COSTLY U.S. ENERGY POLICY TAKING SHAPE

It will come as news to no one that symbolism figures heavily in governance as practiced by the administration of U.S. President Bill Clinton. In energy policy, symbols are now zinging off walls and ceilings.

April 26, 1993

3 min read

Governments make important symbolic points with budgets and appointments. The Department of Energy fiscal 1994 budget, for example, tilts heavily toward "energy efficiency programs." Of $3.9 billion in nonnuclear spending, $788 million will go to this noble purpose, up $205 million from the year before. What is there about energy efficiency, someone might ask, that requires the expenditure of three quarters of a billion public dollars? But the question misses the point. The point is how much the government cares about one thing in relation to another, as measured by dollars spent.

THE BUDGET MESSAGE

For research and development, DOE proposes to spend $327 million on solar and renewable energy ($250 million on solar alone), $196 million on natural gas, and $80.9 million on enhanced oil recovery. Symbolically speaking, this means the Government cares twice as much about gas and three times as much about solar as it does about oil. And it cares four times as much about energy efficiency as about gas. Get it? The symbols become explicit in this statement by Energy Sec. Hazel O'Leary: "By reinventing DOE, we are placing the emphasis on energy efficiency and conservation, renewable energy sources, gas utilization, and transfer of technologies from the labs to boost competitiveness, as well as several other beneficial research and science projects."

Over at the Federal Energy Regulatory Commission, meanwhile, the symbolism tilts toward consumers. The President's long-awaited FERC appointees are described as "proconsumer." The immediate task before these proconsumer appointees is to finish the gas industry's overhaul under FERC Order 636. Most gas consumers have no idea what Order 636 does or what FERC is. But they probably feel better knowing that there will be some proconsumer commissioners at work there.

What does all this symbolism say about Clinton administration energy policy? With one important exception, it says pretty much what the administration's fiscal proposals have said. Energy consumption is bad, oil consumption worst of all. The country needs to decrease its total consumption and replace some significant measure of its cheapest energy forms with the most expensive. And $788 million worth of programs will patch up whatever efficiency losses might result from these manipulations.

WHERE SYMBOLISM STRAYS

Symbolism strays from fiscal initiative in the area of consumerism. This administration wants to cut energy and especially oil consumption and will smash consumers in the face with a tax in order to do it. "If the tax is to effectively promote energy conservation," says Treasury Sec. Lloyd Bentsen, "it must be borne by the ultimate consumer. The administration is continuing to explore methods of assuring that the tax is in fact passed through to those who use the energy." Despite this clear statement of intent to wound energy consumers into consuming less, the administration is not above rigging collection of the BTU tax on gas so as to mask government's role in the assault. Local distribution companies will get the blame. It ought to make truly proconsumer FERC commissioners want to ask a question or two.

For their part, the gas and oil industries should be warning their customers about what lies ahead-and telling them whom to write if energy policy based on symbolic efficiency looks vexingly expensive.