Inside the Beltway

By Michael S. Lubell, APS Director of Public Affairs

ASPEN, July 13–It does the intellect good to get outside the Beltway on occasion. And Aspen is a wonderful place to clear out the mental cobwebs, rejuvenate the spirit and breathe in the Rocky Mountain air. It also doesn’t hurt to be in the company of a handful of Nobelists, a former presidential science advisor, and some of the world’s experts on energy, especially if the subject is energy.

As I wrote in my last column, Washington politicos have turned on their energy policy after burners–with good reason. When gasoline is selling for $3.49 a gallon, which is what I paid for regular a few days ago in the San Francisco Bay area, Joe Six Pack gets mad, really mad. And even if the White House is distracted by world events, members of Congress in both parties are feeling the pain of each of their constituents. For some members, their political survival may be at stake.

Charlie Cook, one of the well respected Washington polling gurus, puts the number of endangered House and Senate seats at about 50. And for a number of those so dubiously anointed, November 8 could well be résumé time.

Between now and the coming election, four issues will dominate the political debate: Iraq and the Middle East, economic growth and jobs, national security and terrorism, and, in selected regions, religious and moral values, which includes gay marriage and stem cell research. Except for the values issues, energy lies at the nexus of the others.

Putting aside the cultural, political and spiritual bond that exists between the United States and Israel, it’s hard to see why the Middle East should be such a focus of American foreign policy– except for our extraordinary dependence on foreign sources of oil. The facts are simple.

Despite having only 3 percent of the world’s population, we are the world’s largest economy, and, with our way of life, we use 25 percent of the world’s energy. We also use oil to drive 70 percent of our transportation systems, but we are able to supply only 30 percent of what we need from our own domestic sources.

Oil is a fungible commodity, and any burp in the world’s supply anywhere causes almost instant distress everywhere. Although we get only a fifth of our imported oil from the Middle East, if Iraq or any other part of that region falls into chaos, oil supplies will be threatened and prices will soar in all parts of the world.

But even if Iraqi civil strife doesn’t develop into a full-scale civil war, and even if Israel doesn’t take its battle with Hezbollah and Hamas to Damascus and Teheran, oil and natural gas prices will continue to climb at home. The demand pressures from rapidly developing Asian nations, particularly China, simply will outstrip the world’s supplies. And as the costs of petroleum products increase, the American economy, despite its resilience, will inevitably come under great stress.

Today, polling shows that most Americans are anxious about their economic future. In the last three years, the Gross Domestic Product may have grown at a annual rate of 3.5 percent and more than 5.5 million new jobs may have been created, but most Americans say they feel threatened financially. Many claim the economic recovery has passed them by. They point their fingers at offshore outsourcing of jobs and waves of illegal immigrants.

It matters little whether the facts bear out the public concerns. In the world of politics, perceptions dictate election outcomes, which is why the White House and Republican congressional leaders are desperately trying to get out the good news on GDP growth, job creation, and shrinking deficits. But if energy prices continue to spiral upward, good news will soon turn to bad. And the anxiety the public is expressing today will have far more foundation in fact.

Terrorists would like nothing more than to see the United States suffer economically, but putting a squeeze on international oil production has proven to be problematic historically, even when OPEC has made a concerted effort to do so. There’s an easier target: America’s energy infrastructure. We’ve already seen what hurricanes can do to roil the oil and natural gas markets, and we know how easy it is for parts of the electricity grid to fail. A terrorist attack on a few refineries, nuclear plants or parts of the power grid could produce crippling results. Security analysts believe it is only a matter of time before an attack occurs.

But energy is not only a matter of economic and homeland security. It’s a matter of environmental security. Global warming and the carbon emissions that drive it are real, and politicians are just now beginning to grasp the enormity of the issue. Within the next two years, as the public tunes into the issue, energy and sustainability could become the buzz words that determine the outcome of the 2008 election.

As Steve Chu, Nobelist and Director of Lawrence Berkeley Laboratory points out, we don’t really have an oil or gas problem, we have a carbon problem, and science must lead the way.