Power Cuts

Edward Luttwak

The United States could produce energy far in excess of its needs, yet President Bush promotes his energy policy with dramatic urgency. The Bush White House opposes any government interventions in the economy, yet a ‘national energy policy’ – by definition – flatly contradicts all its free market principles. This paradox is easily explained: the United States is now unable to exploit its vast potential for energy production because of an entanglement of legal obstacles, some created and defended by private recourse to the courts, some legislated by Congress, some imposed by the regulations of past Administrations. There is enough coal to generate all the electricity that America consumes – and will consume for centuries to come – but open-cast mining and coal-generated power are both severely restricted for environmental reasons, while the private legal resistance of local residents along the way stops the construction of new transmission lines. Reserves of natural gas are not quite so huge, but the fact that by 2100 today’s wells will be exhausted is not the cause of the current scarcities in many parts of the country. Again, the reason is the near impossibility of obtaining the consent of every local jurisdiction and every affected resident to lay new long-distance pipelines. As for nuclear generation – the only energy source that emits no gases into the atmosphere – two decades of advances in reactor safety remain on paper, because nobody can invest in new generating capacity so long as private legal action by the anti-nuclear lobby can block any project for years and years. Oil reserves, finally, are in sharp decline in part because drilling is prohibited in most of the most promising geological formations, from offshore Florida to the Arctic National Wildlife Refuge in Alaska. Even imported oil cannot entirely fill the gap because of legal obstacles to the construction of new refineries and product pipelines. What has already happened in California (an absolute shortage of electricity) and in Chicago (record high petrol prices) will happen elsewhere if present trends continue.

That is how the Bush Administration evidently sees the problem, for 99 per cent of its ‘energy policy’ is in fact legal policy – a broad attack on Federal, state and local environmental laws and regulations, on the right of private groups to challenge energy projects in the courts, and most remarkably, for Republicans especially, on the rights of owners of land or buildings that stand in the way of pipelines or transmission lines: such people are to be expropriated if they refuse to sell at a fair price. Nothing must stand in the way of more energy production and consumption, not even sacrosanct property rights – and certainly not conservation. Vice-President Cheney has ridiculed the very idea, while the former oilman from Midland, Texas now in the White House is notably unenthusiastic. Twenty years of technological advances in automotive engines have been negated by the increasing size, weight and horsepower of the vehicles that Americans drive, many of which are now ‘light trucks’ – powerful 4x4s that could be used to cross the Sahara but are mostly seen cruising around suburbia. Yet Bush has refused the opportunity to extend fuel efficiency norms to light trucks, and proposes only a tiny subsidy for the new breed of hybrid cars that drastically reduce fuel consumption.

There is a provincial version of American culture that in Midland, Texas as elsewhere in the country revolves around energy-wasting ceremonials: the glacial air-conditioning of vast houses in summer (or their sub-tropical heating in winter), an insistence on grossly overpowered cars, and such things as the Florida craze for motorboats that burn more fuel per hour than many aircraft. Bush accepts it all without question – his own tastes are impeccably provincial – but there is more to it than that: now that the ‘new economy’ has withered, he and Cheney obviously believe that the rapid expansion of the energy industries could propel the next cycle of American economic growth. A Wall Street boom in power-generating companies has already started.

The Democrats in Congress will have many opportunities to resist the Bush programme – especially now that the Republicans have lost their Senate majority. It requires a mountain of legislation, mostly to abolish or whittle down existing laws. The environmental lobbies are receiving an unprecedented flood of donations (Bush is far better for them than Clinton ever was) and they will try to stop almost every change proposed by Bush. But there is no sign of any genuine opposition to the idea that more production for more consumption is the only possible answer. Given today’s colossal waste, the potential of conservation is equally huge – the United States could even become an oil exporter once again. But effective conservation would require gasoline and other fuel taxes that no politician dares to propose (the Democratic leaders in Congress are actually calling for energy subsidies). In fact, even environmental lobbies shy away from the one measure that could really make a difference – it would offend their contributors. As it is, drivers around the world pay twice as much for their petrol as the Chicago drivers who are now outraged by two dollars per gallon prices. The same is true of American electricity and natural gas prices – even in California, even after the latest increases, they are still low by world standards. So long as the power of the market to restrict demand is not harnessed to impose conservation, there will be none – and no alternative to the Bush programme of more production for more consumption for ever and ever.