Tuesday, February 13, 2007

An Energy Policy Gone Bad

The United States has a strong economy and has a reputation as maybe the most innovative country in the world. But some argue that our reputation for innovation isn't quite as well deserved as it once was. It doen't take much of a look around to notice that there are problems. The auto industry isn't keeping up with the world and a great deal of the manufacturing base owned by American companies is actually overseas. We're more or less in good shape but problems are coming and it would be a mistake to take things for granted.

Here's a story from Anna Fifiled of the Financial Times that is a parable for all of us to consider (hat tip to The Oil Drum):
North Korea has suffered extreme energy shortages since the collapse of the Soviet Union, its main benefactor until 1990. Night-time satellite photos show the country as a black hole surrounded by Japan and South Korea – ablaze with light.

“North Korea’s power plants were already 40 years out of date [when the Soviet Union collapsed] but they can’t repair them because they don’t have the energy to make spare parts, which is causing them to deteriorate further,” says Timothy Savage of the Nautilus Institute, a think-tank that has done extensive studies of the North’s energy sector. “Their whole energy system is held together with chewing gum and baling wire.”


The energy shortages are directly related to the severe economic problems the North is suffering, analysts say. The US Central Intelligence Agency attributes years of industrial underinvestment to the country’s power problems. “Industrial and power output have declined in parallel,” the CIA says in its North Korea factbook.

...they can’t repair them because they don’t have the energy to make spare parts... North Korea is an extreme case scenario. But according to some experts, the scenario may become more common throughout the world if enough isn't done to maintain infrastructure and energy sources in the coming years. During the energy crisis of the 1970s, the economies of a number of countries actually went backwards. Even the economy of the United States went through a period of stagnant growth and inflation. No one knows the exact energy situation of the world. But there are plenty of signs that we need a major energy policy, one that considers climate change and pollution while taking care of our needs. The Bush Administration talks about energy but in fact it does little. That needs to change but no one expects much to happen in the next two years. When it comes to energy, the next president should be ready to hit the ground running. We've gone without an energy policy for too many years.

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