The Democrats' design to starve energy supply

Kay Bailey Hutchison:

"The major obstacle to the development of new supplies is not geology but what happens above ground: international affairs, politics, investment and technology."

— Daniel Yergin, Pulitzer Prize-winning author of The Prize: The Epic Quest for Oil, Money, and Power.

With oil prices soaring to record highs, currently approaching $100 per barrel, and Americans increasingly feeling the impact, Congress can choose to magnify the problem or be part of the solution.

In response to skyrocketing energy prices, caused largely by greater worldwide demand and static supply, new energy legislation passed in each house of Congress is, in fact, bereft of real energy. It would jeopardize our national security, threaten our economic stability, and indeed raise the very obstacles to which Yergin alludes.

The only way to address our crisis is to increase the supply of energy. However, legislation proposed in Congress would actually lead to reductions in energy supply and target the oil and gas industry with $16 billion in new taxes.

The assumption is that American consumers will not be affected by increased corporate taxes. In reality, punitive tax hikes will lower exploration and production and increase prices. Therefore, Congress' "solution" will lead us into a greater crisis.

This is particularly true in the case of refining capacity. Gas prices spiked in 2005 in the wake of Hurricane Katrina primarily because we were not able to replace production of refineries that were taken off-line. Tax and energy policies had discouraged construction of new refineries in America for more than 30 years.

Two years ago, Congress established incentives to spur investment in additional refining production, leading to major announcements of refining expansion.

Congress has now proposed repealing these incentives, delivering a tremendous and unexpected setback for companies investing billions of dollars in refinery expansion or new construction projects.

This is part of a larger problem that CEOs consistently bring to my attention, specifically that Congress' constant meddling in the tax code puts America at a competitive disadvantage, encouraging companies to relocate assets to countries where the tax code and regulatory process is more predictable and stable.

Perhaps of greatest concern, this legislation will threaten our national security by increasing our dangerous dependence on foreign oil. Today, the United States imports nearly 60 percent of our oil from other countries, and many of those countries are hostile to our interests. Making strides toward an energy-independent America should be at the forefront of our legislative priorities.

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While taxes are a concern, the most obvious way Democrats and Congress are starving the US of energy is by restrictions on production. Not allowing drilling in a proven field in Alaska because of bogus concerns about the environment is just on obvious example. The restrictions on offshore drilling are ludicrous and for the same bogus concerns over the environment. The Democrats strategy appears to be that if we starve our oil supply, alternative sources of energy will magically appear.

So far there has been no magic. We have become more dependent on people who do not have our interest at heart and are paying an ever higher price for the dependency, when we could dramatically lower the dependency and the price by producing in the areas that are currently being restricted.

The Democrat strategy is resulting in a strategic defeat for the US. To call it insane is to insult those who are mentally challenged.