- The Washington Times - Sunday, December 29, 2002

Denny Jones doesn't believe that America is facing an energy crisis. Neither does Corina Bouzghaia. Both recently were getting their cars' oil changed at CXL (the Grease & Oil Doctors) in Alexandria. His is a 2001 Nissan Pathfinder, one of three cars he owns. Hers is a new Plymouth Neon, and her husband drives the family's Chevy minivan.
"We were paying $1 a gallon for gas two years ago, and that was a bargain compared to what people pay in Europe," said Mr. Jones, a semiretired government contracting consultant who uses his car for occasional trips to work and weekly golf outings with his friends.
"It's about what I expect," he said of current gasoline prices now about $1.50 a gallon. "Sometimes it seems like a lot, especially when I get my American Express bill each month," he said with a chuckle.
Mrs. Bouzghaia, a customer service representative at Chevy Chase Bank, said the cost of gasoline is biting into her family budget. "But it's necessary. Otherwise, how are we going to get to work?"
Whether fuel is considered a luxury or a necessity, most Americans are more than willing to make room in their monthly budgets to pay for what they need to power their busy lives.
Few doubt the importance of energy in America. But with consumers ambivalent about the cost of energy, the momentum has slowed for President Bush's call for a new comprehensive energy policy.
But that momentum could shift again this winter as home heating bills rise, and as the nation edges closer to war with Iraq. Oil prices are heading up again, breaking through the $30-per-barrel mark for the first time in six months on concern over war and a national a strike in Venezuela that has crippled its oil industry.
Prices for gasoline and other forms of energy are currently stable, but that was not the case when Mr. Bush took office two years ago. Prices at the pump were approaching $2 per gallon and higher in parts of the Midwest. Californians were facing rolling blackouts as their electricity bills skyrocketed.
The September 11 terrorist attacks and the accounting scandal at energy giant Enron Corp. added fuel to Mr. Bush's call for a new strategy for dealing the nation's energy problems, from finite supplies of fossil fuels petroleum and coal to aging systems of delivering fuel to customers.
The most powerful nation in the world depends on some not-so-friendly countries for the crude oil needed to make gasoline. And America's voracious demand for electricity to power ever more homes, businesses and electronics is putting a strain on the nation's electricity grid.
Mr. Bush and his allies in Congress and the energy industry have called it a national crisis. For two years, the administration and its pro-energy coalition have lobbied hard for more energy so Mr. Jones and Mrs. Bouzghaia, and tens of millions of others like them, can maintain the active lifestyle of a 21st-century America.
Although most lawmakers agree on the importance of energy, developing a set of laws to preserve the national lifeblood is quite another matter. Congress is split though not necessarily along party lines on what the solutions should be, or even what the problems are.
"If you're talking about an overall shortage of energy, we don't have a problem," said Pietro Nivola, a senior fellow at the Brookings Institution. "If we allow prices to operate as they should without interfering, as prices firm up, there will be more conservation and production."
Some have accused the Bush administration of fomenting the notion of a national energy crisis to gain public support for energy proposals that favor industry.
California decided in 1998 to partially deregulate the state's electricity utility industry, hoping to create a competitive marketplace that would provide reliable energy at competitive prices. The opposite happened. Electricity prices skyrocketed in the summer of 2000, leading to rolling blackouts in parts of the state.
At the time, the Bush administration pointed to the situation as evidence that the nation needed a new energy plan.
"When the national energy plan was posed, the lights were going out in California," said Amory B. Lovins, chief executive of the Rocky Mountain Institute, an energy policy think tank. "The president said we're running out of energy, but trying to equate California electricity with the nation's demand for oil has caused great confusion."
In August, the Federal Energy Regulatory Agency began an investigation into claims that a number of energy-trading companies such as El Paso Energy Co., Avista Corp. and Enron greatly exacerbated the California energy situation by choking back supplies and driving up prices for consumers.
Stalemate in Congress
Two years after Mr. Bush called for a new comprehensive energy policy, Congress remains deadlocked. Legislation to overhaul policy for the first time in a decade collapsed last month amid partisan fights over proposals such as Mr. Bush's plan to allow oil drilling in Alaska's Arctic National Wildlife Refuge (ANWR).
Support for an energy bill that was lost in the fall, however, likely will return this winter as the Republicans retake control of the Senate, where many of the administration's proposals have been stuck.
Crisis or not, there is broad consensus that the nation needs an energy strategy. Next year, Congress will have its best chance in more than a decade to agree on a new set of energy goals.
The shift in the Senate puts the Republicans back in control of two key committees: the Energy and Natural Resources Committee and the Environment and Public Works Committee. Sen. Pete Domenici of New Mexico, who is likely to chair the Senate Energy Committee, said he plans to restart the drive for energy legislation from scratch.
The Bush administration is pushing for more domestic drilling for oil and gas, particularly in the ANWR in northeastern Alaska and in public lands in the Rocky Mountains. It is also calling for more than $34 billion in tax incentives to help the energy industry and encourage the use of renewable fuels.
Leading Democrats in the Senate have renewed threats to filibuster any energy bill that includes drilling in the ANWR. However, Republican leaders have hinted that they might insert an ANWR provision in the budget reconciliation bill, which requires a simple majority of votes for passage and cannot be filibustered.
