Oil Price

by Gregg Easterbrook | September 9, 2002

Remember in the winter of 2001, just after George W. Bush took office, when the United States was said to face an energy crisis? Remember the immediate aftermath of the September 11 attacks, when it dawned on us that Osama bin Laden is a Saudi and that most of the hijackers were Saudis, and yet the United States buys nearly one-quarter of its imported petroleum from the Persian Gulf--transferring at least $20 billion annually to the Saudi princes who encourage Islamic fanaticism? Remember when President Bush declared Iraq an "evil" state, and commentators noted that the United States buys $10 billion in crude oil from Saddam Hussein annually, subsidizing his weapons programs, sybaritic lifestyle, and repression of 20 million Iraqis? Remember when you read that U.S. domestic petroleum production continues to decline, meaning that unless something changes this country will grow ever-more dependent on Saudi and Iraqi oil? Remember when you read that SUVs are excused from the fuelefficiency standards that apply to regular cars and that this special favor to wastefulness explains why U.S. petroleum consumption, crude-oil imports from the Gulf, and greenhouse gas emissions are all trending in the wrong direction?

In the aftermath of September 11, here is what has been done about these issues: Nothing.

Since the attacks the United States has taken no action on any front regarding petroleum policy. Oil imports from Saudi Arabia continue unabated, with close to one-third of Saudi government revenues--meaning a large share of the financing of anti-American Saudi clerics and of anti-American, Saudi-backed madrassas across the world--funded by American oil revenues.

Individual petroleum firms have backed off somewhat on purchasing from Iraq, but only, as The Washington Post reported this week, because Saddam's corrupt brokers demand excessive kickbacks, not as a result of any new government policy. SUVs retain their special low-mileage standards. Domestic crude-oil production keeps declining, and exploratory drilling remains banned in the Arctic National Wildlife Refuge (ANWR)—the best hope to find an "elephant," or major new oil field, in the United States. Greenhouse gas emissions continue to rise—up 14 percent in the last decade—with virtually all the increase coming from SUVs and residential energy use, not industry. The only energy-policy advance in the past year is congressional approval to open the Yucca Mountain atomic-waste storage facility, which ensures that atomic power plants will continue operating. But no one claims that the Yucca Mountain decision, in the works for one decade, was a response to September 11.

Energy policy has reached such an impasse that Congress hasn't even passed the 2002 energy bill, which would have set energy policy, though all contentious provisions have long since been expunged. The Senate debated the bill off and on throughout the winter and spring, staging various publicity-oriented showdowns but then putting off the House-Senate conference needed to enact anything. The World's Greatest Deliberative Body seems to feel that when it comes to energy policy, what the United States needs now is no change at all. How reassuring!


THERE IS PLENTY of blame to go around. Bush and his White House are terrified of the political consequences of action against global warming; though in the short-term the principal greenhouse reform would be to improve the efficiency of fossil-fuel use, which would reduce U.S. dependence on Persian Gulf imports—making such an action worthwhile even if the climate were not a concern. Early in his presidency, Bush asked the National Academy of Sciences (NAS) for advice on what to do about SUV miles per gallon (MPG). After the NAS inconveniently presented the case for higher standards, Bush waffled, venturing only that the Department of Transportation should "begin rulemaking"—which may take years—rather than supporting any of the fuel-efficiency improvement proposals that as a result died in Congress.

For their part, Democrats are equally committed to inaction. In March a fuel-efficiency deal brokered by John Kerry and John McCain was poised to come before the Senate. It would have required that new American autos reach an average of 36 MPG by 2015, a goal called realistic by the NAS, and would have dropped special treatment for SUVs. (Currently, new SUVs are allowed to average about seven miles per gallon less than new regular cars; real-world averages for SUVs are lower still. Partly as a result, average new-vehicle fuel efficiency in the United States is today at the lowest point in 22 years.) The McCain-Kerry approach would have reduced petroleum use and greenhouse gases in a sensible, technologically feasible manner, while making roads safer by discouraging production not of medium SUVs such as the Ford Explorer but of ultra-heavy, antisocial vehicles such as the Ford Expedition and the General Motors Hummer, which today constitute rolling threats to public safety.

Worried that McCain and Kerry would accomplish actual reform, opponents hurriedly brought forward a Senate amendment that essentially banned any immediate increase in SUV MPG, and it passed with only 38 votes against it. Since on this resolution a "no" vote was a vote for fuel economy, this means only 38 members of the United States Senate—and only 31 of 50 Democrats—favored immediate MPG improvement. Because oversized vehicles are Detroit's most profitable vehicle type—owing partly to an import protection that lives in violation of free-trade rules—the United Auto Workers (UAW) and Democrats from UAW states joined conservatives in an unholy alliance to oppose progress on fuel efficiency. So much for the public sacrifice in the national interest that was supposed to reign after September 11.

Another reason many Democrats were lukewarm on improving gas mileage is that the enviro lobby granted them a virtual free pass on this issue. Enviros lobbied with white fury against anwr drilling, their key move coming when the League of Conservation Voters told members of the Senate that this year's rating in the League's influential voter scorecards would essentially be determined by their anwr votes. But after carpet-bombing Congress on anwr, enviros lobbied only modestly on the MPG issue. Why the difference? No one can be sure. But anwr drilling is both a pleasantly symbolic ideological issue and, since 99 percent of donors to environmental groups don't live in Alaska, can be defeated without personally affecting most environmentalists in any way. On the other hand, there are plenty of environmentalists and enviro donors who drive big SUVs--especially the gasguzzler-loving elite of Hollywood. Had a higher MPG standard been enacted, some environmental donors might have had to make a lifestyle change rather than just demanding change from others.

And what of an ANWR/MPG compromise? This magazine (see "Over a Barrel," August 20, 2001) favored both expanding drilling in Alaska and requiring higher vehicle fuel economy, a middle-ground compromise that would have reduced America's addiction to Gulf oil, diminished the economic power of Gulf-state fanatics, cut greenhouse gases, and kept petroleum-production jobs at home rather than outsourcing the work to Saddam. An ANWR/MPG compromise would have required both sides to surrender some ideology and recognize the other side's reasonable arguments. And so the idea went absolutely nowhere. In fact, only three members of the United States Senate endorsed both ANWR drilling and higher SUV mileage. Below is the honor role; it won't take you long to read:

Daniel K. Akaka (Democrat-Hawaii)
Judd Gregg (Republican-New Hampshire)
Daniel K. Inouye (Democrat-Hawaii)

Three total votes for common-sense energy progress.

Sometime this fall an energy bill will probably pass, but it will consist of crumbs, symbolic gestures, and various special favors to the connected. The bill will be widely touted as containing incentives for wind power, renewable fuel, and other desirable improvements; but such incentives have already been in law for 20 years, and "green" energy still accounts for only about 1 percent of all U.S. power. The real answer is to reduce Gulf imports, restrain oil waste, and increase domestic exploration. We've had one year since September 11 supposedly shook us out of complacency. And we haven't even started the job.

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This article originally appeared in the September 9, 2002 issue of the magazine.

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