A CURE FOR ENVIRONMENTALIST FEVER
Environmentalist fever isn't a bad thing. It has nagged institutions and individuals into making necessary changes they wouldn't have made otherwise. Procedures, as they relate to the environment, have improved. So have personal habits and values. U.S. air and water are getting cleaner.
But Congress and the Bush administration are brewing a sure cure for environmentalist fever. One item at a time, they are assembling the ingredients of recession. The oil industry should be crying malpractice.
INGREDIENTS OF RECESSION
The Bush administration forecloses exploration of most Outer Continental Shelf frontiers. Wilderness controversies shrink the accessible onshore petroleum resource. Future domestic supply suffers, which means imports of crude oil and petroleum products must continue to grow.
But now the U.S. limits imports, too. Congress declares international tanker liability protocols insufficient for its pristine purposes. Major shippers decide it's too risky to enter U.S. ports. The result must be increased activity by small-possibly less responsible-shippers, or import reductions, or both. U.S. shipping operations will cost more than before, and future deliveries from abroad will suffer. In these ways, government constricts supply from domestic and foreign sources alike and all but guarantees higher prices.
Current proposals would increase the pressure on future prices. The Clean Air Act bill would raise motor fuel production costs. And a gasoline excise hike remains a pet plan for the tax increase some officials crave.
Taken in isolation, all these measures have sound supporting arguments. Drilling should be precluded in some waters and woods. Tanker spills do threaten U.S. coasts. Air and water quality problems persist in some areas. The federal budget deficit must be brought under control. The U.S. should use energy more efficiently.
But each measure goes too far. Each-even the gasoline tax hike to the extent it draws support on the basis of energy conservation-reflects a government overreaching because it's consumed by environmentalist fever. And taken together, the measures promise recession and human suffering.
By pinching petroleum supply and raising fuel production costs, the U.S. government has built the framework for the next energy price shock. Extremists approve. They say anything that reduces consumption of petroleum helps the environment, which is all that matters. Their position is absurd. But even nonextremist Americans, who love to hate themselves for the energy they consume, seem undisturbed by prospects for a quantum leap in energy costs. Their apathy is alarming.
THE ENERGY APPETITE
Americans inhabit a populous country with large traveling distances. They participate in an economy that, by world standards, remains vigorous even in recession. Unless they surrender mobility and make major sacrifices in economic vitality, they will always consume large amounts of energy. The goal should be to consume the most-economic energy as efficiently as possible.
Supplies squeezed by government action and costs raised by regulatory overkill don't pass the economic and efficiency tests. The U.S. doesn't need to quit consuming fossil fuels; it needs to find cleaner ways to use them. It doesn't need to save the planet; it needs to finish cleaning its air and water and to support similar efforts elsewhere. The government should seek sound solutions to environmental problems; it should not impose life changing energy price shocks in response to nonexistent crises. Recessions serve no worthy cause-least of all environmentalist fever.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.