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Sierra Magazine
Ways & Means

Fossil Fools:
Washington fiddles while oil burns

by Carl Pope

It's important for environmentalists to remain optimistic, but it's hard not to despair that Americans will ever get a rational energy policy. Soaring gasoline prices this spring and summer couldn't do it, but then neither could the oil embargo of 1973, the Iran-Iraq war of 1979, or even the 1991 Persian Gulf War.

And so, more than a quarter century after the original oil crisis, 40 percent of thevehicles sold in the United States are sport utility vehicles, classified by government bureaucrats as "trucks" to exempt them from the tougher fuel-economy standards for cars. Even the cars sold by the Big Three U.S. automakers are perilously close to violating their 27.5-miles-per-gallon fuel-economy standard. The energy-efficiency and renewable-energy programs from the 1970s that reduced consumer power bills, strengthened regional economies, and increased national energy security are being jettisoned in the name of deregulation of electric utilities. And although presidents Bush and Clinton both promised to stabilize and reduce the hydrocarbon emissions that are causing global warming, neither acted on those promises.

Why? Because the oil companies, automakers, and other champions of the status quo spent millions to convince Americans that any action to reduce use of fossil fuels would devastate the economy. The conservative think tanks (largely funded by those same interests) attacked energy efficiency as though it were a new Red Menace. Representative Joe Knollenberg (R-Mich.) even tried to prohibit government agencies from doing anything to reduce fossil-fuel consumption-including educating the American people about global warming. And for the last five years, Congress has blocked Clinton administration attempts to increase fuel-efficiency requirements for SUVs.

The result was that oil consumption climbed by 14 percent in the 1990s, not coincidentally the hottest decade in recorded history. Congress voted to allow oil produced in Alaska to be shipped to Japan to increase oil-company profits. And a series of mergers among the oil giants reduced industry competition to the lowest level since the breakup of the Standard Oil Trust in 1911.

Taking advantage of the increased demand brought on by Asia's economic recovery, OPEC cut production sharply, and oil companies increased their profit margins. Heating-oil prices in the Northeast jumped last winter, and in the spring gasoline in California exceeded $2 a gallon, causing the purchasers of new 12-miles-per-gallon Ford Excursions to shell out $88 for a tank of gas.

So how did our leaders respond to this latest petroleum shakeup? The initial reaction of the Republican leadership in Congress was to demand a reduction of the federal excise tax on gasoline by 4.5 cents a gallon. (They chose 4.5 cents because this was the portion of the 18.4-cents-a-gallon tax that had been enacted under the Clinton/Gore administration.) But then it became evident that if the tax were reduced the oil companies would cheerfully pocket the change, and that highway construction-the biggest beneficiary of the congressional pork barrel-would be slowed. The idea was quietly dropped.

The next proposal was to tap into the nation's Strategic Petroleum Reserves, the emergency oil stores hidden in salt caverns along the Gulf Coast. Doing so would leave us vulnerable if a genuine crisis emerged, but that isn't what killed the plan. Rather, it was the realization that if the government sold oil at today's high prices and filled its reserves again when the price dropped, the government would pocket the excess profits, not the oil companies. So an alternative was hatched: The government would lend oil to the companies to sell at the current high prices, allowing them to replenish the reserves when prices dropped. In addition to protecting company profits, this would also guarantee the oil industry a major new customer-the depleted Strategic Petroleum Reserve. The plan would, in effect, require the government to sell cheap and buy dear. The Clinton administration firmly said no, and this idea also faded.

But the oil-patch caucus that runs Congress was not deterred. Its members-the Alaskan Republicans, Senators Frank Murkowski and Ted Stevens, and Representative Don Young; Louisiana Senator Billy Tauzin (R) and Representative John Breaux (D); and the dynamic Texas duo, Republican Representatives Tom DeLay and Dick Armey-suggested that we solve what all agreed was a short-term price spike by leasing out the ecologically vital (but conveniently remote) coastal plain of the Arctic National Wildlife Refuge (see "Where the Caribou Roam," page 38). Doing so would turn a teeming wilderness into an industrial dump, but would likely produce a grateful flood of oil-industry contributions to the oil-state congressmen.

Drilling the Arctic Refuge would yield at most a six-month supply of oil-if the oil made it to the Lower 48 at all; the petroleum lobby wants to keep shipping Alaska oil to Japan. It's also intent on allowing a merger of the two oil companies-BP and Arco-that have major positions on Alaska's North Slope, thus reducing the possibility of competitive price cutting-and on preventing the federal government from taking any steps, however modest or cost effective, to conserve energy. (Ironically, OPEC's million-barrel daily shortfall this spring could have been neatly matched by plugging the loophole that allows SUVs to get lower gas mileage than cars.)

Another goal of the oil-patch caucus, of course, is to elect its own boy, George W. Bush, as president. This would guarantee an energy policy based not on the needs of the environment but on the dictates of the oil companies and their stockholders.

Carl Pope is the executive director of the Sierra Club. He can be reached by e-mail at carl.pope@sierraclub.org.


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