Consider Bush’s riff on energy policy. Here we have an oil‐state governor suggesting that exploitation of oil reserves in Alaska would help shield us from OPEC price manipulation. That is sheer nonsense. Oil is a global commodity, and cutbacks in the Persian Gulf supply would affect the price of Alaskan crude just as surely as they would affect the price of Saudi crude. The idea that “oil independence” protects us from OPEC is the idea of a student who slept through Econ 101.
The governor then made a point of opposing the use of the 600‐million‐barrel federal Strategic Petroleum Reserve to dampen domestic oil prices because, he said, the SPR should be reserved for national emergencies. Like what? Short of a naval blockade, there is no way to keep foreign oil out of American refineries. Under Bush’s doctrine, the SPR, which was filled at the inflation‐adjusted price of something like $65 a barrel, would never be used. Virtually every independent assessment of the SPR concludes that it’s a white elephant, destined never to be used and serving no real purpose. Why not sell some of it, save a little money for the taxpayer, and dampen the creeping increase in oil prices?
And then there’s the conflict between Bush’s assertion that OPEC production cutbacks are driving up prices (true) and his belief that “Big Oil” ought to be investigated for price gouging and profiteering. Well, which is it? If the price increases are indeed due to reductions in Persian Gulf supply, why blame “big oil” for passing on costs to consumers?
Regarding OPEC, the Texas governor asserted that he could “jaw‐bone” its member states and convince them to increase production. Question: When has begging OPEC to increase production actually increased production? Answer: Never. If there’s one thing that the last 30 years should have taught us, it’s that OPEC nations are profit maximizers. They have always made — and will always make — oil production decisions based on how much they expect to gain. Believing otherwise simply debases American foreign policy and leads us down blind alleys.
Now, let’s imagine for the sake of argument that “Big Oil” companies are indeed keeping oil off the market. The only reason they would do so would be to sell that oil when prices are even higher. In other words, they’d be stockpiling for a rainy day. Well, what’s so wrong with that? Don’t we want oil companies to stockpile reserves so that consumers have access to oil when supplies become tight? Oil companies don’t normally maintain stockpiles because they fear that some shameless demagogue like George Bush will set the mob upon them the minute they try to earn a profit from their far‐sightedness.
Then there was the gratuitous support for the Low Income Housing Energy Assistance Program, a Carter‐era program that helps the poor pay their heating bills. The governor defended it because New Hampshire households — unlike most of the rest of America — still rely largely on oil for heat, and oil price increases hurt them more than most. But studies show that poor Americans not benefited by LIHEAP spend about the same percentage of their income on energy as do poor American benefited by LIHEAP. That is to say, with or without LIHEAP, poor people will spend about the same amount of money on their utility bills. LIHEAP, then, is simply an income transfer program — another kind of welfare check. If we’re going to hand out money to the poor, why not do it aboveboard, not through a thousand backdoor channels where administrative costs drain away most of the money?
Of course, George Bush is not alone. Few politicians ever say anything sensible about energy policy. What truly amazes, however, is that this densely packed nonsense pertains to one of the main industries of his home state — an industry of which he used to be part. Of course, it’s perfectly possible that Bush does not believe a word of what he said, but his political instincts tell him that that is how one gets votes. He’s either a Clinton, then, or a Harding. We’ll find out as the primaries continue.