This summer witnessed record temperatures and power blackouts from New York to California, causing or contributing to over 1,000 heat-related deaths nationwide. Some places, like Queens, New York, were without power for weeks.

     Politicians and power company executives blamed the usual litany of "demons" including a hotter than normal summer, greedy oil companies, and "overuse" of air conditioners by consumers.

     However, a growing chorus of libertarian and conservative commentators are challenging the official view and instead laying the blame at the doorstep of our politicized, power grid.

     Robert Bradley, author of Energy: The Master Resource, argues that the problem is centralization and cartelization of energy production, which began nearly a century ago.

     In the name of "protecting the public," government has steadily increased its control over energy production in America.

     Today, every aspect of energy production and distribution has been politicized.

     The result:

• Competition in production of energy is limited.

• Energy companies' first responsibility is not to serve consumers but to comply with government regulatory mandates.

• Profits and innovation are obstructed.

• Capital improvements, such as expansion of the electrical grid, are impeded.

       The net effect of all of the state, federal and local energy regulations is stagnation, shortages, and, ultimately, deaths such as we saw this summer from blackouts.

       As commentator Llewellyn Rockwell points out, only in a politicized market is increasing demand for a resource seen as a problem rather than an opportunity:

        "After all, do shoe manufacturers see a massive increase in footwear as a problem? Do fast food companies see lunchtime munchies as a terrible threat? On the contrary, these are profit opportunities."

       Politicization of energy is also responsible for rising prices. As biochemist Dr. Arthur B. Robinson, editor of Access to Energy, explains:

  "Our principal energy problem is the same as with virtually all American economic problems: taxation, regulation, and litigation.

  "In the case of the immediate rise in energy prices – specifically automobile fuel prices – there is a terrible shortage of oil refineries. The United States hasn't built any new oil refineries in the past 35 years."

  "Yet the oil refining industry spends huge amounts of capital complying with government regulations, only to have the bureaucrats and politicians change their minds and change the rules. . ."

  "Then there is taxation. Oil company capital that would and should be going into exploration, extraction, and refining is instead being consumed by government taxes."

  "Then, of course, litigation is a major problem because no matter how much a company spends on compliance, regulatory bureaucrats and/or environmental activists can be depended on not to be satisfied and to launch another costly delaying lawsuit."
  (Mary Benoit, "An Expert Looks at the Energy 'Crisis'," The New American, 6-26-06.)

       If you want more and cheaper energy, we need to slash energy taxes, regulation, and law suits.

       For more information on how political control corrupts energy markets, see past issues of IIR, including October 2004 and Nov-Dec 2004. We also recommend Access to Energy newsletter: www.accesstoenergy.com

  
  

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