There’s a reason I don’t write about the intricacies of energy policy. It is very similar to my rationale for not delving too deeply into debates about macrobiotics, women’s lacrosse, or the fall line-up for the WB. In short, my reluctance stems from a rich interplay of my own personal ignorance, boredom, and sheer principle. Energy policy, like tax policy, is very, very boring when it comes to the details.
But just because I’m not exactly pacing the floor like an expectant father with the clap over the impending release of the administration’s new energy policy, doesn’t mean I don’t think it’s important. Energy is very
important, as George W. Bush might say. And besides, a lack of specialized knowledge doesn’t seem to be dissuading the president’s detractors. The LA Times
has a big story
in Wednesday’s edition about how the environmentalists aren’t even waiting to hear the president’s plan before they release the dogs of war. “The environmental community is going to put more money into this than any other campaign in its history because there is so much at stake,” declares the head of the National Environmental Trust.
Nevada Sen. Harry Reid, eager to change the tone in Washington, announced that “Democrats will throw themselves on the train tracks” to stop this “recipe for disaster” even though he hasn’t seen the plan yet and clearly has a real problem with mixed metaphors.
So perhaps my relative ignorance about the nitty gritty of energy policy isn’t so much of a disadvantage after all. Indeed, perhaps I can offer some fresh-eyed wisdom — in an out-of-the-mouth-of-a-babe kind of way (and I’m not talking about an exposé on bulimia on the set of Baywatch).
As I understand it, the Left and liberals believe that all forms of energy are bad, except, of course, for solar, wind, and the forced labor of thousands of conservative Christians trapped in giant hamster-like treadmills. They don’t like oil and gas because these things allegedly cause global warming and involve unsightly oil derricks. They like windmills and solar panels, despite the fact that these are not very nice to look at either. But, since such things tend to be found inland and away from their beach houses, they don’t mind so much. Meanwhile, they don’t like nuclear power, either, which doesn’t cause global warming — and has killed about as many people as Ted Kennedy’s car — because it’s “scary.”
Personally, I don’t care. When it comes to electricity, I want it the way NARAL wants abortions: an infinite supply, on demand, without apologies. Let someone else deal with the details.
Regardless, any number of writers have pointed out that environmentalism and socialism — as political causes — go hand in hand. Energy provides, well, the energy for capitalism. If you clamp down on all the resources from which we derive go-go juice you clamp down on the economy. The irony is that capitalism is better for the environment than socialism. But golly that’s an old argument.
Fun With Fungibles
Anyway, let me get to my own quirky view on this vital yet vitally boring topic. Yesterday I wrote my syndicated column (the absence of which in your local newspaper is a national scandal) about the Arctic Wildlife Refuge, debunking the myths about the so-called “American Serengeti.”
(Alas, I’m contractually obligated to offer only new material in this space — they don’t call NR publisher Ed Capano’s office the “Nutcracker Suite” for nothing — so I cannot reiterate points made in that column here. But that’s okay.)
As you no doubt have heard, ANWR, or “Anwar,” is estimated to have a lot of oil and natural gas. How much we don’t know, but somewhere between a whole lot and much, much more than a whole lot. The National Geological Survey estimates there to be about 7.8 billion barrels of recoverable oil at a price of $25 a barrel. That’s a lot of oil. (The United States consumes 18.9 million barrels of oil a day but, domestically, produces a mere 6.2 million). By my calculations, (my summer-school algebra classmates just burst into laughter) that’s enough oil to last for one year and 47 days.
Now, opponents of exploring Anwar say that is not very much. Which is of course stupid on its face considering the fact that Anwar is not our only domestic source and you only need a fraction of its yield to keep downward pressure on international oil prices. If you have a keg of beer, you don’t have to sell it all at a cheap price before you pressure others to lower their prices.
Anyway, while I was reading and writing about ANWR, I started to think of last year’s presidential campaign for some reason. As you may recall, last summer, Al Gore — that principled advocate of making “hard choices” for the environment — persuaded Bill Clinton to sell off a bunch of oil from something called the Strategic Petroleum Reserve.
Now the fact that Al Gore claimed to have helped launch the Strategic Petroleum Reserve, despite the fact that it had been created two years before he was elected to Congress, is not important right now. What is important is that it was established to stockpile oil in case of a “severe energy-supply disruption,” like a war, a foreign embargo, or in case the chicks on the next Divas on VH1 special use their hairdryers all at once.
Al Gore has always supported higher gas prices to encourage conservation. In Earth in the Balance, he wrote “higher taxes on fossil fuels … is one of the logical first steps in changing our policies in a manner consistent with a more responsible approach to the environment.”
But when gas prices had edged up a nickel or two per gallon last summer, he caved and pandered to some whiny voters in a few swing states.
Now I don’t mean to pick on a little-known journalism professor at Columbia University. The relevant fact is that a lot of people either thought it was the right thing to do, or were, at least, not particularly upset by the move. At the time, Ted Kennedy said it was “the right decision for America’s economy and the right decision for New England.” The aptly named Dick Gephardt declared, “I support the president’s decision to release up to 30 million barrels of oil from the strategic petroleum reserve. This year’s record prices are clearly a threat to economic security that rises to the level of national crisis that this reserve was intended to stop…. The Republican answer to this crisis matches item for item with the goals of Big Oil.”
He used the word “crisis” three times in 245 words.
Well, today’s gas prices are just as high as they were last year and the economy is far worse off. More importantly, the 30 million barrels heroically released from the Strategic Petroleum Reserve fit into Anwar’s 7.8 billion barrels 260 times — and that’s not taking into account the totally wacky way the economics of the Strategic Petroleum Reserve distort the market and my own feeble math skills.
So, finally, let me introduce the word “fungible.”
Now, I could make the same point using the word “commodity,” but I always thought “fungible” sounded cooler, like a combination of “fun to eat” and “edible” — as in “Dude, this jerky is majorly fungible.”
Oil is a commodity, which means it’s a fungible economic resource, convertible into dollars and back again. That’s how commodities work. It’s like the kiddie riddle, “Which is heavier, a pound of lead or a pound of feathers?” A million dollars in oil is as good as a million dollars in cash — even better if you need to power ambulances and hospitals and strip clubs and casinos, since oil burns better.
Oil is about as close to liquid money as you can get. Which is why I always thought the real hypocrisy on Gore’s part wasn’t his record in favor of high gas prices so much as his incessant promises to “protect” the budget surplus. He screamed and shouted about how he must “protect the surplus!” as if he was a Buddhist monk and the next Dalai Lama was an infant named “the surplus!” Well, the Strategic Petroleum Reserve, economically speaking, is indistinguishable from a budget surplus, and he blew that like a fat man with free ice-cream coupons that expire at midnight just to win the votes of a handful of soccer moms who carpool their kids using gas-guzzling SUVs.
The oil in Anwar is a surplus too. There might as well be about $200 billion in cash sitting underneath a bunch of ice and snow out there in that no man’s land. If you think it’s better to keep it there, fine. But let’s be honest about what we’re doing.