Energy prices undermine economy
By By Rep. Ronald Grantland, Guest Columnist
One of the main problems for regular folks in this troubled economy has been the price of energy.
It impacts our family budgets, drains money from other important purchases, and is a dead weight on our state economy. Whoever the next president will be, he will have to put us on a different road on energy.
Natural gas is way up. The Public Service Commission just gave Alabama Power permission to raise rates by a total of 13 percent because of increased costs. And just look at gasoline prices.
AAA's Fuel Gauge Report shows that the cost of a gallon is currently on the way down, but is still much higher than it was a year ago.
There are some places where it is finally below $3 but for most of the state it is a half-a-dollar higher than that. The price of crude has gone down and that should drive down prices further, but it still will be expensive and a threat to our family budget. We need something different than petroleum, and soon.
One peek at the future happened last week with the opening of the first "biofuels corridor" in the country, and Alabama was a part of it. Interstate 65, from Mobile all the way up in Indiana, will have stations selling E85 ethanol and B20 biodiesel, located every 100 miles or so along the entire length of the highway. Biofuels are a real opportunity for the future.
Biodiesel can be made from any type of fat or vegetable oil. Ethanol is a distilled, alcohol-based fuel made from things like paper pulp, switchgrass and sugar cane. The growth of these two fuels will have an impact on Alabama; biodiesel is often created from soybeans and ethanol is most often distilled from corn. These two crops are grown in abundance in Alabama.
Biofuels are not some pie-in-the-sky thing either. Current estimates show that there are 110,000 flex-fuel vehicles in Alabama that use ethanol or biodiesel, and sales of the alternative fuels are brisk, according to officials. That is also where the biofuels corridor fits in. The Alabama Department of Economic and Community Affairs is offering grants of up to $50,000 to encourage businesses to install more pumps for biofuels near I-65, with the money coming from a Department of Energy program.
It makes sense that the federal government is helping promote and expand this new energy source. While some may decry the effectiveness of federal efforts, there is a history of success in Alabama when it comes to energy.
Back in the early 1930's, much of our rural state was without electricity. It is hard to fathom now, but often electric lights would end at the edge of the city. The power companies just didn't think it was economically feasible or desirable to bring wire to farms and small towns in rural counties.
In response, Franklin Delano Roosevelt founded the Rural Electrification Administration, making loans and support available to local electric cooperatives, which in many places in Alabama continue to operate the lines and distribute electricity today.
Roosevelt also created the Tennessee Valley Authority, now the nation's largest public power company, which electrified the entire northern part of Alabama. It is readily apparent that these investments by the federal government paid off handsomely, and were critical in the development of Alabama.
Why can't similar investments and direction toward alternative fuels have the same success?
It is time to make new energy investments in Alabama and across the nation, ones that move beyond oil and into things we can control, like agriculture and clean coal.
FDR showed that the federal government can and should help this process.
It is a national security issue as well as an economic and environmental one.
Investment in new energy sources will certainly be good for Alabama.