John Kostrzewa: Someone needs to light a fire under U.S. energy policy

www.projo.com 01/26/2003

Here we go again.

The cold snap has pushed oil prices to two-year highs, raising heating bills and the cost of doing business.

Prices have spiked because of the huge demand for energy this winter, the possibility of a war with Iraq, which would disrupt the flow of oil from the Mideast, and a strike in Venezuela that has shut down refineries.

If that sounds familiar, it is.

Each time during the last 30 years -- when consumers and companies have complained about rising energy costs -- they have been given the same answer.

We are too dependent on foreign oil.

And these days, we are more reliant than ever.

In the early 1970s, when the Arab oil embargo caused gas shortages, long lines at the pumps and the realization that the United States was vulnerable to the Organization of Petroleum Exporting Countries, U.S. oil imports totaled 35 percent.

Today, imports have soared to 56 percent of the oil used annually in the United States.

Some changes have been made since the last crisis to diversify where we get our oil.

But now, three of this country's prime sources of oil -- Venezuela, West Africa and the Mideast -- are in turmoil.

That turmoil pushed the price of a barrel of oil to $35 last week for the first time in years. Home heating oil is at an average of $1.54 a gallon, up 32 cents a gallon from a year ago, and it is forecast to go higher

To reduce reliance on foreign oil, President Bush has set out a plan to search for new domestic sources.

He is following the path of his predecessors who also failed to push for a comprehensive, national energy policy that would cut consumption and encourage alternative energy while looking for new sources of oil.

Mr. Bush's policy

would tap new sources on land previously off limits. It provides tax incentives for new oil and gas drilling in the United States by opening the Arctic National Wildlife Refuge and more public lands in the Rocky Mountains.

There is little in the president's plan to encourage conservation or alternate energy sources, such as wind, sun or fuel cells.

The Senate last year killed the president's proposal for new drilling after fierce opposition from environmentalists and Democrats. But after Republicans took control of the Congress in the November elections, it has come back to life.

Sen. Pete Domenici, R-N.M., the new chairman of the Senate Energy Committee, said the measure could get to the Senate floor in March or April, perhaps attached to a spending bill.

Domenici said the Senate can't develop an energy policy on its own that includes energy conservation measures until it weighs how much more oil and gas might be produced in the future.

Vice President Dick Cheney, an architect of Mr. Bush's energy policy, said conservation is an admirable act of an individual, but had little relevance to national energy policy. He said the national policy has to concentrate on providing energy, not doing without.

Yet, conservation helped the United States cut its energy use growth rate after the embargoes in the 1970s.

And more recently, Californians eased their energy crunch -- after the failure of the state's deregulation plan -- by markedly reducing the demand for electricity.

Other energy initiatives from Mr. Bush leave a mixed message

While his administration has indicated it wants to push for new fuel-efficiency standards for automobiles, the president's $600-billion tax-cut plan includes incentives for business owners to buy gas-guzzling SUVS.

While Mr. Bush's policy seems less than comprehensive, there are national leaders trying to craft a substantive, centrist approach that balances energy use and environmental concerns.

They have formed a group called the National Commission on Energy to "make progress on the touchy issue of the nation's growing dependence on imported oil without screwing up our economy," said John W. Rowe, commission co-chairman.

Another goal, according to S. David Freeman, author of a Ford Foundation report on energy use, is to "have an energy supply without having to go to war to make it work."

The group includes energy policy planners from the administrations of George H.W. Bush and Bill Clinton and experts who represent industry and environmental advocates.

"There really hasn't been an energy policy in this country for 30 years," said Hal Harvey, an officer for the Hewlett Foundation, which is helping to pay for the commission.

"The cost of the absence of one is staggering."