- The Washington Times - Friday, November 3, 2000

Energy policy is emerging as a defining issue in the presidential election campaign. And no wonder: Gasoline prices touched $2 a gallon last summer; home heating costs are about to double in many markets this winter; electricity prices are rising in most regions, except perhaps in the Midwest where coal and nuclear power produce most of the electric energy.

As public protests in the United States, and especially in Europe, have demonstrated, energy users and this includes virtually everybody are outraged about higher prices, are not fobbed off by scapegoat excuses like OPEC and "Big Oil," and are beginning to ask hard questions of their political leaders.

Texas Gov. George W. Bush has great credibility based on his former experience in the energy business. His attack on the policy (or absence of policy) of the past eight years would carry considerable weight. On the other hand, Vice President Al Gore is rightly perceived to be anti-energy not only opposed to fossil fuels but also to nuclear energy, as are most environmental activists.

His book, "Earth in the Balance," certainly betrays his position against the use of energy and for cutting economic growth. It calls for high energy prices to discourage consumption; it is a recipe guaranteed to cause misery, especially among low-income families. His support for the Climate Treaty and the Kyoto Protocol is well known; many now realize it would mandate a 30 percent to 40 percent reduction in the use of energy within the next decade and impose a huge cost on the U.S. economy.

In such a debate, Al Gore will have a difficult time defending his policy positions against domestic sources of oil. The vast reserves of Alaskan oil, which he would shut in forever, could replace all imports for at least five years, and if fed into the already existing pipeline would guarantee safe import levels for many more years. Offshore oil from the East Coast and West Coast would add further resources. Yet to appease Green activists, Mr. Gore has promised that if elected he would cancel offshore leases already granted and paid for by U.S. oil companies. This is ironic, to say the least: The safest way to obtain needed oil is to bring it ashore by pipeline rather than from overseas by accident-prone tankers.

Added to these environmental advantages is the undisputed fact that lowering imports reduces the outflow of dollars and decreases our dependence on unstable foreign sources of crude oil. These arguments should be quite apparent to the American public.

The Clinton-Gore administration also failed to protect domestic production when the price of oil was low. Only a couple of years ago it had dropped to as low as $10 a barrel, about one-third of the current price, forcing the "shut-in" of much domestic production, as many of the thousands of "mom-and-pop" stripper wells became uneconomic. However, once shut in and plugged, these wells are unlikely to be reopened even when the price goes up. This oil will be lost forever, which certainly goes against the principle of resource conservation. We are paying the price for this neglect right now by having to import more foreign oil.

Added to these woes, U.S. refinery capacity is stretched to the limit; so even bringing in more crude oil will not alleviate supply shortages. Foreign refiners cannot fill the gap. The problem here stems from the Environmental Protection Agency: Extreme "clean air" regulations have stopped the building of new refineries, while at the same time requiring special compositions for gasoline for different geographic regions. EPA mandates for "boutique" gasolenes also means a shortage in one place cannot be made up by importing it from another region. Consumers in the Midwest learned this bitter truth earlier this year when gasoline prices rose sharply because of purely local supply shortages.

Finally, we have the Strategic Petroleum Reserve. The problem is that the administration doesn't know how to manage the SPR. It claims SPR releases must be reserved for emergencies. However, it has never defined what is meant by an emergency. Clearly, any supply interruption must raise prices, so one can define "emergency" in terms of price. Once this is done, the release of oil becomes almost automatic. But bureaucrats don't like to relinquish the power of decision-making to the market and want to reserve it for themselves. This leads to a predictable outcome: They make no decision at all and are reluctant to release any oil at any time. Yet, Mr. Clinton found it politically expedient to override their inertia by ordering a token release of 30 million barrels from the 571 million barrel stockpile, a mere 5 percent.

All these questions can properly be asked not only by Mr. Bush but also by the public. After all, we are the ones paying the bill for the past neglect of energy policy.



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