The Observer, February 10, 2006
Volume XXXVIII, Issue 16
Politics hinders progress on economics of energy in US
I love listening to President Bush speak. Yes, he occasionally fumbles over his words – like nook-u-ler instead of nuclear – but when he speaks I know that I'm listening to a man who believes very deeply in his words. In this age of moral relativism and cynicism there is something refreshing about honest convictions. His ringing defense of his national security decisions during last week's State of the Union address gave me that feeling. I predict that this bold line will be quoted for years to come: "There is a difference between responsible criticism that aims for success and defeatism that refuses to acknowledge anything but failure. Hindsight alone is not wisdom. And second-guessing is not a strategy." With his broad discussions of free-market healthcare reform and tax cuts, there was little in his domestic to-do list that fair-minded Americans could oppose. However, the President's energy discussion was a debacle.
I hope that it was simply political pandering to please soccer moms who whine about gas prices, and not his actual plan. President Bush's assertion that Americans are "addicted to oil" is ridiculous. As a poor college student, peanut butter and eggs – never together – are a staple of my diet because of their low-cost energy supply. How is it irrational for the American consumer to prefer the cheapest source of energy available?
The government has been wasting tax dollars on "clean-coal," wind, and solar power plants for 30 years and we have almost nothing to show for it. There are still no clean-coal facilities, and wind and solar power have failed to capture even a small share of the market. President Bush has informed us that we have spent $10 billion "to develop cleaner, cheaper, more reliable alternative energy sources," and what has that $10 billion gotten us? Nothing.
And all of this has little to do with our short-term energy consumption. About two-thirds of American oil is used in cars. Therefore, until we have an electric car that can be plugged into the wall, how we make electricity is irrelevant.
President Clinton had an idea similar to President Bush's: to create a government-funded program to aid the development of alternative fuel vehicles. For eight years we funded the Partnership for the Next Generation Vehicle. While we wasted millions of tax dollars on a poorly designed government program, private corporations in Japan developed the hybrid cars that are flying off dealer lots. History tells us that the government is terrible at spurring innovation in energy and automobiles. Why should we trust them to do better now?
Reducing dependence on Middle Eastern oil is a silly idea, reminiscent of the stupid 1970s oil policies that gave us gas rations and lines around the block. The price for foreign oil – like the price for all market goods – is dictated by the global market. If a revolution breaks out in Iran or Saudi Arabia and the global supply of oil decreases it will raise the price of oil no matter who we buy it from – simple supply and demand from Econ 101.
The only way to insulate ourselves from global supply shocks is to increase domestic production. Currently, House Republicans are fighting courageously to open a small portion of the Artic National Wildlife Reserve (ANWR) to drilling, but liberals and moderates are succumbing to the environmentalists by rejecting the idea. We hear never-ending stories about the plight of the caribou that will accompany development in ANWR that are simply false. ANWR is about the size of South Carolina. The House Republicans want to open an area that is about the size of an airport. The caribou will have plenty of room to play.
At a time in history when our economy is dependent upon foreign energy sources and demand from India and China is driving up the international price, it is simply decadent to outlaw drilling so that lower-48ers can have dreamy-eyed visions of caribou and moose roaming the snow-capped mountains of Alaska. Through his tax cuts and support for health savings accounts, President Bush has proven his faith in the free market; he should not allow feel-good politics to trump sound economic policy. I sure don't want to wait an hour for $5 per gallon gas.