Energy groups are eager to restart work on the bill after two years of deliberations that ended in stalemate.
Critics of the Bush plan say it leans too heavily on producing more energy and does little to encourage conservation.
These critics, mainly Democrats and their environmentalist allies, see America's energy situation in a starkly different light. The problem is not a lack of secure and abundant supplies, but rather that the nation continues to rely too heavily on fossil fuels that pollute the environment. And while the United States has enough coal for hundreds of years, it depends on other countries to support its growing demand for petroleum.
Energy appetite
The United States is by far the largest consumer of energy in the world. The average U.S. household consumes about 101 million BTUs (British thermal units) of energy each year, according to the Energy Information Administration.
American consumers and businesses require millions of barrels of oil per day, millions of tons of coal and massive amounts of natural gas, nuclear fuel, and even solar and wind power, to function. And the United States is going to need more energy as the population grows and industries expand.
The challenge is that energy needed to support future growth will far exceed the amount the United States can produce on its own. Over the next 20 years, growth in U.S. energy consumption increasingly will outpace U.S. energy production, according to the Department of Energy.
The United States produces about 75 quadrillion BTUs of energy, but consumes 100 quadrillion BTUs. After a century of aggressive exploration and production, domestic production of fossil fuels is not expected to change much. But consumption likely will rise steadily to nearly 130 quadrillion BTUs by 2020.
The growing disparity between domestic production and consumption means that the United States will become even more dependent on other countries. Some of the major energy-producing countries are our allies; some, such as Iraq and Iran, are not. Many fear that such a dependence would leave the United States even more vulnerable than it already is to price structures designed by its adversaries.
An energy solution
The Bush administration's plan tilts heavily toward boosting domestic production of petroleum and electricity while encouraging research toward developing alternative sources of power, such as solar, wind and hydrogen.
But the Bush team also has stepped up efforts to promote oil and gas production throughout the world, particularly in the former Soviet Union and Africa. The goal is to get enough production into the world marketplace to offset the power that Saudi Arabia, the world's leading oil producer, and the rest of OPEC, have over world oil prices. The Organization of Petroleum Exporting Countries produces about a third of the world's oil.
Mr. Bush has sought to forge closer ties with Russian President Vladimir Putin on energy matters. Russia, which holds the seventh-largest proven reserves of oil and is ranked third in total production, is eager to revive its oil industry, which fell into disarray after the collapse of the Soviet Union.
Russia says it can produce about 10 million barrels of oil per day, which is more than Saudi Arabia, the current leading producer, provides for the world. But many argue that the United States cannot find enough new reserves of petroleum, either domestically or abroad, to drive down the spot price of oil.
"The fundamental truth in world oil is that supply is driven by geology, geography and the cost of production," said Laurent Ruseckas, director of Caspian energy at Cambridge Energy Research Associates.
"Countries that have a lot of oil that is cheap to produce have market power. The only thing that will change this is moving beyond oil."
It is expected that sometime in the century, perhaps in the next 50 years, that world oil production will begin to decline. When that happens, the price of oil likely would begin to rise, never again to fall.
Apart from supply-and-demand issues, there are environmental concerns. Burning fossil fuels releases pollution in the form of greenhouse gases into the atmosphere. Many scientists say that continued burning of fossil fuels is causing global warming.
Other sources
Though demand for oil continues to drive U.S. policy at home and abroad, more people are taking serious look at alternative fuels such as wind, solar and hydrogen power as next-generation alternatives to petroleum.
Some automakers already are looking beyond petroleum, trotting out new hybrid models such as the Honda Insight and Toyota Prius that boast higher mileage by using a mix of electricity and gasoline.
Researchers also are pressing forward with development of cars that would run using hydrogen fuel cells, which emit water vapor rather than carbon. The Bush administration added its weight to the push for hydrogen last year by announcing the FreedomCAR program to work with the Big Three U.S. automakers to develop hydrogen-based cars.
The program is Mr. Bush's replacement of President Bill Clinton's clean-car program, which was supposed to propose cars capable of getting 80 miles per gallon.
Critics of the Bush plan say the administration was simply bending to auto industry complaints that it would be too expensive to develop 80-mpg cars, vehicles that might not appeal to American tastes.
Further, while the Bush administration's support has boosted the prospects for hydrogen-based cars, some reachers say widespread use of hydrogen and many other alternative fuels will never happen unless the nation fully shifts its attention away from petroleum.
A recent study published in the journal Science found that none of the known alternate energy sources is technically ready to take the place of fossil fuels.
The study by 18 scientists and engineers in university, government and private labs evaluated technologies that would make energy without burning oil, coal or natural gas and found that no single system could replace fossil fuels, based on the present level of development.
"What our research clearly shows is that scientific innovation can only reverse this trend if we adopt an aggressive, global strategy for developing alternative fuel sources that can produce up to three times the amount of power we use today," said Martin I. Hoffert, a professor of physics at New York University, one of the lead researchers.
Mr. Lovins, of the Rocky Mountain Institute, argues that American can do more to save energy through efficiency measures than it can achieve by finding more petroleum.
"Saving oil is the fastest way to blunt OPEC's market power, beat down prices, and expand invulnerable sources of energy supply," Mr. Lovins said.

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