By Sam Parry As Campaign 2000 enters its stretch run, the combination of high oil prices and a close presidential race has pushed the energy issue to the political forefront where it has not been since 1980. Yet,
lessons learned in the campaigns of two decades ago have not been lost
on today’s major party candidates as they debate two of the biggest
challenges of the new century: securing adequate supplies of energy and
protecting the environment. During
the 1970s, presidents Gerald Ford and Jimmy Carter saw their popularity
suffer due to gas lines and federal programs demanding energy efficiency
from the American people. Given the political fate of those two
presidents, losing in consecutive elections in 1976 and 1980,
politicians largely have avoided making intrusive demands on American
lifestyles since then. Today,
Texas Gov. George W. Bush’s strategy generally follows the politically
popular course charted by Ronald Reagan and George H.W. Bush in the
1980s, opposing painful environmental restrictions and seeking greater
oil production to meet U.S. energy demands. Vice President Al Gore tries
to redefine the issue by putting energy conservation and economic
vibrancy on the same side – though like President Clinton, Gore avoids
confronting the American people with tough conservation standards. In
an energy policy address on Sept. 29, Gov. Bush, the ex-oil man, called
for more oil drilling within the United States and its coastal areas,
along with strengthened diplomacy toward oil-producing states to secure
their petroleum at moderate prices. One
of Bush’s most controversial initiatives would open a part of
Alaska’s Arctic National Wildlife Refuge to oil drilling. Bush also
advocated construction of more nuclear reactors and research into
cleaner burning coal. [For details, see Bush’s campaign Web site, www.georgewbush.com.] By
contrast, Gore stresses investments in new technologies for increasing
fuel efficiency in cars and trucks and developing alternative fuel
sources. Gore’s plan would encourage energy savings through a detailed
list of tax credits. More
broadly, Gore sees his energy initiative as a “next stage” of
economic progress for the United States. Gore says investing in clean,
renewable energy sources not only will reduce U.S. dependence on foreign
oil, but will help transition the national economy from one based on
fossil fuels to one that invests in the energy sources of the future.
[For details, see Gore’s campaign Web site, www.algore.com.] Gore,
who wrote the pro-environmental book Earth
in the Balance (published in 1992), now is trying to rewrite the old
political rule book by erasing the dichotomy that pits jobs against the
environment. The Democratic nominee has tried to sell the notion that
protecting the environment can be good for the economy and create –
rather than eliminate – high-paying jobs. “We
don’t have to degrade our environment in order to secure our energy
future,” Gore said in response to Bush’s proposal to open up the
Arctic Refuge for drilling. “We shouldn’t invade precious
environmental treasures like the Arctic National Wildlife Refuge in the
pursuit of an energy solution that would take years to implement, and in
the end, would yield just months of increased oil supply.” Bush,
however, portrays Gore’s policies as impractical and even laughable.
Like his father – who mocked Gore as “Ozone Man” in 1992 because
of Gore’s warnings about the emerging threat of global warming and
other atmospheric changes – George W. Bush ridicules Gore and his
positions. “The
vice president likes electric cars – he just doesn’t like making
electricity,” Bush joshed during his energy speech. Yet,
behind the electoral strategies exist complex economic and political
realities that have attracted little attention from the U.S. news media.
Powerful economic forces have always driven the politics of oil – and
that is still the case in 2000. Like
any market-based commodity, the price of oil is determined by the law of
supply and demand. When supply and demand are in balance, prices are
stable at what are deemed their natural levels. But when this balance is
knocked out of whack, prices go up or down based on the relative
strength of demand to supply. Most oil experts agree that the spike in oil prices this year has been caused, in part, by a decrease in the supply of oil, particularly from the 11 nations that make up the Organization of Petroleum Exporting Countries (OPEC). That has coincided with an upward trend in the world’s demand for oil over the last two decades, particularly in the United States. In
the U.S., the popularity of sport utility vehicles (SUVs) and other
light trucks has contributed to the rise in oil consumption. The fuel
efficiency gains made in the 1970s have been effectively wiped out. As a
result, the United States, with only 4 percent of the world's
population, now consumes a quarter of the world's oil and is importing
more than half of its supply. [International
Herald Tribune, Sept. 26, 2000] In
total, the world now consumes more than 75 million barrels of oil every
day, almost 20 million barrels by the U.S. This represents a global
increase of 9 million barrels per day since a decade ago, a third of
that comes from U.S. consumption. Since
the world produces around 74 million barrels per day, there is a
shortfall of more than 1 million barrels. By contrast, a decade ago, the
world was producing almost 1 million barrels of oil more than it
consumed every day. [Energy Information Administration, www.eia.doe.gov/emeu/steo/pub/a3tab.html] With
demand now outstripping supply, prices spiked -- hitting to a 10-year
high of $37.50 before falling back about 15 percent since President
Clinton announced release of 30 million barrels from the U.S. Strategic
Petroleum Reserve. Despite that short-term drop, prices seem likely to
hold at historically high levels. To
ensure what they call a “fair price,” OPEC members want to keep
supplies tight. OPEC has set this target price at $22 to $28, though
countries such as Libya, Venezuela and Iran seem prepared to stabilize
prices at an even higher rate, somewhere above $30. Venezuelan President
Hugo Chavez declared that the world will have to get used to paying the
true costs for oil production. The
financial problems faced by oil-producing countries like Venezuela
represent the other edge of the oil price sword. Venezuela is a large
but poor country with an annual government budget of $26.7 billion
(compared to the United States' budget of $2 trillion), half of which
comes from oil proceeds. Venezuela's official unemployment rate is 15
percent and an astounding 80 percent of Venezuela's 23 million people
live in poverty. [Associated Press, Sept. 26, 2000] When
the price for a barrel of oil plummeted last year to less than $10,
Venezuela and other OPEC nations were hit with devastating budget
shortfalls. President Chavez was forced to slash Venezuela's government
spending, a move that exacerbated a severe recession. The
spike in oil prices can be seen as helping oil-producing nations like
Venezuela meet their national needs. Thanks to the increased revenue
from oil prices, Venezuela’s economy, which shrank 7 percent last
year, is expected to grow a modest 1.5 percent this year. On
the environment front, many oil-producing nations have yet to develop
tough standards on par with the U.S. to deal with pollution associated
with oil production. As a result, many of the facilities and pipelines
are not monitored effectively and contribute to long-term local and
national pollution problems. These hidden costs, which are not
accurately reflected in the price of oil, often fall on vulnerable and
poor indigenous communities dependent on the land for survival. In
recent years, non-governmental organizations have sought to hold oil
companies accountable for these costs, with mixed success. Civil suits
brought in U.S. courts against UNOCAL for its activities in Burma and
against Royal/Dutch Shell for its activities in Nigeria have so far
failed to achieve their goals of punishing these companies for oil
extraction that damaged the environment and caused human suffering. But these efforts have prompted growing public demands for new environmental standards to prevent companies from exploiting lower standards in the developing world, a position that has gained the support of the Gore campaign. |
