
Guest Editorial

Date Published to Web: 9/1/2004
DON C. BRUNELLWhile President Bush and Senator Kerry spar over their respective military records, the price of crude oil is now hovering around $50 a barrel - and that spells trouble for our economy. The U.S. economy is based on reliable and affordable energy. When crude prices spiked to $30 a barrel a few years ago, Americans struggled. But at $50 a barrel, the U.S. economy bleeds.The first to feel the pinch are the airlines, trucking industry, farmers and energy-intensive manufacturers such as aluminum and pulp and paper. Guess what? All those industries are crucial to Washington state's economy.For example, the airline industry - including Seattle-based Alaska Airlines - has struggled to win back customers scared off by the 9/11 terrorist attacks. But because jet fuel prices can mean the difference between profit and loss, $50 a barrel oil prices are pushing operating costs ever higher. This is bad news for Boeing as well. Its commercial airline division, located in the Puget Sound area, needs healthy and profitable airlines to buy its jets.In addition, Washington is home to many large trucking companies such as Interstate Distribution of Tacoma. Spiking fuel prices mean the company either has to swallow those higher costs or pass them on as surcharges to customers. PACCAR has a mammoth truck manufacturing factory in Renton. If truckers are ailing, so are new truck sales.Even before the latest surge in energy prices, skyrocketing electricity costs have pushed the region's aluminum industry to the brink of collapse, and threaten other energy intensive sectors such as the pulp and paper industry.Senator Kerry proposes reducing our dependence on hydrocarbon fuels like crude oil, and President Bush pushes for more oil exploration. Who is right? They both are, but Congress must quit wringing its hands and deal with the problem!The President's energy plan, which has been pigeon-holed by Congress, includes proposals to spend more for alternative energy sources such as fuel cells, wind and solar power. It also calls for more oil drilling as a stopgap measure until new alternative sources are brought on line. It also supports developing clean coal technology and safer nuclear power - both of which are needed.The bottom line is this: countries with cheaper energy will dominate the world economy. Qatar, which sits on one of the world's largest reserves of natural gas, is already aggressively working to bring new aluminum and fertilizer plants to that country.China, which has a stark competitive advantage when it comes to lower wages and regulatory compliance costs, is competing head-to-head with the United States for crude oil. In fact, projections show that China may exceed the petroleum consumption of the United States in the next five years.So what does this all mean? It means that our leading politicians need to quit bickering over partisan energy plans and military service records and focus on an issue that will make or break Washington and the United States: energy.Don C. Brunell is President of the Association of Washington Business.







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