Pumping Up Energy Policy

With gas prices at the pump now exceeding two dollars in most states, the finger pointing has begun on both sides of the aisle to determine who is responsible for oil supply problems. Unfortunately, supply is not the major cause of these price rises. Runaway economic growth in China and India is, and it has been for some time now as the two Asian giants continue to modernize their economies. Short of trying to derail economic growth in the world’s two most populous nations, there is very little the United States government can do to stop worldwide demand for oil increasing. Much like the experience of the U.S. during the early 1980s, there is little that can be done to reduce our dependence on foreign oil aside from consuming less of it.

Energy policy in the United States has a history of being highly politicized and badly timed. President Carter’s efforts to improve fuel efficiency came too little too late as the Organization of the Petroleum Exporting Countries began restricting supply and the Iran-Iraq war started. Opportunities to reduce U.S. dependence on foreign oil were largely ignored under Reagan and Bush Sr. and were not a top priority during the Clinton administration when oil prices were historically low. However, the current Bush administration has broken new ground in irresponsible policy-making with the current energy bill, which is deadlocked in the Senate. Not only does the bill contain $25 billion in pork barreling, it does absolutely nothing to deal with U.S. energy demand in the future and instead includes a number of politically motivated provisions to satisfy favored industry groups. For instance, drilling the Antarctic National Wildlife Refuge, a key proposal in the bill, is unlikely to have any substantial benefit for reducing U.S. dependence on foreign oil, as is leaving SUV’s exempt from fuel efficiency standards on the basis that they are utility vehicles.

Real answers to U.S. energy problems have largely been left to sit in dusty energy journals for the last 15 years and have only recently begun to have any focus in mainstream politics. Improving Corporate Average Fuel Economy standards and rethinking the multitude of SUV exemptions are now on the table, as well as considering an oil import tax combined with a tax cut to ensure low income earners are not disadvantaged. These moves could substantially reduce the amount of oil the U.S. uses over the long run and reduce the exposure it has to political instability in the Middle East. The problem is that these kinds of changes need bipartisan political commitment, something that has sorely been lacking in Congress thus far. With an executive branch that is determined to force through a shopping list of gimmes likely received from energy industry groups in secretive consultations with Vice President Cheney and his energy taskforce, there is not much hope for decisive action on energy policy before the election.