Not All Energy Problems Are Created Equal

In the mobster movie "The Untouchables," Sean Connery playing the wise old Irish beat cop tells Kevin Costner's Elliot Ness (I'm paraphrasing), "Everyone knows where the liquor is, but no one is willing to cross Capone and go get it." The same goes for our gas price woes. The solution is plain, but we simply can't or won't bring ourselves to execute it.

We need more oil and more refining capacity, but neither is happening any time soon. Depending on where you stand, this is a case of admirable restraint or wasted opportunity, but the ramifications of our decision to uphold the moratorium are clear: lots of complaining and hand wrininging, and $5 a gallon gas.

SDG&E put out a release today announcing its intention to build a 46MW, gas-fired peaking plant near San Diego. If all goes according to plan, it will be online in 2009 and will only be used to meet increased demand during peak consumption periods.

The release notes that the building new gas-fired plants is still very much part of California's overall energy plan, after conservation and development of new alternative energy resources.

Ironically, this story is moving on the same day we are treated to a host of stories about how everyone from the environemental community to Gov. Schwarzenegger is balking at the White House's call for increased offshore drilling.

SDG&E is moving to increase capacity to meet consumer demand and this will more than likely sail through the bureacratic morrass unchallenged because it makes fundatmental sense; the same logic does not apply for oil (and ultimately gasoline).

Just as SDG&E noted in its press release, the answer to our oil (gasoline) woes is rooted in the same three part strategy: conservation, development of new alternatives (technology), and increasing capacity.

Wer'e clearly not doing enough in the conservation department and we're making limited strides in the development of commercially viable alternative vehicle technology, but apparently we are dead set against increasing capacity.

Despite the fact that we know where the oil is and how to get it, and desptite the fact that resource extraction technology is light years ahead of what it was a generation ago, everyone except George W. Bush and John McCain is saying no to drilling in ANWR and to offshore drilling.

Clearly, in environmental impact terms, a gas-fired power plant that will only be put to limited use is not even in the same league as offshore drilling but the academic point is obvious-- we need more capacity and (rightly or wrongly) we are not willing to produce it for oil, so we have to live with the consequences and change our habits.

News reports already document the fundamental shift in consumer behavior now that gas prices are knocking on $5 a gallon-- the freeways are less crowded, but the trains are packed. The people have spoken...