In his speech at the Republican National Convention, former Senator Fred Thompson said that one question people will never have to ask of John McCain is, “Who is this man?”
In truth, the comment was intended to say more about Barack Obama than McCain. It goes to the heart of many people’s reservations about Obama — namely that after two years of campaigning, Americans have at best a vague sense of who this man is. As Victor Davis Hanson has pointed out, Obama remains a mystery, and it’s difficult to say what we know about how he will govern.
That is particularly the case on energy — among the most compelling issues in this long campaign. If the polls and the conventional wisdom are to be believed, Obama will sweep to victory in two weeks along with sizable majorities of Democrats in both houses of Congress. Anyone trying to get a read on what his energy policy would be will have a hard time reaching real conclusions. The more one studies his positions and his campaign performance, the more likely one is to ask Fred Thompson’s question: Who is this man?
Take ethanol. Obama appears to be trying to scrub the public record of his past support for federal corn-ethanol subsidies and mandates. In August, the Obama campaign purged several sections on corn ethanol from his online energy plan. Now it may be that Obama’s staunch support for corn ethanol during the Iowa caucuses — the primary-season victory that created his campaign’s momentum — is now regretted and abandoned. Or it may be that this summer’s big increases in food prices — boosted in part by ethanol mandates — caused him to downplay his support for Big Corn, but that he has every intention of fulfilling his campaign promises to Iowa’s farmers. We simply don’t know — because the Obama campaign won’t tell us.
How about nuclear power? Obama has issued qualified support for nuclear energy, the expansion of which more and more Americans recognize as key to our energy and environmental security. Now, Democratic party orthodoxy has held firmly to a no-nukes policy since Three Mile Island. Yet for all of Obama’s supposed buck-the-base boosterism, he fails to support nuclear power in the one area that could really make a difference: waste storage. He opposes the proposed nuclear waste repository at Nevada’s Yucca Mountain, and offers no alternative plan for dealing with the spent fuel piling up at the nation’s 104 commercial nuclear reactors. Is that a wink and a nod to the environmental lobby that nuclear power won’t go anywhere on his watch? Inquiring minds want to know.
The Obama campaign is particularly muddled when it comes to coal, the much-maligned fossil fuel responsible for half of the electricity Americans use every day. Obama, who hails from a coal-producing state, has voiced support for research into “clean coal” technologies designed to capture and sequester the carbon dioxide released when the fuel is burned. Environmentalist dogma holds that there is no such thing as clean coal, so Obama’s position is heralded as yet another reach-across-the-aisle departure from Democratic orthodoxy. But it’s not clear how wedded the Obama ticket is to the campaign’s boilerplate promises. Vice-presidential candidate Joe Biden may have revealed the campaign’s true thinking in an unscripted rope-line gaffe last month. “We’re not supporting clean coal,” said Biden. According to the Delaware senator, an Obama administration’s policy would be “no coal plants here in America.” Does anybody know where they really stand?
The energy issue that captured the most attention in a summer of sky-high gas prices was the tussle over offshore drilling. Obama first opposed relaxing the federal offshore-drilling ban. Then, as it became clear that huge majorities of voters favored lifting the ban, he evinced tepid support for very limited drilling. “We do need to expand domestic production,” he said during the third presidential debate. “That means, for example, telling the oil companies the 68 million acres that they currently have leased, that they’re not drilling: use them or lose them.”
The use-it-or-lose-it argument folds under inspection, however. First, that’s the way the system already works. If a company doesn’t produce on a lease (for which it pays rent to the government), then the rights revert back to the Feds. Second, having a lease is no guarantee that an area has oil or gas underneath. If a company holds a lease but isn’t drilling, it’s because it has determined that there isn’t enough extractable oil or gas to make it worthwhile, or it is being held up by permitting issues or litigation, environmental and otherwise. The fact that some leases don’t produce is no argument against offering leases in areas with significantly more oil and gas.
With the expiration of the offshore drilling ban earlier this month, the next president will have the opportunity to write the rules on issuing leases in previously off-limits waters. Will Obama do so in a way that actually encourages new oil production? Or will his administration craft regulations that — by making the process too costly and cumbersome, or by inviting litigation from environmental groups — could effectively extend the ban? If his position is the latter, it’s probably wise for him to keep energy consumers in the dark for now.
Rather than address the substance of this serious proposal on how to deal with our nation’s fuel needs, Obama spent much of the summer criticizing energy companies like Exxon Mobil for earning what he deemed to be excessive profits. A cornerstone of Obama’s energy plan would be to sock companies with an extra tax on their “windfall” profits — Big Oil should pay even higher taxes when the price of a barrel of oil rises over $80. But we’ve been down that road before.
Jimmy Carter helped push through a windfall profits tax on oil producers in 1980. As the Tax Foundation notes, that plan “had the effect of decreasing domestic production by 3 percent to 6 percent, thereby increasing American dependence on foreign oil sources by 8 percent to 16 percent.” Moreover, as any supply-sider could have predicted, the tax failed to meet the government’s revenue projections. Congress repealed the windfall-profits tax in 1988. Why Obama wants to reprise one of Jimmy Carter’s more notorious policy debacles is not clear — though the point may be moot now that the global economic slowdown has driven the price of oil below Obama’s arbitrary $80 threshold.
As much as tax policy and the implementation of Henry Paulson’s bank bailout, the next administration’s energy policies will shape our economy for decades. Will we have the resources necessary to fuel a growing and productive economy? Will we take steps necessary to ensure that the world has the energy supplies it needs to power economic growth and lift billions out of poverty? Can we meet rapidly growing demand for energy in a manner that protects the environment? Will our next president chart a new, centrist course on energy, or will he take his direction from the mandarins of the environmental movement?
As Senator Obama edges closer and closer to the levers of power, he is more and more a mystery to those who have watched his campaign. Even at this late date, his answers to a host of important questions are anyone’s guess.
— Max Schulz is a senior fellow at the Manhattan Institute.