OPEC’s announcement last Thursday to cut crude oil production by 1.2 million barrels prompted this gem from Energy Secretary Sam Bodman: ”We continue to believe that it is best for oil producers and consumers alike to allow free markets to determine issues of supply, demand and price.” Hearing frank talk about the virtues of free markets in the energy sector is indeed refreshing. Too bad Bodman doesn’t take his own rhetoric seriously. Why should oil supply, demand, and price be left to market actors but not ethanol supply, demand, and price? Or wind energy supply, demand, and price? Or ad infinitum?
Simply put, this administration believes that politicians should dictate energy choices, not markets. Otherwise, we wouldn’t have “Freedom Car” initiatives, clean-coal technology programs, massive new subsidies for nuclear power plant construction, or any of the political madness surrounding ethanol.
OPEC should tell Bodman they’ll embrace markets as soon as Bush does likewise.