Politics & Policy

Tilting At Wind Farms

Energy-policy smog.

Even though the way we explore and produce energy has changed dramatically in the past two decades, environmental groups, and their allies in Congress remain blinded by the smog of past battles.

For instance, the House of Representatives last week passed three bills aimed at reducing gasoline prices for consumers. Unfortunately, none will become law this year because most Democrats are too busy tilting at political wind farms–paying homage to outdated environmental symbolism and filling the fundraising coffers of the Sierra Club–rather than lowering energy prices for their constituents.

Thus, on Tuesday the House passed a comprehensive set of production and conservation measures similar to the bill that narrowly lost in the Senate earlier this year. It also adopted legislation to spur the development of new refineries. This legislation would dramatically reduce prices to consumers by increasing energy supply. Refinery capacity is an area crimped by a hodgepodge of regulatory hoops and ad hoc rules, which is partly why, 20 years ago, there were 321 refineries in the U.S, while today, there are just 149. Worse still, owing to regulatory shackles, not a single new refinery has been built in the U.S. since 1976.

The environmentalists’ arguments and concerns of two decades ago have not changed. While the movement has produced its share of tree-hugging nuts in the past 30 years, it has also raised the consciousness of most Americans and corporations about the need for better environmental stewardship. “American companies recognized a long time ago that waste and pollution are bad economics,” James Lucier, an analyst with Prudential Equity Group, told me. “They want to optimize the use of resources over the long term.” It is the Greens who haven’t reformed themselves, not American businesses.

Unlike the environmental movement, the U.S. energy industry has undergone a radical transformation in the past 20 years. Companies have successfully invested billions of dollars to develop more environmentally benign exploration and production techniques. For example, refiners invested $47 billion in the past decade alone to improve the environmental quality of the fuels they produce. And, energy producers, owing to massive technological investments, can now drill in pristine areas with little-to-no environmental impact.

Yet have these new technological developments altered environmental activists’ outlook? Not a chance. Democratic presidential candidate John Kerry adopts their symbolic rhetoric hook, line, and sinker. No one today is talking about clear-cutting forests, polluting rivers, or killing animals. Yet that’s exactly what you would think Republicans are proposing–based on his rhetoric. “John Kerry has the courage to take on the polluters that are trying to gut our clean air and water laws,” his website boasts. That may get the Sierra Club all pumped up, but it has little connection to reality.

This irrational policy rhetoric stops Congress from enacting the kinds of real policy reforms that can produce more energy without harming the environment. The radical environmentalists’ surrogates in Congress are no longer protecting the environment; they are merely defending old symbols of politics past.

Taken together, the legislation passed in the House this week recognizes the link between environmental and energy policies–a connection that has not always been obvious to Washington policymakers. For years, energy and environmental issues were kept in their separate silos. Now the connection, in the face of near-record gasoline prices, is painfully obvious.

Those promoting a pure environmental agenda have missed this nexus. “We’ve had ad hoc energy and environment regulations for the past 30 years,” Lucier told me. “There was no sense of how things fit together to produce rational and balanced energy and environment policy.” Building a new refinery, for example, might require one permit from a state, another from EPA, and still others from a variety of federal agencies. “Every agency is like France on the U.N. Security Council,” Lucier said.

Now Congress has a chance to change all that and ensure its policies and rhetoric for energy and the environment are consistent with the realities of 2004. Don’t hold your breath. With the Democrats and their radical allies focusing on Bush and the environment, these bills are unlikely to go anywhere in the Senate this year. It’s enough to make a caribou cry.

Gary Andres is vice chairman of policy and research at the Dutko Group Companies in Washington, D.C., and holds a Ph.D. in public policy from the University of Illinois-Chicago.


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