AUSTIN -- George W. Bush is threatening to give us an energy policy that marches militantly in exactly the wrong direction.
Bush's views on energy are still those of a West Texas oilman. He once ran for Congress from Midland because he thought Jimmy Carter was leading us toward "European-style socialism." What oilmen want for energy policy is Drill More.
At one point during a debate with Al Gore, Bush suggested we encourage
drilling in Mexico to lessen our dependence
on "foreign" oil. Startled the Mexicans.
In addition to Bush, who took three oil companies into financial trouble,
the new administration boasts Dick Cheney,
CEO of Halliburton; Commerce Secretary Don Evans, chairman of Tom Brown oil; and Condoleezza Rice,
a director of Chevron. Two of Bush's biggest donors are Ken Lay of Enron and energy player Sam Wyly,
who put up the money for the phony ad praising Bush's environmental record.
The first fight is likely to be over drilling in the Arctic National
Wildlife Refuge. Bush favors drilling in the ecologically
fragile area, as does his choice for interior secretary, Gale Norton. The object of all the drilling is to bring prices down
(not too far) so as to encourage consumption, thus causing us to use ever more fossil fuel. This is the totally backwards
way of going about an energy policy.
You can't get elected dog catcher in this country by advocating a sensible
energy policy, which would certainly include
slapping an additional tax on gasoline is order to discourage consumption. Even if that smart move is off the table
because of politics, one can still push for more fuel-efficient cars.
There is a plan already in existence to ratchet up fuel efficiency, but it has been on hold for years as automobile lobbyists successfully fought its implementation by Congress.
Spencer Abraham, Bush's pick for energy secretary, was one of the leading
players in the fight to put off higher fuel
efficiency standards. Abraham complied a zero rating from the League of Conservation Voters.
Americans use five times as much fossil fuel as the other people on
this planet on average, so of course we are
contributing the lion's share of carbon dioxide, which is what causes global warming.
Bush would rather not think about that. Upton Sinclair once wrote, "It is difficult to get a man to understand something when his salary depends on his not understanding it." The income of those in oil depends on their not understanding global warming.
Understandably, the industry has put a significant amount of money into a public relations campaign trying to convince people that global warming is not happening, or not happening fast enough to worry about, or needs more study. I suspect that someday -- before too long -- that campaign will be seen as the wickedness it is.
The other part of the looming energy crisis was caused by the stupid deregulation of utilities industry, and don't say I didn't warn you. Bush supported deregulation in Texas, and if his plan had been passed, Texas would be in as bad a shape as California, which deregulated only wholesale prices. We passed a more progressive version of deregulation, no thanks to Bush.
The dereg movement is not working -- the new market-based system has not produced needed generating capacity, and those who own the power plants are ripping off everyone else.
Economist Paul Krugman points out that the problem is underinvestment, and "part of the reason for that underinvestment was the excessive enthusiasm of the financial markets for all things tech: when digital businesses are valued at hundreds of times earnings, while utilities have multiples more like 10, who's going to put money into boring things like generators and transmission grids?"
The usual "leave everything to the magic of the marketplace" crowd needs to take another look at the consequences of deregulation. The same power companies that failed to make the badly needed investments are now making money out the wazoo. Some marketplace. Some magic.
The reason that the utility industry was regulated in the first place
is because it's a natural monopoly, and experience with monopolies indicates
that you have to regulate the things. This is one of those deals, like
the S&L mess, when you want to
go back and check who pushed the ill-advised plan and what promises were made. (More energy! Cheaper rates! Pie in sky!) You would be well-advised not to listen to those same players again.