Today Politico Arena asks:
Given that crude oil prices surged to nearly $90 per barrel on Friday, and could spike even higher if the crisis causes a shutdown of the Suez Canal, how should policymakers in Wasihngton respond regarding oil and the crisis in Egypt? Does the situation underscore a need for more domestic production? And does this crisis bolster or hamper Obama’s clean energy initiative that he called for in his State of the Union address last week?
The unrest in Egypt should have no bearing whatever on American energy policy. Like nearly every other commodity — food, clothing, shelter, education, health care — energy, from whatever source, is far more efficiently and equitably produced and distributed by the market than by governments, even when foreign governments play a part in that process. We saw that in the “energy crises” of the ‘70s; we’ve seen it in every “crisis” since.
Why, in the name of “energy independence,” should the U.S. government “promote” domestic production if foreign energy is cheaper? Do we imagine that manifold foreign producers will not supply us if the price is right? Where’s the evidence for that? Any government promotion should be by simply getting out of the way and letting the market determine where energy is produced.
Nor should today’s Egyptian unrest affect Obama’s “clean energy initiative,” which should fall on its own terms. It’s nothing but a massive government intrusion into the market, subsidizing expensive sources of energy for little environmental gain, making us all poorer, but especially the poorest among us. Do we need any better example that the ethanol boondoggle, which even Al Gore has admitted is environmentally destructive? Energy policy will be an early test of whether the new House majority is serious about reducing the role of government in our lives.