The US Senate kept Congress true to form Dec. 21 when it rejected the latest effort to authorize oil and gas leasing of the Arctic National Wildlife Refuge Coastal Plain. Facing big energy problems, it squandered yet another chance to enact a potentially big solution. The missed opportunity was one of many ways Congress failed energy consumers in 2005.
Last year will be remembered as one in which Congress finally passed comprehensive energy legislation yet never managed to address the country’s most pressing energy challenges. The omnibus energy bill shunned the biggest oil and gas issues, such as access to natural resources, and botched others, such as mandating ethanol in vehicle fuel. Lawmakers hadn’t even finished congratulating themselves for passing their monument to special-interest deal-making before nature provided a stark reminder of how precarious US energy supply had become.
Fuel costs
Persistent misjudgment on energy is bad enough. Hypocrisy is worse. The omnibus energy bill includes measures that will increase the costs of making and delivering oil products. The ethanol mandate, for example, will raise the cost of delivered gasoline in a phenomenon sure to be aggravated by the legal jeopardy of refiners over the oxygenate methyl tertiary butyl ether, about which Congress chose not to act. Ultimately, consumers will bear the costs. And while raising fuel costs in these ways, Congress continued to refuse to do everything possible to increase domestic supplies of crude oil and natural gas.
These lapses occurred while demand for oil and gas had reached levels that were clearly straining production, processing, and transportation capacities. Yet Congress did nowhere near what it should have done to address supplies of the hydrocarbons that represent nearly two thirds of US energy supply. And when Hurricanes Katrina and Rita ravaged gulf production and Gulf Coast refineries, pipelines, and gas processing plants, driving up fuel prices, lawmakers responded by blustering about “price gouging,” holding bombastic inquisitions of oil company executives, and threatening to tax “windfall profits.” Coming on the heels of legislation sure to raise fuel costs, the performance lowered the standard for political behavior.
This has to change. Energy is too important to be mangled by the serial mistakes of a demagogic legislature. The US needs its lawmakers to find a new approach.
Congress should, for example, ditch the worn-out populism that turns energy issues into confrontations between the public and oil companies. The public needs steady supplies of affordable energy-especially oil and gas, whose dominance of the energy market won’t soon change. Oil companies prosper or fail depending on their abilities to satisfy that need. Industry and public interests thus align as do those of all buyers and sellers of essential goods.
Yet political rhetoric represents oil company purposes as fundamentally in conflict with public interests. It portrays the work of oil and gas companies as of interest only to the companies themselves. Usually, therefore, Congress impedes rather than promotes oil and gas work-to the enduring detriment of oil and gas supply. Public energy interests suffer accordingly.
Congress also needs to put alternative energy sources and conservation in better perspective than it has so far. Both of those goals deliver benefit and deserve to be encouraged. But they can in no way displace meaningful amounts of oil, gas, or coal-especially in a market that will expand as long as the economy grows. Unrealistic hope for alternative energy and conservation too frequently keeps Congress from acting to boost supplies of oil and gas, from which the supply potential is orders of magnitude greater and the costs of which are much lower. Lawmakers should pursue economically sensible alternatives and conservation as policy aims undertaken in addition to, rather than instead of, optimum use of domestic fossil energy supplies.
Solving problems
Above all, Congress should approach energy as a challenge to be addressed rather than a deal to be made. Energy policy-making should not be, as it became in the omnibus energy bill, a contest of favors among commercial interests. When that happens, consumers lose, and energy politics becomes seriously suspect.
Last year, consumers needing steady supplies of affordable energy instead got tax-subsidized ethanol and slander of oil companies. This year, Congress has much to repair, including its credibility in a vital area of national policy.✦
