Oil Mania

By Marie Cocco

Two cheers for the Saudis. Not so much for agreeing to boost oil production a bit—a move that in the short term seems unlikely to ease summer gas prices. But because there’s nothing like the Saudi version of straight talk to put in perspective the tongue-twisting of American politicians.

    At the global confab of energy-producing and -consuming countries held in Jiddah over the weekend, Saudi Arabia—the sole oil-producing nation capable of quick production increases—said it would boost output in an effort to ease a global oil-price crisis. The sheiks gave a lesson in economics, insisting they will try to meet demand in their usual self-interested way: by boosting output just enough to quell a crisis, but not by so much that Saudi Arabia’s own profits from high demand and correspondingly high prices are diminished.

    This placing of Saudi cards face up on the table tends to infuriate American politicians and consumers. And that’s a good thing.

    For whenever spikes in energy prices lead to the inevitable upsurge in public demands that somebody do something, American politicians resort to nothing so much as self-defeating silliness. That is behind the call, embraced by Republican John McCain and, before her bid for the Democratic nomination ended, Hillary Clinton, for a summer gas-tax “holiday.” Implementing this would cause people to drive more at the very time when high prices are prompting them to drive somewhat less—that is, it would have precisely the opposite effect from what is really needed.

    Democrat Barack Obama correctly opposes the gas-tax holiday as a blatant political pander. But what of his newest energy proposal? He seeks a crackdown on oil-market speculation, which might or might not be one of the causes of the current price surge.

    I’m all for getting tough on nefarious traders who seek to profit from making other people’s lives miserable. But be honest: Did the unraveling of Enron and the ultimate prosecution of those well-known wrongdoers spare us from the current energy price crunch?

    At bottom, high energy prices are driven by high demand, and currently that demand is being driven by the rapidly developing economies in China, India and elsewhere. Politicians in the U.S. have historically feared telling Americans—still the world’s biggest consumers of oil—that they need to use less of it. This is why McCain has now promoted offshore drilling, a proposal that would probably take a decade or more, give or take a few lawsuits and state political upheavals, to produce a drop of oil. It’s one reason why Obama is so devoted to ethanol subsidies, a supposedly virtuous way to replace oil with a biofuel—even though the diversion of corn crops to fuel production already is contributing to rising food prices. 

    As usual when it comes to energy politics, we have failed to meet the enemy and conclude that it is us. Remember how Jimmy Carter was ridiculed and reviled for putting on a sweater and telling us to lower our thermostats? Well, what if we had done so three decades ago rather than a few months ago?

    And what if we’d never had a love affair with SUVs? What are now symbols of energy profligacy were, only a couple of years ago, the ultimate suburban status symbols. All manner of rationalizations were cooked up to justify their purchase: The need to drive kids to soccer practice—a trip that requires extra room for little but a ball and a water bottle—was one of my personal favorites. In truth, you can’t pass a suburban office park without noticing that their lots are packed from end to end with these behemoths, which are driven far more often for commuting trips than for camping excursions.

    Those looking forward to a change of presidents to usher in a serious change in energy policy should consider this: It took Congress more than three decades to increase vehicle fuel-efficiency standards and eliminate a loophole through which SUVs had boldly driven. The inertia prevailed regardless of whether Democrats or Republicans were in charge of Capitol Hill and the White House.

    Alternative fuels are indeed needed and so is government policy to promote them. But there is no miracle cure that can cut energy prices in the short or long term other than that rarest of commodities, a political and personal commitment to sacrifice.
   
    Marie Cocco’s e-mail address is mariecocco(at)washpost.com.
   
    © 2008, Washington Post Writers Group