FUEL DUEL
COMMENT
Issue of 2006-05-22
Posted 2006-05-15
Last week was another unhappy one for President Bush. His popularity ratings dropped again; news of chaos and civil war flowed unabated out of Iraq; the appointment of the former head of the N.S.A. as the director of the C.I.A. was jeopardized by further reports of domestic wiretapping; and gasoline prices continued to cause distress from coast to coast. And it got worse: the President found his Administration being compared—by his own ostensible supporters—to that of a certain Georgia peanut farmer whose Presidency became a byword for haplessness. “It is no accident,” the National Review wrote of a panicky Republican scheme to hand out hundreddollar rebates to angry drivers, “that the proposal closely mirrors a Jimmy Carter-proposed rebate to try to boost the economy, a pathetic initiative from a pathetic administration.” The tone of the article echoed that of the Fox News commentator Tony Snow, who, before being recruited as the new White House press secretary, complained that Bush’s energy plans were “filled with stuff that even Jimmy Carter abandoned.”
The current energy crisis is not yet as spectacular as the one that bedevilled Carter. The economy is not in recession, and there are no gun-wielding protesters enraged by long gas lines. What’s more, because the Bush family has for years had close ties to the House of Saud—despite its financial support of Wahhabi clerics who preach jihad—relations with at least one major oil producer are more civil than they were then. A few weeks ago, His Excellency Ali al-Naimi, the Saudi petroleum minister, participated in an energy forum in Washington, and sounded much like any platitudinous American statesman. “We are at the crossroads on the path to our energy future,” he said, and must “avoid repeating the costly mistakes of the past.” He even made a joke about conserving energy by turning down the air-conditioning in the building: “It’s freezing.”
One thing that the two energy crises have in common is that both were preceded by upheavals in the Middle East—in Carter’s case the Iranian revolution, in Bush’s the war in Iraq. But in many ways the challenges that the United States faces now are more daunting than those of the nineteen-seventies. Iran’s current anti-American leader, Mahmoud Ahmadinejad, has waved aside American (and European) efforts to halt his nuclear program, noting, “Ultimately, they need us more than we need them.” We now compete for oil with voracious energy consumers like China and India. And, as hurricane season approaches (and as the connection between more violent storms and global warming seems to grow increasingly evident), refineries continue to struggle with the disruptions from Katrina.
Even sentimental Democrats today tend to think of the Jimmy Carter of the seventies as a hand-wringing Milquetoast, more rabbit than killer. He and Congress, though, took on the energy emergency with a vigor that seems unimaginable these days. They deregulated oil and gas prices, created the Department of Energy, and got utilities to increase their use of natural gas and coal. They also allocated hefty sums for solar and other alternative-energy sources and pursued President Ford’s policy of higher fuel-economy standards for new cars. By the time Carter left office, the consumption of foreign oil had fallen by nearly two million barrels a day, to seven million barrels. Predictably, as oil prices dropped, so did the urge to conserve. Ronald Reagan revoked environmental policies and ripped Carter’s solar panels off the White House roof, and Americans learned to love big cars again. We now import about thirteen million barrels of foreign oil a day, an increase of eighty-five per cent.
In the State of the Union address, and again in a speech in April, Bush deplored America’s “addiction to oil,” rightly describing it as “a matter of national security.” He also asked Americans to buy more hybrid and clean-diesel cars, and endorsed the development of solar and wind power—something that must have given Carter a grim sense of vindication. But that was just talk. Bush’s energy bill, four years in the making and signed just nine months ago, didn’t even mandate increases in fuel-economy standards, which are worse today than they were in 1986: 24.6 miles to the gallon, on average, as opposed to 26.5. (He has since raised the standard for light trucks, by a few miles per gallon, effective 2011.) Ethanol was the bill’s favored alternative fuel, since the corn it is mostly made from is grown in the Midwest, where several competitive congressional races are being fought this year. For the most part, though, the bill proposed a predictable array of tax breaks for energy producers, some $14.5 billion, the vast majority of which went to the coal, natural-gas, nuclear-power, and oil industries.
This approach has not been well received by voters, who recently also learned that in 2005 ExxonMobil enjoyed the highest corporate profit in history—$36.13 billion—and that its president earned two hundred and fifty thousand dollars a week. With only thirteen per cent of the public approving of Bush’s handling of gasoline prices, congressional Republicans are having second thoughts about those oil-company tax breaks, while Democrats focus primarily on a feeble but presumably popular measure that would reduce the federal gas tax for sixty days and increase taxes on oil companies.
What no elected official has yet taken a stand on is the fact that there is an obvious way to begin addressing the energy crisis, one that would reduce our need for foreign oil, encourage fuel efficiency, attack global warming, and maybe banish the Hummer forever: a steep tax on gasoline. The general assumption is that this would be political poison—too many Americans have to drive long distances to work. As a result, the gas tax, which is 18.4 cents a gallon, hasn’t been raised since 1993. But if most or all of the proceeds were returned to consumers, in the form of lower payroll taxes, the impact on the economically vulnerable would be minimized. Many economists have advocated such a plan, and even some of the most stalwart anti-tax Republicans, such as Grover Norquist, have expressed support for it. Robert H. Frank, a professor of economics at Cornell, has pointed out that when Carter made a similar proposal it was defeated by opponents who argued that drivers would buy just as much gas as they did before, with the money they got back in reduced taxes. But if people are given the right incentives they are likely to save both ways, by taking their rebates and by buying more fuel-efficient cars, thereby reducing consumption and spending.
After September 11th, Bush had an opportunity to propose such a plan, telling Americans that they could join the war on terror by paying more for gasoline and using less of it. Franklin D. Roosevelt proved after Pearl Harbor that fear can be a powerful spur to civic virtue. Bush, in his address to Congress on September 20, 2001, did not invoke anything like the Rooseveltian “privilege of self-denial.” Instead, he promised to protect us from terrorism, “eliminate it, and destroy it where it grows.” As for the rest of the nation, Bush said, “Americans are asking: What is expected of us? I ask you to live your lives, and hug your children.” Unfortunately, Americans are as fearful as ever, and they are demanding a plausible energy policy. Maybe it’s not too late for the “war President” to try something truly brave: tell us the truth about the real costs of oil and the ravaging effects of greenhouse gases, and do what should have been done a generation ago.
— Dorothy Wickenden |
