The President has said he will sign the new energy bill today. We have needed a new energy policy for years and we're finally getting one...what's not to like? Three things: 1. Increasing food costs with no reduction in fuel costs, 2. Continued foreign oil dependence, and 3. a failure to pursue nuclear technologies.
1. The bill requires additional spending on ethanol which has spiked the demand for corn in the past two years. Simple supply and demand then requires that supply must increase to meet demand. If the supply doesn't increase at the same rate, the mechanism that market uses to level out the disparity is price. Higher priced corn = higher priced food = higher grocery bill. In addition, opportunity cost comes into play here. The farmers have gone all out in producing corn because that is where the money is. What are they not producing now because they switched over to corn. This reduces supply of a particular commodity, thereby increasing price.
2. Continued foreign oil dependence. The omnibus bill passed by both houses last night
prohibits funding for oil shale commercial regulations which makes commercial production of the United States’ 2 trillion barrels of oil shale resources is impossible.3. Failure to pursue nuclear technologies. Not a word. This is the surest path to energy independence and it is rarely even discussed.
Oh, and grandaddy federal government is telling us we can't use 100 watt bulbs any more...