The pusher-in-chief
Feb 2nd 2006 | WASHINGTON, DC
From The Economist print edition
The administration's energy policy remains a disgrace
“AMERICA is addicted to oil.” Those may be the most memorable words of George Bush's state-of-the-union speech. Not quite as evocative as “axis of evil” perhaps, but still a fairly candid confession—especially from a man who spent much of his early life trying to prosper from that addiction.
The soundbite also came with a dramatic goal: to replace more than 75% of America's oil imports from the Middle East by 2025. To achieve this, Mr Bush unveiled something called the Advanced Energy Initiative, which promises a 22% boost in clean-energy research into two areas of America's energy-guzzling. “The best way to break this addiction,” insisted Mr Bush, “is through technology.”
One thrust will be changing American homes and offices. Mr Bush promised to boost spending on “clean coal” technologies, renewable energy and nuclear power. The second target is transport. He vowed to increase research spending on better batteries for hybrid and electric cars, as well as on hydrogen fuel cells. He also promised to help a new kind of ethanol—made from wood chips and switchgrass rather than the usual corn—become commercial.
Look closely, though, and it turns out that this grand new plan to end oil addiction is really no such thing. Take, for a start, that objective of replacing three-quarters of Middle Eastern imports of oil by 2025. Because oil is a fungible, globally-traded commodity, it does not matter where imports come from. Even if America got all its oil from Canada, Venezuela and Nigeria, an oil shock in Saudi Arabia would send the price of every barrel of oil skyrocketing—even Alaskan barrels. Only abandoning foreign oil completely would free America from the prospect of an oil shock.
The problem is not that the technologies identified by Mr Bush are necessarily the wrong ones. Quite the contrary. Some of the approaches he points to, such as “plug-in” hybrid cars and “cellulosic” ethanol, are quite promising.
The problems with Mr Bush's speech are the same ones that undermined his energy policy, which was passed into law as the Energy Act last year. That grotesque law handed out tens of billions of dollars in subsidies to every imaginable source of energy. But it did nothing to promote carbon trading; it did not mention carbon taxes; it had no tightening of vehicle fuel-economy rules.
In short, Mr Bush is still avoiding most of the regulations that might actually encourage the market to ditch dirty technologies in favour of clean ones. And he is still avoiding any attempt to make Americans pay the true cost of the energy they guzzle. Until that happens, he is firmly on the side of the pusher, not the addict.
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