An opportunity is unfolding to restore discernment in energy politics as reality advances on two sources of confusion. One is the supposition that free people want governments to make their economic choices. The other is the preeminence of action on global warming.
That Americans want governments to stay out of their affairs has become evident in the fight over health care reform. The desire became manifest on Jan. 19 when Democratic Massachusetts elected a Republican to fill a vacant Senate position. President Barack Obama has been unable to acknowledge this disavowal of his priority initiative and, by association, aggressive liberalism. Continuing to insist that Americans simply don't understand his program, he now seems altogether disconnected.
Intellectually adrift
Presidential drift comforts no one. Obama must change direction. Too many of the ideas he has tried to force into policy rely on governmental solutions to individual problems. From that state-centered orientation flow a host of energy splurges, some of them potentially disastrous.
In collaboration with liberal Democrats leading Congress, Obama has fused energy to environmental and employment issues and exploited consequent distortions to assert control over markets. The policy levers include extravagant subsidization of noncommercial energy, increased taxation of oil and gas, and consumption mandates, all based on fanciful notions about energy independence, green jobs, and global warming. Until recently, in fact, the unbridled urge to act against warming all but immunized proposals for energy mistakes against questions about cost, scale, and workability.
But global warming's grip on politics has developed a twitch. The Intergovernmental Panel on Climate Change, eminent clearinghouse for climate science, is losing credibility. Problems began with disclosure of e-mails showing that scientists responsible for crucial data had manipulated results and marginalized opponents to promote aggressive regulation. More recently, claims in an influential IPCC report of 2007 about melting glaciers and vanishing rainforests have been refuted.
Worse than that for IPCC unassailability, the errors escaped peer review and, in at least one case, apparently traveled straight from an activist publication into IPCC proclamations about the state of science. Worse yet, after IPCC Chairman Rajendra Pachauri dismissed the mistakes about glaciers as unimportant, the Sunday Times of London reported that a research group he heads in New Delhi received funding to study the nonexistent problem.
None of this means the world lacks reason to worry about a build-up in the atmosphere of greenhouse gases. Global average temperature may yet turn upward again for reasons that probably include, to some still-uncertain extent, human activity. What serial scandals at IPCC mean is that the push for quick action at any cost flowed from science corrupted by politics. The science must be discounted. And the political agenda it propelled must be challenged. To reorient energy economies because of fear over global warming now would represent historic folly. Human activity has contributed at least as much to unwarranted fear as it has to warming.
One priority for the oil and gas industry, therefore, must be to disentangle climate change from energy policy. It won't be easy. Many energy interests are vested in drop-everything climate remedies. But reckless response, such as adoption of the cap-and-trade nonsense struggling in the US Congress, without a balanced assessment of global warming science would be irresponsible. The industry should say so.
Energy choice
The other priority must be to move markets back to the center of energy choice. That means pushing government away from energy the way Americans are pushing it away from health care. Lawmakers and regulators do not know best how much or what kind of energy people should use. Their decisions reflect political deal-making, not economics or physics. Political energy decisions too frequently prove wrong—such as the 2007 mandate to use more biofuel than the market can absorb and more biofuel from exotic feedstock than producers can supply.
Inappropriate meddling by government in the economy and preeminence of global warming in energy politics are under siege. They deserve the attack. The oil and gas industry would profit from their defeat. Its customers would, too.
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