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Lawmakers Disagree on How to Fix Nation's Energy Crisis

posted on September 30, 2005

Hello, I'm Mark Pearson.

No formula exists to help calculate the damage totals from this season's hurricanes. The latest guesstimate on Hurricane Katrina alone stands at $100 billion ... but that doesn't include the hidden economic impact of Katrina and her sister, Rita.

In broad terms, *consumer spending has plunged by the largest amount since the terror attacks of September 2001. *Personal incomes have fallen even though prior to the storms analysts forecast solid growth. *And jobless claims resulting from Katrina now stand at 279,000.

The economic damage also can be measured in the rising costs of energy products. Those costs are especially tangible in farm country at harvest time. Diesel fuel prices are up some 70 percent from a year ago at this time. And that threatens profitability at a time when crop prices are at seasonal lows.

If there's a silver lining to the hurricane fallout, it's in the growing confidence that damage from Rita was lighter than originally feared.


Lawmakers Disagree on How to Fix Nation's Energy Crisis

Hurricane Rita had less impact on the agriculture industry along the Texas-Louisiana border than originally predicted. Two grain trade associations report minimal damage at export grain elevators located along the Texas Gulf. The seven elevators located in the area have a combined storage capacity of some 33 million bushels.

Meanwhile, House Republicans are pushing to ease environmental requirements and to open new areas to drilling. All of this is in response to concerns over high energy prices triggered by Hurricane Katrina. Some Democrats accuse the GOP of exploiting the tragedy that has hit the Gulf region in order to pursue their own agendas on energy. They are calling the proposed legislation a subsidy to an energy industry that already is reaping huge profits from high oil and gasoline prices.

Advocates argue such measures are needed to address the vulnerabilities exposed by the recent hurricanes to the nations energy industry.

Farm state lawmakers are suggesting other ways to improve the U.S. energy dilemma. Representatives in the Midwest are calling for ethanol mandates. Iowa Republican Jim Nussle proposes a requirement that all gasoline sold in the state be blended with ethanol. Its part of his package aimed at making 20 percent of the energy consumed in Iowa from renewable sources. Nussle is joined by other Midwest lawmakers who agree that, in light of soaring energy prices, disruptions in supplies from the Middle East and recent disastrous hurricanes; it's time to focus on renewable energy sources.


Tags: agriculture ethanol hurricanes industry news storms weather