Suddenly, bipartisanship is back in fashion in Washington, DC. Since the general election of November 2008, bipartisanship has been the runaway spaniel of politics—something missed and longed for yet deemed unlikely to be encountered again. Election victories in 2008 by the liberal wing of the Democratic Party shooed the pooch. It emboldened White House Chief of Staff Rahm Emanuel to advise, soon after the election, "Never let a serious crisis go to waste…it's an opportunity to do things you couldn't do before." It evoked this famous slap-down by House Speaker Nancy Pelosi to critics of $825 billion in "stimulus" spending on a fat catalog of liberal causes: "We won the election. We wrote the bill."
Then, bipartisanship didn't matter. Now, as the liberal agenda implodes, it does. President Barack Obama has invited congressional Republicans to a "bipartisan summit" Feb. 25 to try to salvage health care reform. In another bipartisan gesture, he has offered to back construction of nuclear power plants. All Republicans have to do to earn this treat is agree to more support for economically hopeless renewable fuels and new taxation of fossil energy.
No one in the oil and gas industry should be fooled. Bipartisanship is bait-and-switch, a desperate tactic of the politically beleaguered.
Limitless cost
Indeed, bipartisanship set the US on its current course toward limitless energy cost. It was the core sales proposition of the Energy Policy Act of 2005 (EPACT). So smitten were energy interests, including oil and gas, by the spirit of bipartisanship—not to mention the chance to score a tax break here and there—that no one noticed the historic pivot the US made when former President George W. Bush signed the bill into law.
Because Democrats and Republicans had worked together to pass comprehensive energy legislation, it seemed not to matter that no one understood everything or even much of what the mammoth bill contained. What mattered was that political rivals had made deals and passed something not strictly the product of one party or the other. There were hugs and kisses all around. And when the party ended the US government was solidly back in the business of making fuel choices for Americans.
That was historic. Since then, energy policy-making has been a competition for public money, which politicians happily have dispensed with little regard for cost or proportionate contribution to energy supply.
One of the biggest boondoggles was the first-ever volumetric mandate for already-subsidized agricultural ethanol in vehicle fuel. Congress didn't set required volumes by considering market practicalities but rather by splitting the difference between what the ethanol lobby demanded and the American Petroleum Institute called acceptable. It naturally left to regulators the difficult chore of prospectively apportioning mandated volumes each year among numerous suppliers in an unpredictable market.
After Democrats took control of Congress, lawmakers in 2007 set a mandate for total biofuels, some not yet and maybe never commercial, more than four times the size of the 2005 mistake and much more complex and difficult to implement. For technical and market reasons, the elevated mandate will look increasingly unfeasible as it ramps up unless vehicle fuel consumption makes an unexpected growth spurt. But Democrats wanted to outdo the mandate passed, in the spirit of bipartisanship, while Republicans controlled things. So they did. And statutory failure looms. And Americans face increases in fuel costs and taxes. And Democrats are in political trouble. So they appeal to bipartisanship.
Arbitraging errors
With energy, Americans don't need bipartisanship. They need continuous and affordable supply of convenient and environmentally manageable fuel. A sensible approach to the subject should not be a defining position of one part or the other. Both parties can learn enough about energy at least to see that the government can't make fuel choices without creating unsustainable cost.
At present, because neither party approaches energy that way, compromise means arbitraging errors. Until Republicans and Democrats begin to calibrate energy ambitions to physical, economic, and market realities, bipartisanship will remain a shroud hiding too much spending on too little energy.
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