Editor’s Note: Meeting the Challenge is an open-ended series from EnergytechStocks.com intended to build a blueprint for how the world can meet the incredible increase in energy that will be needed by 2030 without endangering the environment or nations’ security.

Posted: September 21, 2007

Noted energy analyst Phil Flynn of Alaron Trading is certain that America’s energy problems are best solved by letting markets work without government interference. But if government simply must butt in, Flynn says the worst thing it could do is what many in Washington seem inclined to do: punish the oil industry through higher taxes.

“The oil companies are not the enemy. Why pick on the oil industry?” Flynn rhetorically asked at one point during a lengthy interview with EnergyTechStocks.com.

While surveys show that many Americans would answer that the oil industry deserves to be picked on for making windfall profits, Flynn said that if government’s goal is to encourage development of alternative fuels, then every industry that uses energy should be taxed. “It should be across the board,” he said.

It’s high time, Flynn added, that Washington recognize that, far from monopolizing the oil market, the major oil companies are competing fiercely with China, Venezuela and other state-owned oil concerns. “From a national security point of view, it’s a mistake to try and emasculate the oil industry,” he said.

Flying in the face of public opinion, Flynn went on to say that rather than have their taxes hiked, oil companies need a tax break specifically to encourage them to build more refineries. As high as refining margins already are, he said, they need to be even higher to convince oil companies to take on the risk and cost of building the new refineries that the United States desperately needs.

As reported yesterday in the first part of this exclusive three-part series, Flynn expects that oil prices will rise to $120 a barrel over the next five years, which he says will be okay for the overall economy provided the rise is due to continued economic growth, not some geopolitical event.

Part 3 of Flynn Series runs Monday, September 24