HISTORY AND U.S. ENERGY STRATEGY

Viewed in proper context, the Bush administration's proposed energy strategy represents a sound, overdue initiative that the petroleum industry should support. It's not perfect. It might have aimed higher in some areas. But it should be assessed in terms not of what it omits but of what it would accomplish if implemented intact.

Feb. 25, 1991

3 min read

It also should be viewed in the context of recent history. For 10 years, an unwritten U.S. energy policy has let markets determine oil and gas prices and environmental and tax policies determine everything else, including domestic petroleum supply. The Bush proposal asserts that a free market energy policy-or strategy-can and should have as much to say about domestic supply as environmentalism and the tax code. It's about time. U.S. crude oil production has dropped to its lowest level in 30 years.

EXAMINE THE RECORD

Environmentalists are enraged. They wanted mandated conservation, not exploration of the Arctic National Wildlife Refuge Coastal Plain. They should examine the record. Modern drilling doesn't hurt the environment nearly as much as environmentalists claim that it does-if it hurts the environment at all. Drilling and production wouldn't ruin ANWR. Furthermore, the Bush administration last year foreclosed near term leasing of much of the federal offshore. Its new strategy calls only for lifting of congressional funding moratoriums on what's left-a very hopeful request. To leave ANWR unexplored would be to deny the country its last, best hope for discoveries large enough to significantly slow the production decline.

Energy strategy critics who demand more in the way of conservation, such as a gasoline tax ignore too much. They forget the 5/gal increase enacted last year. They forget Clean Air Act amendments that will hike gasoline prices-and reduce consumption correspondingly-very soon. And they forget past energy use efficiency gains, which make mandated conservation, such as vehicle fuel use requirements, look dangerously meddlesome. The Bush proposal doesn't forget conservation. It simply keeps it in perspective by not implementing it via tax or fiat and by not letting it crowd out efforts to boost domestic production.

Some industry critics of the energy strategy seem forgetful, too. They demand help but forget that tax laws affecting U.S. drilling and production have changed for the better within the past year. Subsidies are available and have been extended for some operations. The measures may not repair enough of the damage U.S. producers have sustained. But progress is progress. To oppose the energy strategy because it doesn't offer more is to risk losing everything it contains now.

In fact, it contains much. In addition to leasing ANWR's Coastal Plain, the legislative package proposes to deregulate oil pipelines, promote current efforts to restructure the natural gas industry, facilitate licensing of nuclear power plants, encourage use of renewable fuels in power generation, and-yes-improve energy use efficiency.

HISTORIC STEP

Critics who say the strategy wouldn't accomplish enough either haven't read it or expect too much. Sure, more OCS leasing would be welcome. Further repair of drilling tax disincentives would be nice. But no energy strategy can accomplish everything at once. Passage of this strategy's legislative package alone would represent an historic step for U.S. energy policy.

The choice for an already contrary Congress is clear: Will it take steps necessary to lift domestic energy production and enhance energy security? Or will it turn the energy issue into an excuse to further raise consumer taxes and dictate lifestyles?