The Associated Press reported last week that "Democrats celebrated a step toward reducing U.S. dependence on oil as the Senate approved a bill calling for more ethanol and the first boost in gas mileage in decades." What the Democrats are really celebrating is their move to micromanage the energy market. They would like to micromanage all the markets. That way they can get more campaign contributions from all the industries that want to play in their markets.

We don't need additional controls on the energy market, we need fewer. If the government would get out of the way private industry and a free market would eliminate any energy problems. The government is currently preventing the building of nuclear power plants, preventing the development of new domestic oil fields, and preventing the building of new oil refineries. Right here in my state Senator Mel Martinez boasts frequently about 'protecting' our gulf waters from becoming oil fields. There is no pressing need to reduce our dependence on oil in general; what we need is to reduce our dependence on foreign oil.

There is no real environmental gain from using ethanol instead of gasoline. The only benefit from ethanol is that it can be produced domestically and, therefore, reduces to some extent our dependence on foreign oil. We should welcome the development and production of alternative energy sources like ethanol, but leave them to the free market. If there is demand for ethanol someone will supply it. And there will be demand for it when oil prices get high enough. But ethanol is not the final answer.

The ultimate renewable energy source is the sun. When the sun stops shining we won't need any more energy. If the government wants to sponsor some far-term basic research into new sources of energy it should put its money and effort into developing revolutionary ways of capturing solar energy. I'm not talking about capturing it through the production of corn and then extracting energy from the corn. I'm talking about more direct methods like the current use of solar cells to produce electricity. There has to be some breakthrough solution out there; we just need to get enough of the right people thinking about it.

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The Senate bill calls for price gouging provisions that make it unlawful to charge an "unconscionably excessive" price for oil products, including gasoline. Are they kidding? How do they expect to measure what is unconscionably excessive? Some court will throw that out the first time it is challenged. Perhaps they know that and are just trying to make some political mileage.

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According to Walter Williams, the state nannies in California are preparing to control your thermostats for you:

The California Energy Commission has recently proposed amendments to its standards for energy efficiency. These standards include a requirement that any new or modified heating or air conditioning system must include a programmable communicating thermostat (PCT) whose settings can be remotely controlled by government authorities. A thermostat czar, sitting in Sacramento, would be empowered to remotely reduce the heating or cooling of your house during what he deems as an "emergency event."

Building more nuclear power plants would negate the need for such an intrusive measure. But that's not what governments want. They want greater need for their meddling.

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I can't turn on the television these days without hearing some politician advocating the achievement of energy independence. Not a single time have I heard one pushing for banana independence. Yet we import all our bananas from foreign countries and some of them don't like us all that much.

The only half-way valid argument for energy independence is national security. If our foreign sources of oil were cut off we could be practically dead in the water after our strategic petroleum reserves are exhausted. For that reason we should be preparing all our known oil fields for production and exploring for more. We should also be developing alternative sources of energy.

But there is no reason to stop importing foreign oil as long as its price is competitive with domestically produced oil. It makes sense to me to keep using the foreign oil as long as we can get it and afford it, and save ours for later. That is, use theirs and hoard ours. If foreign oil becomes unaffordable and threatens our economy we could increase domestic production to hold the price down.

The politicians also rant about the hundreds of billions of dollars we are sending to the Middle East each year to satisfy our "addiction" to oil. They speak as if the money is being poured down a rat hole. Actually, if the foreign recipients of our dollars are pouring them down a rat hole or storing them in a vault, the oil we get from them is effectively free. We could just print more money to replace what they are holding.

But that's not how it works. We engage in a voluntary transaction with the foreigners in which we get oil and they get US dollars. The only place on the planet where US dollars can be redeemed is in the US. The dollars that they accept in exchange for their oil are effectively promises that they can come to the US later and exchange them for goods, services or property. They may choose to trade the dollars to some other country but that country still has to spend the dollars in the US. So, in the end, all that money sent abroad has to eventually come back and when it does it creates commerce (and jobs) here. This is true of all other forms of foreign trade as well.

This process still might work to our disadvantage if we pay too much per barrel of oil. We were recently paying about $140 per barrel. A Saudi could (but probably wouldn't) stay overnight in a decent hotel in the US for that amount. We get about 20 gallons of gasoline and numerous side products from the barrel of oil. Is that a good trade? I don't know but a free market will.

Energy independence sounds good but let's not go there as long as foreign oil is comparable in price to domestic oil and we are ready to tap into our known deposits in case of a national emergency.

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