US President George W. Bush doesn’t know how much gasoline Americans should use. US senators and congressional representatives have no supernatural insight that the president lacks on this subject and thus don’t know how much gasoline Americans should use, either. Yet Bush has advanced his plan for cutting US gasoline use by 20% in 10 years, and lawmakers are debating tactics rather than the merits of national consumption targets.
To be sure, the president’s goal, announced in his state-of-the-union address in January, is vacuous. What makes 20% below some random baseline a reasonable objective?
Unpredictable mixture
The appropriate level of gasoline use 10 years from now will reflect an unpredictable mixture of influences including, but not limited to, economic activity, personal incomes, vehicle purchases between now and then, the cost of transportation not fueled by gasoline, end-use costs of alternative motor fuels, and the price of gasoline itself, which will depend on its own tangle of variables, including the price of crude oil. The president and his energy advisors have no valid way to forecast these complexities well enough to judge future consumption of gasoline. They have just picked a number and called it-by gosh-a national goal. That they can have done nothing more sophisticated than this raises a question: Which came first, the 20% target or the “20-in-10” slogan they’ve given their program?
In service to this mush, Bush issued an executive order calling on several federal agencies to cooperate on the implementation of mandates he announced when he set the gasoline-use goal. One of them would push the mandate for domestically produced renewable and other alternative motor fuels to 35 billion gal/year by 2017. Another would toughen corporate average fuel economy standards for cars and light trucks. In a clear indication of the priority this project is to receive, the agencies have until the end of Bush’s term in office to work out details.
To Democrats in control of Congress, of course, the program doesn’t do enough. Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) exposed the dark core of current energy policy-making when he responded to Bush’s executive order by saying, “The absence of any standards in today’s announcement is a reason why Americans will be looking to Congress for stronger leadership on energy policy.” The prevailing assumption in Washington, DC, must be that Americans want their government to tell them how much and what forms of energy to use.
Can this be so? Do Americans really want to surrender economic choice to arbitrary consumption targets? Do Americans want to spend more than they should on motor fuels whose lone supposed advantage is that they contain no petroleum? Is their misdirected anger at oil companies so intense that they’re willing to sacrifice freedom and wealth?
The problem, as Bush’s initiative and the responses it has provoked make clear, is that legitimate policy options are not now under consideration in the US capital. No one with any national attention is acknowledging the historically clear need to leave fuel choice, price, and consumption levels to the market. Instead, they’re arguing over cosmetics.
In the current environment, national leaders ignore market explanations for gasoline price movements in favor of repeatedly discredited allegations of unfair manipulation. In this environment, lawmakers waste public money on energy sources that might never be economic on their own. In this environment, loose talk about taxes and regulation poisons the climate for investment in energy infrastructure. In this environment, politicians appeal to energy security while refusing to allow oil and gas leasing of promising federal land.
National mistakes
This is the type of environment that breeds national mistakes on energy. It develops when leaders become arrogant enough to think that politics, with its compromises and tradeoffs, makes better energy choices than markets do. This has never been the case before. It’s not the case now.
But when energy leadership starts with the metaphorically challenged assertion that the country has an “addiction” to a commodity preferred by the market, anything can happen-little of it good.
