THERE IS a growing trend in our fast-paced world to look for an immediate fix to a problem rather than to address its long-term causes. This, unfortunately, is exactly what Democratic opponents of Friday's Refinery Bill are doing. The bill, which passed the House without a single Democratic vote, offers to shore up the long-term security of the United States economy by encouraging the construction of new oil refineries -- especially those away from the Gulf Coast and the path of future hurricanes like Katrina. By establishing a stronger and more spread out refinery network, the United States can only benefit from lower and more stable prices for gasoline and other oil by-products.
As reported by Fox News, Hurricane Katrina "disrupted 90 percent of the oil production in the Gulf of Mexico" as well as a number of interstate pipelines. This affected almost every single person in the United States as gas prices, heating oil prices and all prices in general rose, because in the end basically all goods in some way or another involve an oil product. It created an economic problem that only continued to spin out of control as refineries remained offline and other refineries were unable to take up the slack. All of this, however, comes back to one central point: The existing oil refinery and distribution network is insufficient. Fortunately this is what the Refinery Bill aims to change.
There are several central points of the Refinery Bill which are critical to building future security in the oil industry. The first is that the bill eases the permit process for constructing or expanding refineries. This is important because it will allow existing refineries to more quickly expand and take up the slack after disasters such as Katrina.
A second key provision of the bill is that it allows the federal government to select federal land such as closed military bases to be chosen as sites for new refineries. This will help to ensure that new refineries are built away potentially dangerous areas such as the Gulf Coast and help to repair what Myron Ebell of the Competitive Enterprise Institute calls "our aging and inadequate energy infrastructure (which) is stretched to the limit" on the CEI's informational Web-site.
Opponents of the Refinery Bill argue, as Fox News reports, that it will do little to affect immediate gas or oil prices, that rising prices already provide incentives for new construction, and that "it will allow the oil industry to avoid environmental rules." In arguing this, however, these opponents clearly have missed the entire point of the bill and the underlying economic realities that sparked it. For starters, this is a long-term solution to prevent the existing short-term problem of sky-rocketing prices from happening again. There is only so much that can be done to quickly lower current prices, because refineries not affected by Katrina can only increase production so much. This bill will encourage the construction of new refineries in new areas, however, and will allow existing refineries to better take up the slack in the future.
The second criticism of the bill, that rising prices already provide incentives for new refinery construction just does not make sense, because the rising prices are a temporary reaction to the total shutdown of refineries in the Gulf region. Yet even if prices did stay high, the bill would encourage construction away from dangerous regions like the Gulf coast through sale of unused Federal lands such as closed army bases. Finally, there is the environmental challenge. What must be remembered, though, is the impact sky-rocketing prices have on low and fixed income Americans, and that "dirtier air" is a small price to pay.
The Refinery Bill marks an amazing divide in partisan politics, and it shows the Democratic party's total lack of insight on economic and non-short-term issues. The bill, if it passes the Senate, will provide for long-term stability in the oil, gasoline, and indeed all related industries. It provides necessary encouragements not only to build new refineries, but to build them in safer areas. The Refinery Bill will provide for the future stability and security of the American economy and of the American people. Its opponents show not only a fundamental failure to understand the situation exposed in the wake of Katrina, but also a clear disregard for the future welfare of their constituents.
Allan Cruickshanks' column appears Tuesdays in The Cavalier Daily. He can be reached at acruickshanks@cavalierdaily.com.
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