Paying the Price for Bush's Retro Energy Policy
The new sales pitch for President Bush is that he's a forward-thinking visionary, right? His policies in the Middle East were, it turns out, not about the bloody debacle in Iraq today but about democracy spreading throughout the region in a glorious future. And his plan to fix Social Security is not at all about privatizing the jewel of the New Deal but simply about ensuring a safe and secure system well past 2052.
But when it comes to dealing with the many energy-related crises we're facing, can the Bushies really go on pretending that their policies are any more forward-looking than a rerun of "That '70s Show"?
Exhibit A is the president's bizarre and long-standing obsession with drilling for oil in the Arctic National Wildlife Refuge, which just got Senate approval last week. I mean, how retro can you get? Instead of pushing to increase fuel efficiency standards that could save millions of barrels of oil each day and calling for a national commitment to investing in renewable sources of energy, he's after one more fix of dinosaur byproducts from one of the world's last pristine places.
Which might be understandable if making an Exxon Mobil theme park out of the refuge would actually reduce our dependence on foreign oil. But it won't. At best, there's only enough oil there to satisfy U.S. demand for about six months. And it won't be available for at least a decade--which is the only forward-looking aspect to Bush's ANWR dream.
The consequences of Bush's head-in-the-tundra policies are already all around us--starting with the record prices Americans are paying to gas up their cars. The national average just raced past $2.10 a gallon--up 21 percent from last year. The U.S. remains the world's largest oil consumer, but with growing countries like China and India demanding more and more oil, and the world's refineries already close to maxed out, things are only going to get worse. How long will it be before filling stations are asking: "Cash, Credit or Home Equity Loan?"
In response to this mounting economic calamity, President Bush summoned all his authority as leader of the free world and, uh, well, sent an official complaint to OPEC ministers meeting in Iran. I'm sure it was very strongly worded. In any case, most experts agree that even OPEC can't pump enough additional oil to make a long-term difference.
Meanwhile, the president's old oil company pals are raking in record profits. Exxon Mobil, for instance, more than doubled its cash flow last year, ending 2004 with $23.1 billion in its bulging coffers. In fact, every time the price of a barrel of oil goes up a dollar, Exxon's accountants chalk up another $550 million in after-tax profits. Indeed, the Wall Street Journal reported last week that oil companies are actually having a hard time figuring out what to do with all that cash.
The president's outdated energy policies are also pushing us to the brink of an economic and ecological catastrophe brought about by global warming. Temperatures are climbing, sea levels are rising, Antarctica is thawing--and these are just the tip of the rapidly melting iceberg. The winter ice cap at the North Pole has shrunk 20 percent in the past two decades, and all that disappearing ice is going to reappear in the form of rising seas threatening coastal areas from New York to New Orleans.
Our MBA president's energy plan is designed to coddle corporations, of course. But the most surprising aspect of the scheme is how bad it has been for business (non-oil business, that is). Oh, those unintended consequences.
Just look at the head-on collision at General Motors, which, along with the rest of the industry, has enjoyed one fuel economy loophole after another. The company bet the farm on hulking gas-guzzlers and engines whose basic designs date to the 1950s. Now, with gas prices heading through the sunroof, demand for SUVs has tumbled--and with it, GM's fortunes. Despite rebates as high as $6,000, sales of models including the Hummer H2 have dropped by double digits. As a result, GM has taken a $4 billion cash flow hit and laid off thousands of workers--yet losses are still expected to reach $850 million in the first quarter of 2005 alone.
At the same time, Toyota and Honda, companies that have shown a commitment to higher fuel efficiency and fuel-saving hybrid technology, are running away with Detroit's market share. In true Neanderthal fashion, GM has responded to its troubles by redoubling its focus--and its multibillion-dollar advertising budget--on hawking the upcoming models of its SUVs. They just don't get it--and for that they are paying a heavy price.
And our leaders in Washington--their pockets stuffed with oil, gas and auto-industry donations--have been willing accomplices in this financial fiasco. By keeping mileage standards for SUVs lower than for cars, allowing unconscionable fuel efficiency loopholes that exempt monster trucks like the Hummer H2, and giving a special tax break allowing write-offs up to $100,000 on luxury SUVs, they helped create an artificial market for gas guzzlers--and helped lead GM to the corporate ICU.
Bush and company call themselves free marketers, but by indulging Detroit they've discouraged innovation and made it much easier for companies like GM to slowly destroy themselves--and their workers. It's assisted suicide, Beltway-style.
Tom DeLay and Bill Frist should immediately call another midnight session of Congress to look into this. And someone needs to wake up President Bush before his habit of looking in the rear view mirror when it comes to energy policy leads us even further off the road to energy independence--and straight over a cliff.
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