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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

19 April 2006

Think small on energy

The obsession with alternative energy has morphed into an obsession with alternative reality. There is no managed transition to cleaner fuels, just a desire to get there; whatever fuels we use today—oil, gas, coal, nuclear—are all bad. America needs secure energy, we are told, but no plan is good enough—no new LNG terminals, no drilling in ANWR, no nuclear power plants. The universe of renewable and affordable energy is there for us to grasp, if only the government would pass the right laws, laboratories researched the right technologies, OPEC could be broken apart, America could stop importing so much oil, and oil companies ceased to be so greedy.

This narrative is becoming increasingly convincing, particularly among Democrats, though populism against “Big Oil” is party-blind. New Jersey’s two senators, Frank Lautenberg and Robert Menendez, want the president to bring action against OPEC members who belong to the World Trade Organization for inhibiting commerce. The Federal Trade Commission, the same senators say, should “hold the big oil companies accountable for their actions against US consumers.” Senator Charles Schumer (D-NY) wants the FTC to investigate whether refineries are creating an artificial shortage to make profits. And Senator Maria Cantwell (D-WA), along with fifteen other senators, says America needs “a tough law that prevents profiteering in the oil and gas industry.”
There is truth, no doubt, in these concerns—to be in the WTO and maintain quotas in crude oil exports is duplicitous. What is disconcerting, however, is the growing inability to have a realistic discussion about energy. False myths pervade the debate, as does an unrealistic faith about how to escape America’s energy predicament. Energy independence seems to be the consensus, but there is no blueprint to achieve it. And even if energy independence were possible, it would still be a bad idea, serving only to blur productive discussion on energy policy.

At its core, energy independence is a form of energy isolationism. Get things right in America, it whispers, and all will be good. But follow the dreamers’ logic and theirs is a dead-end. Strike out oil and gas, replace it renewable energy, and the Middle East is still a place where America will have interests; it will still need to maintain stability; will it let China or India take the lead; could it risk the global recession that would ensue if a regional war were to break out? American foreign policy in the region has taken forms, mostly unrelated to the precise number of oil barrels consumed. Its foreign policy ends are reflected in its perception of its role in the world; its foreign policy means mirror its faith in the tools of statecraft: diplomacy, coercion, war.

America’s power projection in the Middle East may have been imperfect—September 11 showed that much—but at least it recognized that policy was subject to immutable laws, to inescapable trade-offs. Deplorable as many find the bargain that America made with Saudi Arabia, its premise was that the American economy and way of life would be threatened if Saudi Arabia fell either to the communists or to religious extremists. There was a cost and a benefit, even if the magnitude of both can only be revealed in hindsight.

It is these tradeoffs that contemporary discussions try to avoid. Saudi Arabia and Kuwait need to invest more, they are told; but then the president pledges not to consume their oil. China is blamed for its guzzling demand, yet when it tries to expand the supply of oil by going to places Westerners avoid, it is blamed still for supporting unsavory regimes. Congress mandates ethanol use and then refuses liability protection for MTBE; when the predicted shortfall in gas increases prices, refineries and oil companies are targeted for blame.

Energy policy in this country has suffered from big ideas. A step in the right direction is rejected because it is not a leap; the dream is for all problems to be solved at once or not at all. There is no nuance, no subtlety, no priority. Energy geopolitics is nasty and difficult to deal with as it is. Wishing this wasn’t so makes it no less nasty and slightly more difficult. Stop obsessing about the energy of the future, and let us manage the energy of today. Let’s just do it a little bit better.

References:
Anne Applebaum, “Tilting at Windmills,” Washington Post, 19 Apr 06 (link); Nick Snow, “Democrats press Bush to act as energy prices increase,” Oil & Gas Journal Online, 19 Apr 06; “The Gasoline Follies,” Wall Street Journal, 28 Mar 06

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1 Comments:

Blogger Nikos Tsafos said...

This entry appeared on:
http://www.energybulletin.net/15147.html

10:04 PM  

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