OIL IMPORTS AND US ENERGY POLICY

The US oil and gas industry soon will receive a hard lesson about the problem of calibrating energy policy to the country's dependency on imported oil.

Texas Gov. George W. Bush has adopted the classical argument for measures that would raise US oil production, such as leasing the Arctic National Wildlife Refuge coastal plain: that they would lower imports' share of total oil supply.

In the heat of a presidential campaign complicated by oil prices high enough to anger the public, the strategy is reasonable. Very few voters care about oil imports except when prices are high. And very few voters even think about leasing ANWR except when high prices make them worry about things like imported oil.

So use of import dependency as a lever for the ANWR leasing issue makes timely use of momentary passion. It is what politicians do when they run for office.

As serious policy-making, however, the tactic raises problems. This will be increasingly evident if energy issues stay close to center stage through the rest of the campaign.

Using import reduction to argue for domestic production steers the industry into hazardous territory.

For one thing, it obscures better arguments for the same goal. Chief among them is that domestic production is good not only for producers but also for the people with whom they do business and the governments to which they pay taxes. Producers need to say that whenever they get the chance. Too often, they snag on the import argument.

Also, flailing against imports is futile. The US needs imported oil and always will. The degree of dependency on imported oil doesn't really matter. What matters is that as much oil be produced in the US as is economically possible-for reasons altogether economic.

And traditional security arguments don't hold up anymore. Exporters need oil revenues as much as the US needs oil imports. Security now comes from mutual economic dependency.

So the proper metric for energy policy isn't import dependency but the undeniable cost of not producing economically producible oil. It should be the focus of arguments advanced for increasing domestic oil production.

What is more, the arithmetic of import dependency turns easily against industry interests.

The country can reduce import dependency not only by producing more oil of its own but also by cutting its oil consumption. If imports are so horrible, why not just slap big taxes on oil and let less competitive fuels take its place?

Vice-Pres. Al Gore quickly warms to that line of thought. The Democratic candidate for the presidency seizes on every argument he can for replacing oil with energy he likes better.

Bush thus will find himself in a trap if lowering import dependency remains his best argument for raising domestic production.

But the logic is simple, after all, and this is a political campaign. It certainly won't be difficult to see which candidate stands where on energy.

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