How to Save American Business

Tax issues are important, but it's the continued escalation in the invisible costs that's killing us these days.

The Toll of High Energy Costs

I'm sure that boosting U.S. oil production will be one of your priorities this term, as well it should be. High energy prices are a huge burden on companies like ours -- and everybody else, for that matter. In the past, however, I think we've gotten sidetracked by focusing too much attention on issues like drilling in Alaska, while we've all but ignored other major obstacles to increased oil production, such as the shortage of domestic oil refining capacity. That's a direct result of the regulations we've put on oil refineries. As you may be aware, no new refinery has been built in this country since 1976. Why? Because it would cost more than $2.5 billion to build one from scratch that meets our stringent emissions standards. As it is, even if you succeeded in getting more oil pumped in Alaska, we might not be able to refine it, meaning that we'd have to continue living with high gas prices -- and suffering the consequences.

Don't get me wrong. I'm all in favor of having a healthy environment. But there are always tradeoffs in the decisions we make, as every business owner knows. The desire to achieve one important objective, like having cleaner air, has to be balanced against other important objectives, like keeping the economy strong. That requires planning. At SRC, we make sure in advance that we have enough labor and equipment to reach our goals each year. Otherwise we could run into capacity constraints that would trip us up. Clearly, Congress did not do the same when it passed the legislation clamping down on oil refinery emissions. If you really want to boost oil production, you'll have to force Congress to go back and do it now.