feasible in this process is the use of liquefied natural gas or (LNG) to fuel vehicles. Natural gas is an extremely clean burning resource that has become cost-competitive with other fossil fuels. Best stored and transported as a compressed or LNG,the natural gas can either be used as liquid or it can be evaporated and sold as compressed natural gas.

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