TOO MUCH ENERGY CONSERVATION?

Energy conservation is a good thing. It deserves serious attention as Congress considers the Bush administration's proposed National Energy Strategy. But too much of this good thing would be expensive and wrong. Conservation is good until it extracts uncompensated sacrifice from individuals. Congress is rushing toward that extreme with proposals for energy tax hikes and tighter automobile fuel efficiency standards. It is being helped by calls for gasoline tax increases from oil company
April 8, 1991
3 min read

Energy conservation is a good thing. It deserves serious attention as Congress considers the Bush administration's proposed National Energy Strategy. But too much of this good thing would be expensive and wrong.

Conservation is good until it extracts uncompensated sacrifice from individuals. Congress is rushing toward that extreme with proposals for energy tax hikes and tighter automobile fuel efficiency standards. It is being helped by calls for gasoline tax increases from oil company chiefs ignoring the interests of their customers.

USING LESS ENERGY

The aim of most conservation measures under discussion is to use less energy. By using less energy, it is correctly argued, the U.S. might reduce its reliance on foreign oil and, therefore, on the volatile Middle East. But is it worth the price?

By definition, to use less energy means to perform less work. When a government orders its citizens to use less energy-or coerces them to use less by raising energy taxes and limiting vehicle size-it assigns a certain number of them to the unemployment roster. It is that simple. Cutting energy use for its own sake cuts economic growth and, therefore, jobs. When voters see behind the superficialities of the issue and recognize the potential costs of reducing energy use by fiat, conservation will become less of an unassailable political tenet than it is now.

It is nevertheless true that the country's current degree of reliance on foreign oil probably assigns a certain number of U.S. soldiers to duty in or near the Middle East. Belated recognition of the national security implications of oil import dependency is, after all, what created the current panic over conservation. It is also true that by using less energy, the U.S. would reduce its reliance on imported oil unless domestic production declined by the same amount or more.

The challenge, however, should be to reduce energy consumption without sacrificing consumer choice or economic growth. Patterns of U.S. energy use in relation to economic growth during the past two decades prove it can be done. Conservation should aim at using energy more efficiently-at using less energy to perform the same amount of work or more-and not just at using less energy for its own sake.

Conservation of this type, productive conservation, relies on free markets. But the government has a role, too. It can ensure that markets remain free. It can support research into technologies that improve energy use efficiency. It can promote exchanges of information on ways to work more and to use less energy in the process.

WATCHWORD: EFFICIENCY

In any government conservation effort, the watchword must be economic efficiency. Higher taxes and mandated lifestyle changes don't pass the test. They are serious and costly steps that aren't worth taking for the blind sake of reducing national energy consumption by some unspecified degree. Congress certainly should not tamper with Americans' freedoms and pocketbooks in the name of reducing oil imports before it has done everything possible to boost U.S. production. Instead, it has so far refused to make the country's most prospective federal land available for lease and enacted tax laws that discourage drilling investments.

The U.S. does not need more conservation or more domestic production. It needs both. And it can have both without throwing people out of work, compromising individual choice, or limiting personal mobility. It would be nice to think that preservation of these tenets, which should be unassailable, had something to do with why U.S. soldiers just fought and died in the Middle East.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.

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