National Debt & Deficit Spending Agriculture, Energy, and the Economy
With diesel on its way to $5.00 a gallon, $3.80 a gallon propane, and gasoline predicted to reach $4.00 a gallon this summer, when will prices reverse? Coal provides nearly half of our electricity, yet is by far the larger contributor of industrial CO2 to the world's atmosphere.
Petroleum pervades industry and agriculture, from plastic irrigation piping to fertilizer, from fuel to pump water to stationary engines on drill rigs, from the truck that ships livestock to the pickup truck pulling a cattle hauler. As noted in a recent Wyoming Livestock Roundup article, April 19, 2008, "Driving Costs: Fuel costs keep challenging Wyo Ag."
These are costs of working land and keeping livestock. They are there regardless. Every day, every mile driven or gallon pumped. Ranchers are hoping that they can pass these costs on, but the market can be slow sometimes in responding to the first producer. So these costs initially come out of profitability.
What can Congress do?
First, Congress must acknowledge that we are now in global competition for every gallon of fuel. China & India are vast economies that compete with ours. We will out-compete them; the inventiveness and industry of the American people has been our hallmark and will remain so.
In addressing the Wyoming Wildlife Heritage Foundation last year, Wyoming State Geologist Ronald Surdam described the impact on the world of the geology of petroleum.
Simply: Cheap oil is behind us. We must move on to a world where petroleum demand is increasing, while the cost of finding, extracting, and refining each gallon of oil is ever-rising. This clearly will impact Wyoming's Ag community and certainly will drive our nation's economy.
Second, our energy consumption must be rationalized across all energy sources. We have had a luxury of inexpensive fuel since the dawning of the industrial era. When petroleum became universally available fuel became even less expensive. Our economy is based on this.
Our Ag productivity had been focused on the machinery that improves yield many-fold. The real ability of Ag producers to profit was based on ingenuity and an ability to sense the market. Now that ingenuity will be tested as squeezing every bushel out of a gallon of fuel will become paramount.
Energy is consumed across a spectrum of sources and forms: Petroleum, coal, solar, methane, wind, and nuclear. A given form doesn't compete directly since in some cases one can substitute for another, but they do eventually drive pricing across all energy forms.
When Wyoming sees the Union Pacific string electric catenary lines over its mainline, replacing diesel electric with pure electric the impact of energy substitution will be apparent to all. Congress must encourage this process by ensuring that energy is there in all forms.
Third, we must get on with developing our resources. The basis of our ability to fence off regions to preserve wilderness, habitats, and recreation has been that we could afford to import energy because it was so cheap. This tactic worked while energy prices were low.
The future is clear. That tactic is now history.
Congress must get on with the self-discipline of encouraging the mainstreaming of technology that enables a minimal footprint by energy explorers and developers on these wonderful areas. Industry knows how to do this. But industry focuses on its least costly method.
That's our system.
In the end, our beautiful nation has many parts that are worth preserving. Wildlife matters in our environment. We must find ways to recover resources while limiting environmental impact.
The handwriting is on the wall: We cannot preserve what we cannot protect.
Whatever we choose to preserve can only be preserved if our economy is strong and that means energy in all its forms coupled with the underpinning of a strong, competitive Ag community.
The United States must adapt to a world far different from less than a decade ago.
The world is no longer a unipolar world where our economic might made us preeminent. Congress must take on the challenges of this world as it is, not as it once was.