CATO Lays the Wood to Bush Energy Policy

in 2000! I stumbled across a op/ed piece written by the Cato Institute’s Director of Natural Resources, Jerry Taylor. The column, titled Bush Energy Babble, was published on the New Republic’s website September 30, 2000, just days prior to the election. This libertarian think tank’s scathing review of Bush Energy Policy could just as well have been written in April of 2005.

Reading this op/ed piece has given me an eerie feeling, as if time has stood completely still since Bush was elected. Join me below the fold for some of the more salient quotes….

Another day, another energy plan. Today, George W. Bush rolled out his — by my count — third action plan for dealing with high energy prices. Plan number one, pried out of him by Steve Forbes before the New Hampshire primary, was to do nothing and let the market work its wonders. Sure, he mumbled something about increasing domestic production, opening up some public lands to the industry, and working to promote natural gas, but he was clearly annoyed at having to spend any time whatsoever on a subject other than “compassionate conservatism.” Plan number two, unveiled a few months ago, was a more concrete plan calling for increased domestic production via tax preferences, regulatory relief, and access to public lands placed off limits by environmentalists of both parties. Plan number three is, well, plan number two enhanced by a handful of bad ideas stolen from . . . Al Gore; additional tax credits for renewable energy and energy efficiency, a federally managed home heating oil stockpile, more R&D for “clean coal” technologies, and additional cash transfers to the poor to help them pay their heating bills this winter.

See last night’s bullet points there?

*increasing domestic production

*opening up some public lands to the industry

*promote natural gas (would that be solid or liquid?)

*additional tax credits for renewable energy and energy efficiency (like that of a Hummer?)

*more R&D for “clean coal” technologies

*cash transfers to the poor (????????) didn’t hear this one last night but imagine the uproar if he had!

Taylor continues the smackdown on the myth that it’s OPEC’s fault:

First of all, a cutback in OPEC production raises the price of domestic crude just as much as it raises the price of Saudi crude. That’s because the oil market is an international market and domestic prices will rise to the world price. OPEC, whether we like it or not, has an ability to set the world price in the short run.

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Second, government policies that restrict drilling on attractive public lands in Alaska and off America’s coasts aren’t primarily responsible for our heavy reliance on imported oil. This is: It costs between $5.00 — $7.50 to produce a barrel of domestic oil versus about $1.50 to produce a barrel of Saudi crude. As long as the Persian Gulf nations have a lot of $1.50 a barrel oil laying around — and they do — they’re going to dominate the world market whether we allow drilling in environmentally sensitive areas or not.

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Third, you get the impression from W. that America is some sort of latent Saudi Arabia, sitting atop a vast pool of oil that for some inexplicable reason is being left to the bugs and bunnies. In reality, however, there simply isn’t enough oil in Alaska or other publicly owned lands to significantly expand the world market. Currently, the United States controls only 2.8 percent of the world’s proved reserves of petroleum. Adding Alaskan oil fields now off-limits to the industry in the Arctic National Wildlife Refuge (ANWR) might increase that figure by about 50 percent.

So Cato Jerry is saying that the concept of drilling in ANWR would benefit American consumers is not reality based, American oil is statistically and economically insignificant, and American oil companies benefit more than foreign oil sellers when the world market price rises.

Libertarians describe themselves as market liberals, but they generally find allies in the far right (with the exception of some social policies). At the writing of this op/ed, I think they were right on in shredding Bush’s energy policy 6 years ago! They recognized the strangely symbiotic relationship between American and foreign oil producers. At no time in our history should our understanding of this relationship be more clearly shown than the relationship between our country’s president,(at his core, an independent oil man) and the de facto leader of the foreign oil cartel. I highly recommend reading the entire op ed, because this writer had the ability to see the future.