Something for Everyone
From the December 1, 2003 issue: A grotesquely irresponsible energy bill nears completion.
Dec 1, 2003, Vol. 9, No. 12 • By IRWIN M. STELZER
The list of beneficiaries doesn't stop there. There are incentives to build a trans-Alaska natural gas pipeline; subsidies to cover the insurance costs associated with the production of nuclear power; tax breaks to encourage a bit more domestic production of natural gas and oil; handouts to the automobile companies to spare them the need to devote more of their own money to research into energy-efficient vehicles; $100 million per year in production tax credits for new nuclear plants; $6.2 million to promote the use of bicycles; $1 billion for a nuclear reactor in Idaho to produce hydrogen, and so much more that one is put in mind of the Stephen Sondheim lyric: "Something for everyone, a comedy tonight."
Except that it isn't really very funny. The president and Congress have missed a golden opportunity to do something about our large and increasing dependence on imported oil. Saudi Arabia, our second largest supplier after Canada, is teetering on the brink of chaos; Venezuela, our fourth largest supplier, is in the hands of a Castro sound-alike; Nigeria's production, our fifth most important source of imports, is periodically interrupted; Iraq, if and when it gets back into full production, has promised to rejoin the OPEC cartel that provides over 40 percent of our imports and that is now keeping prices above the growth-retarding $30 per barrel level; Iran's mullahs aren't eager to make it easy for us to buy oil from their large reserves should we ever want to do so; Libya isn't exactly likely to prove a friend in need; Russia is still a minor supplier, with an oil sector that has been destabilized by Vladimir Putin's jailing of one of his nation's "oiligarchs." And China is now a major competitor for any new sources of oil that might become available.
As a result, the American economy remains at risk of oil supply interruptions and price spikes that can stifle economic growth. Ask this: Should a radical terrorist group seek to depose the House of Saud, would we be in any position to stand idly by, or would we once again face the necessity of sending troops to the Middle East, in this case to secure the Saudi oil fields? We would, of course, do the latter. Understandably. But what is less understandable is our politicians' failure to initiate the programs that will in the long run reduce--not end, merely reduce--our dependence on foreign oil.
Rather than confront this problem by imposing a tax on imported oil, Congress and the president have responded by breeding an expensive pre-Thanksgiving turkey that will do nothing to satisfy the nation's appetite for imported oil. And the bill may be even worse by the time it passes. A threatened filibuster on Friday, November 21, as this magazine went to press, temporarily delayed the measure. But the Republican leadership in the Senate seemed confident that it would gather (read: purchase) the required votes. "There are lots of offers being made," said Maria Cantwell, Washington Democrat.
But it is not the expensive and useless provisions that the bill contains that should most trouble us. The major liability of this bill is not what it contains, but what it doesn't. It leaves our energy policy stuck where it has been ever since Presidents Nixon, Ford, Carter, and their successors talked the talk but failed to walk the walk towards a sensible response to our dependence on imports. We continue to rely on aircraft carriers and troops to assure adequate supplies of oil to fuel our cars and heat our homes. No photo op of a smiling president, pen in hand, surrounded by the grinning authors of this senseless legislation, can conceal that shameful fact.
Irwin M. Stelzer is a contributing editor to The Weekly Standard, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times (London).