Last Saturday, I spoke at the American for Prosperity’s Defending the American Dream Summit in Washington, D.C. I was one of three presenters on energy and energy/environmental issues.
Dan Simmons of the Institute for Energy Research documented the U.S.’s abundance of energy resources from two studies he helped put together:North American Energy Inventory and Hard Facts. Myron Ebell of theCompetitive Enterprise Institute reviewed climate change issues and the U.S. Environmental Protection Agency’s war on coal.
I took a different tact and would like to highlight some of the points I made in this post.
Time to Reprioritize?
As tragic as Obama’s policies have been to the fossil industry, and as wasteful as his fetish over “green jobs” has been to the taxpayer, emphasizing these points of disagreement with his administration overlooks a much more serious sleeping energy giant—electric industry policy.
I wrote on some of these issues recently on Master Resource in comments on Rob Bradley’s books on political capitalism. So consider these four points:
1. Oil is a fungible commodity that trades in a reasonably efficient and competitive global market. Thus we face price risk but not supply availability risk. Opening up more U.S. reserves would improve our economy (domestic jobs and a slightly lower price of oil) and improve our balance of trade. But none of this amounts to a “crisis” in energy markets. Similar arguments could be made about improving many other sectors of the economy.
Thus, I believe a disproportionate (compared to the risk) amount of time is spent handwringing on oil issues (from an analytical point of view; I realize the political advantages of such focus). The heartbreak of psoriasis is tragic but hardly worth a national debate.
2. Radical climate change policy was a real threat from 2009 to 2011 when the Democrats had an undefeatable trifecta in DC. Due to the tireless efforts of many “realists” and a little luck, we dodged a bullet and the threat of really dumb climate policy is no longer seriously on the table, at least for the next decade. Yet we waste a lot of resources fighting the last war.
3. Relatively little attention is paid to SERIOUS reform of electric industry policy. If there is to be a “crisis” in the next decade in energy, it will be in the electric industry.
For example, not a word is said by President Obama’s official websiteon electric industry reform. Similarly, Romney on his site merely nibbles around the edges but does not raise fundamental reform of the electric industry as a discrete topic.