By missing the point on energy policy, Congress is undermining the US economy.
The time should be ripe for constructive action. The US has just experienced energy shortage and the elevated prices that go with it. Pressure to act is strong. Yet Congress approaches the subject as though no one in office has learned from experience.
In present form, energy policy in the US is an unfocused patchwork of laws and regulations representing uneasy compromises between two contentious schools of thought.
To one of school of thought, energy has mostly to do with oil company profits, which are scorned, and environmental protection, which is venerated. Disciples of this doctrine aim to limit both energy prices and activities essential to energy supply.
To the other school of thought, energy relates mainly to national security. Arguments flowing from this view all aim to limit the amount of oil the country imports.
Both sides are misdirected.
Shrill demagoguery
Of the two, the antiprofit, environmentalist camp is the more destructive. It wildly exaggerates the environmental threats inherent in the production and use of energy. Its goals-low energy prices and limits on supply-conflict. And when oil and gas prices rise, members of this group resort to shrill demagoguery that makes sensible policy-making impossible.
The security camp pursues righteous objectives, especially policies that encourage domestic production of oil and natural gas and a strategic approach to energy. But hostility to imports is unreasonable in the modern market. US dependency on imported oil is an established fact, not something to fear and certainly nothing against which to leverage legislation. And assertions about "dangerous" degrees of dependency have proven to be more effective in arguments against petroleum consumption than in arguments for domestic production.
To improve energy policy-making, therefore, Congress needs to squelch the sophomoric revulsion some of its members harbor about oil company profits, get realistic about the environment, and orient policy-making less to security and more to the economy.
Concerning the economy, the US has lately received important lessons. It has seen, for example, that the energy-supply infrastructure works as a physical limit to economic growth. It also has learned that computers, however intricately networked, do not give the economy a whole new way to grow.
The run-up from which oil and gas prices are now subsiding occurred partly because economic growth pushed energy consumption against physical limits of supply. It was a warning. The US needs more oil and gas pipelines, more and larger import terminals, and more capacity to refine crude oil and generate electricity. Policy should address those needs.
The promise of renewable energy is no excuse for inaction in this area. Government support for renewables is proper. But it must not be based on the supposition that nonhydrocarbon energy can fuel the American economy. It can't. The need for energy is many orders of magnitude greater than the most hopeful projection of supply from renewables. If future economic growth is to extend beyond the latest peak, policy must allow the system for supplying conventional energy to grow as well.
And if the economy is to recover from its current doldrums, policy must elevate growth factors more substantial than stock-market exuberance over dazzling technologies. A classic path to growth is development of natural resources.
Foreclosed potential
Yet policy remains hostile to development of the oil and gas resource. Moratoriums remain in place off the East and West coasts. Energy-needy Florida has persuaded the Department of the Interior to proscribe the leasable area of the Outer Continental Shelf in the eastern Gulf of Mexico. A hint of industry interest in hydrocarbon potential of the Great Lakes prompted an immediate ban on leasing. And a House initiative to allow leasing of the Arctic National Wildlife Refuge coastal plain stands little chance of survival in either house of Congress. Incentives for deepwater and marginal production are just consolation for a hobbled producing industry.
Having foreclosed all that economic potential, Congress now busies itself with trifles such as fuel-economy standards for sport utility vehicles.
Meanwhile, the economy sputters. Lawmakers need deeper appreciation for the connections between national energy and economic interests. Until they have it, the making of energy policy will remain little more than a political rabbit chase.
