Oil Shock 2008
By Michael S. Lubell, APS Director of Public Affairs
When oil magnate and corporate raider T. Boone Pickens begins tilting at windmills, you know something must be in the air.
Four years ago, Pickens, who has made billions in the Texas oil fields, siphoned off some of his extraordinary petro wealth to fund the “Swift Boaters,” those Vietnam vets who helped sink John Kerry’s 2004 presidential campaign ship. But that was then, when oil men were ruling high in Washington, gas was selling for $2.00 a gallon, Iraq had yet to develop the foul stench of a quagmire and disbelievers in global warming were still roaming the halls of the Capitol.
Today, T. Boone is spending millions of dollars a week just to advertise his plan for weaning America off foreign oil. He admits he’s not an Al Gore global warming groupie, but his plan to have wind displace natural gas for electricity generation and natural gas displace gasoline for powering cars resonates well with many environmentalists.
Even Democrats, who were ready to send out a lynch mob to get Pickens four years ago, seem somewhat conciliatory. As one member of the House Democratic leadership put it recently, “Look, if he is serious about it, we’re happy to have him join us in cutting our dependence on oil.”
So, is Pickens serious about replacing oil with wind? Is Washington serious about doing anything at all about energy? And do any of the myriad proposals on the table make scientific or political sense?
First about Pickens: give him credit for amassing extraordinary wealth by making wise business decisions and taking calculated risks. But is his wind plan a sound long-term energy strategy or just a scheme to make his already very deep pockets even deeper?
Pickens swears he has no interest in getting any richer. He says that at eighty, he has more money than he can possibly spend in his remaining years and that he will bequeath all of his formidable estate to charity when he dies.
And, as for a personal commitment to his advertised wind plan, he argues that he has already placed a $2 billion order for wind turbines with G.E. For truth in marketing, he gets an A.
How does Washington match up? On histrionics, posturing and oratory, Congress and the White House score high. But, they have little to show for substance. And if history is any guide, whatever policies finally make it through the political sausage mill might not have much of a shelf life.
Still, the oil shock of 2008 may be different from the tremors of 1973, 1979 and 1991. Back then, China and India were economic basket cases and demanded little from the world’s energy resources. Today, their economic engines are whirring, and they are guzzling oil as fast as OPEC pumps it.
Twenty years ago, global warming was still a matter of debate in some scientific quarters. Today, only a few scientists believe that anthropogenic climate change is not real.
Members of Congress are also under much more public pressure to do something about energy than ever before.
A House member from Maine, for example, notes that in his state, homeowners, many earning little more than $30,000 a year, will likely have to spend between $2,500 and $4,000 on heating oil next winter. “They’ll either freeze or starve, and I don’t yet have an answer for them,” he says.
A North Carolina representative is even more blunt. “My constituents are irate with Congress for not doing something to help them with gas prices,” he says, “and if we don’t have anything to show, there’ll be a lot of surprises for both parties next November.”
Congress may have little tangible to show for its efforts on energy so far, but that doesn’t mean there aren’t good ideas around. The 2005 Energy Policy Act and the 2007 America COMPETES Act, for instance, contained many worthy R&D goals, but funding hasn’t followed. The new 35-mile-per-gallon CAFE standard Congress and the White House adopted last year for 2020 was long overdue, but it isn’t aggressive enough, given known automotive technologies.
Effective energy strategies based on good science are fairly easy to envision. But getting them over the political hurdles is much more difficult.
Science looks long term. Politics focuses on the next term. And that mismatch makes it hard to find the right answers to the energy crisis. We’ll see whether Washington can kick the instant gratification habit this time around: the response to the upcoming APS Energy Efficiency Report could be a leading indicator.
Oh, and for Pickens’ windmills to be fruitful and multiply, science needs to find better ways to store electricity when the wind doesn’t blow.