August 6, 2008

St. Louis Post-Dispatch Eric Mink Column: Hot Air and Energy

By Eric Mink, St. Louis Post-Dispatch

Aug. 6--There's no cheap energy anymore, but there's an absolute glut of energy policy proposals from the two guys running for president, who seem to be stalking each other from one end of the country to the other.

On Monday, Democrat Barack Obama was in Lansing, Mich., talking up and tweaking the comprehensive energy plan he announced in Las Vegas on June 24.

Republican John McCain showed up in Michigan on Tuesday, touring the Fermi 2 nuclear power plant in Newport and talking up the comprehensive energy plan he announced in Las Vegas on June 25.

What actually is surprising about the candidates' energy plans is how similar they are. Both acknowledge that America's dependence on oil is unsustainable in the long run, damaging to the environment and dangerous to our national security.

Both say we need to diversify the sources and kinds of energy we use, raise the mileage and lower the emissions of vehicles, update the nation's electric grid, improve the energy efficiency of new and existing commercial and residential buildings and make the federal government itself an example of state of the art energy practices.

There are, of course, differences: McCain embraces nuclear power; Obama -- reluctantly -- won't rule it out. McCain recently (last month) endorsed lifting the ban on offshore drilling; Obama even more recently (Friday) said he'd consider it, but only as part of a broad congressional compromise that would include incentives to encourage and develop non-petroleum alternatives.

But the more substantive difference between them is philosophical:

McCain has confidence in "the power and innovation of free markets" to solve these problems, as he put it in an energy-related speech last year.

Obama, looking at the historical record, believes we can't depend on the profit motive alone, so the government's job is to define the problems, set the priorities and use its collective power to ensure success.

Lisa Margonelli isn't impressed. "The current dialogue is profoundly depressing and fake," she told me. "I think both candidates need to be more honest about our options."

Margonelli is a California-based fellow at the high-powered New America Foundation policy think tank in Washington and the author of the fascinating and immensely entertaining best-seller "Oil on the Brain."

Published last year and issued recently in paperback with an essay updating some of her observations, "Oil on the Brain" is the result of three years of field reporting and research that took Margonelli across America and to China, Iran, Nigeria, Chad and Venezuela. She even wormed her way into the U.S. Strategic Petroleum Reserve.

Dotted with respectful and sometimes affectionate profiles of improbably colorful characters, the book documents how oil is discovered and recovered; how it's refined, wholesaled and retailed; how it's priced and sold worldwide as a commodity and as a financial instrument; how it's wound through the social fabric of America and the lives of individuals; and how it shapes politics, diplomacy, democracy, autocracy, psychology, sociology and economics.

When I reached Margonelli via cell phone, she was riding shotgun in a van chugging through California's Sierra Nevada mountains heading for Colorado to help a friend move. The vehicle, she admitted, was exceeding the speed limit from time to time.

The energy debate has been disappointing, she said, noting the "theatrical approach to high gas prices" that involves talking about what amount to more subsidies and taxes to pay for more driving. We need to be talking about driving less, she said.

Subsidies speak to one of the recurring concepts of "Oil on the Brain": the hidden penny. That 9/10 of a cent tacked on to the price of a gallon of gas stands for countless costs that aren't paid directly, she writes, "from air pollution and greenhouse gases, to traffic congestion and tax breaks for oil companies, to taxpayer-subsidized oil investments in developing countries, to the costs of the U.S. military presence in the Persian Gulf."

Margonelli criticized the idea Obama floated Monday of using some of the oil from the Strategic Petroleum Reserve stocks near the Gulf Coasts of Texas and Louisiana. "If you want to use it to moderate prices," she said, "you need to set a target and say 'If oil hits, say, $150 a barrel, we're going to release, say, 750,000 barrels a day.' Ideally, you'd never have to use it, but it says we're going to do something. It's more potent as a future step," she said, and it could tamp down prices in the short term.

McCain's enthusiasm for offshore drilling, she says, is likewise out of whack. It amounts to to a giveaway to the oil companies, Margonelli said, because operating in U.S. waters is safe, legal contracts are dependable and the royalties exacted by the U.S. government are much lower than those of other countries. On top of that, as she notes in her book, advances in technology have long since taken most of the uncertainty out of drilling, although "the myth of the lucky wildcatter lives on."

"We want the oil companies to make money," she told me, "but we want them to work for it." Offshore drilling, she said, is essentially "free money."

Mostly, though, she'd like to see some courage from the candidates. "I think they should say, 'Look, there are no quick fixes here for the mess we're in. I'm sorry I'm the person who has to say this, but we have to use our greatness to rethink the way we live.'"

And she expects this in an election year? "I think someone needs to say it," she insisted. "Both of these people want to be centrists. They could redefine the center."

I reminded her of what happened to Jimmy Carter when he told Americans hard truths about an earlier oil crisis. Margonelli replied, "In fact, the country benefited from his energy policies and Jerry Ford's energy policies for years. We need to embrace our faith in our ability to transform the American economy and transform our lifestyles.

"The government needs to have more guts," she said. "It needs to start taking as activist a role in domestic energy policy as it does in pursing energy policies overseas. There have been a lot of political interests working to preserve the status quo, and that's not working for us as citizens anymore."


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