Energy Policy And Bush's Low Expectations

If Dickens had written the script for the Bush administration, Low Expectations would be the title. Conservatives have been cautioned time and again to grow up and be thankful for whatever we can get. Having portrayed Bush as a ne'er-do-well frat boy during the campaign, the Left has apparently underestimated his political talents. In either case, the new administration benefits. Except when it comes to energy policy where the expectations are way out of line with reality.

Free marketeers assume that if you free up the petroleum industry from draconian environmental and other regulatory obstacles it will immediately go out and find billions of barrels of oil in our own back yard. Presumably the days when OPEC could set the price, disrupt supplies, and affect U.S. foreign policy would become relics of the past once you allow the free market to work.

The Left assumes, quite cynically of course, that Bush has cut a deal to reward his rich friends at the Houston Country Club with all kinds of incentives to go out and find new domestic supplies of petroleum, all the better to gouge the consumer.

But in either case, no one can tell us where the exploration companies are going to find all of this new oil. We hear a lot about ANWR, the Alaskan National Wildlife Refuge, where estimates of reserves hover around 19 billion barrels. That sounds like a lot, but with American imports at about 6 million barrels a day and rising, it's not as much as it seems.

Even if the Administration does succeed in getting Congress's approval to open ANWR for exploration, George Bush won't see the results until long after his political career is over. It will be close to a decade before the spigots open, and even then we won't see an appreciable affect on the domestic market. It's more profitable for the oil companies to ship Alaskan crude to Japan. What's left over will barely make a dent in our consumption growth. Meanwhile, reserves in the lower 48 are continuing on their historic decline.

Mexico is a potential factor in a truly hemispheric energy policy, and surely George Bush had this in the back of his mind when he began using this terminology shortly after his inauguration. Mexico is not an OPEC member. Their nationalized industry is woefully inefficient. Possibly with privatization and deregulation we could expect to see significant gains in efficiency of production. Maybe they can begin to supply more of our import needs, making us less dependent on OPEC.

But...