Energy Policy Proposals Take Shape
Two decades after one oil shock, a new Mideast crisis may prompt action - but how radical? ANALYSIS
SINCE the first ``oil shock'' 17 years ago, United States leaders have grappled over the need for a national energy policy. Jimmy Carter wore sweaters and put solar collectors on the roof of the White House. Ronald Reagan tore down the solar devices, pushed for more nuclear power plants and domestic oil wells, and resisted stiffer auto gas mileage standards. Meanwhile, US reliance on foreign oil climbed to nearly 50 percent of the total used and those solar power businesses which survived looked overseas for most of their market. ``Acid rain'' and ``global warming'' entered the vocabulary, and ex-Texas oilman George Bush told the US Department of Energy (DOE), headed by a former admiral in the nuclear Navy, to design a ``national energy strategy.'' Some 18 months later, Americans are being killed in a war over one of the most petroleum-rich spots on earth and that energy strategy is yet to emerge.
This is the backdrop for what is sure to be a long and hard-fought battle over energy policy in the post-Gulf war period. There will be three fronts: within the Bush administration itself; between the administration and congressional Democrats; and between the elected/bureaucratic establishment (which, for the most part, would rather just tinker with the existing system) and outside experts arguing for radical change.
Just before Christmas, the DOE finally presented the White House with strategy options. These reportedly included tougher conservation regulations as well as development of new energy sources (mainly Alaskan oil and nuclear power). But the plan was intercepted by a White House troika of chief of staff John Sununu, budget director Richard Darman, and economic adviser Michael Boskin. Favoring a more free-market approach, they returned the plan to the agency.
In his State of the Union message this week, President Bush made a one-sentence, noncommittal reference to ``a comprehensive national energy strategy that calls for energy conservation and efficiency, increased development, and greater use of, alternative fuels.''
Responding for Democrats, Senate majority leader George Mitchell of Maine made a six-sentence, noncommittal call for a ``sensible'' energy program, but also blamed the Reagan/Bush administrations: ``For 10 years we've had no energy policy.''
On Capital Hill, elements of such a policy are beginning to emerge. Sens. Richard Bryan (D) of Nevada and Slade Gorton (R) of Washington announced legislation Monday that would require US auto makers to increase the fleet average gas mileage 20 percent by 1996 (to 34 miles-per-gallon) and 40 percent by the year 2001. This would save 2.5 million barrels of oil a day by the end of the decade. (Americans now consume 17.5 million barrels of oil a day, about 63 percent of that as gasoline.)
Senator Gorton acknowledged industry and White House opposition to the measure, but called it ``perhaps the single most important part of a national energy policy.'' The auto mileage standards bill has 35 cosponsors in the Senate. A similar bill last year lost a filibuster fight by just one vote.
Earlier in the month, Rep. Leon Panetta (D) of California introduced a comprehensive energy plan that would expand the Strategic Petroleum Reserve, set a $16-per-barrel floor price for domestic onshore oil, increase funding for mass transit and renewable energy resources, restore funding for weatherization and other conservation measures, require state public utility commissions to consider incentives for conservation, and create a contingency gasoline conservation tax to kick in when oil prices drop.
The future of US energy policy also will be reflected in the federal budget process, which begins next week when the Bush administration releases its budget plan for fiscal year 1992. This year's budget included a 12 percent cut in nuclear power research and development while solar and other renewable energy R&D went up 42 percent. Even so, the DOE still spends more than twice as much on nuclear research as it does on renewable energy.
Germany spends nearly twice as much and Japan 32 percent more than the US on photovoltaic technology, which converts sunlight into electricity.
War in the Gulf region (which holds two-thirds of the world's proven oil reserves) is making clear the true cost of imported oil. Georgetown University and the Rocky Mountain Institute figure the US was spending $46 billion a year on readiness to protect Mideast oil - before the current conflict. That puts the real cost of Gulf oil above $90 a barrel.
There are hidden or postponed environmental costs to heavy use of fossil fuels, which also do not show up in their price. Researchers at Pace University's Center for Environmental Legal Studies found that the cost per kilowatt hour of electricity from a coal-fired plant doubled when atmospheric damage was factored in. (This true cost of 12 cents per kilowatt hour is half again as much as the current price of wind-generated electricity.) The American Lung Association estimates that auto pollution adds $40 billion to US medical spending.
Paying these true costs of fossil fuels may involve such things as a ``carbon tax,'' now used in Europe, in which carbon dioxide-producing energy sources (coal, oil, natural gas) would be more heavily taxed to accelerate development of renewable sources.
Meanwhile, over the past decade, conservation methods such methods have resulted in seven times the ``new'' energy obtained from increases in supply, says Amory Lovins, research director of the Rocky Mountain Institute.
``Hastening the transition to a sustainable energy economy requires a major shift in priorities - a shift that existing institutions and industries may find threatening,'' write Christopher Flavin and Nicholas Lenssen in a recent Worldwatch Institute report.
Given the history of US energy policy since the first ``oil shock,'' that may be an understatement.