Published on Sunday, May 20, 2001 in the Raleigh News & Observer
Driven to Drill by a Smokestack Mentality
by Gwynne Dyer
LONDON -- Teck Cominco, the world's biggest zinc mining and smelting group, is planning to shut down its smelter in Trail, British Columbia for the summer as soon as the Californians turn on their air conditioners. With electricity selling at up to $300 on the spot market, about four times the rate for which the company contracted to buy it from BC Hydro, there's far more profit to be made from selling the electricity to energy-starved Californians than from using it to smelt zinc.
What's more, Californians are already paying over $2 a gallon at the fuel pump, and it may hit $3 before summer's end. That is over half as much as Europeans spend on fuel (and since many suburban Californians drive thinly disguised assault vehicles that need to be refilled twice on the way to the supermarket, they may actually end up paying more per mile than Europeans).
So there is clearly an energy crisis, and though Californians are bearing the brunt, all Americans are suffering. Aren't they? The Bush administration has been devoting a great deal of effort to telling Americans that they are, or if they aren't already, they will be soon.
"If we fail to act, we could face a darker future, a future that is unfortunately being previewed in rising prices at the gas pump and rolling blackouts in California," said President Bush in St. Paul, Minnesota on Thursday, unveiling a 163-page plan that was put together by a team led by Vice President Dick Cheney. According to Bush, the only solution to this apocalyptic crisis -- "the most serious energy shortage since the oil embargoes of the Seventies" -- is to "expand and diversify" U.S. energy supplies.
That means drilling for oil in a wildlife reserve in Alaska, easing pollution controls on existing power plants and refineries, subsidizing new nuclear power plants, and generally bulldozing aside any objections to producing and using more energy in the United States. But what's odd about this so-called crisis (and very different from the 1970s) is that it is only happening in the United States.
Nowhere else on the planet is suffering from unusually high prices at the fuel pump. International oil prices are neither rising nor especially high in historical terms. Nowhere else in the developed world is facing electricity shortages and California-style blackouts.
The United States is so big and inward-looking that most Americans simply don't notice what's happening in the rest of the world, so the rhetoric about an energy crisis escapes serious criticism on that count.
But many Americans are aware that the California blackouts are due to a badly botched privatization program that is certainly not going to be copied elsewhere. So why would the blackouts spread across the country?
Fewer Americans realize that high pump prices are also a purely local problem, caused mainly by the dramatic shift in U.S. consumer preference away from cars and towards far less fuel-efficient light trucks and sports utility vehicles. These now account for half of all new private vehicle purchases, and their higher fuel consumption is the main reason that U.S. fuel stocks are 10 percent lower than a year ago.
Refinery capacity is slow to respond to changes in consumption patterns, and so prices go up until it expands. And that's all: there is no energy crisis.
So why has the Bush administration put so much of its political capital into building up the appearance of a crisis and then promoting policies that delight the 'old economy' giants of the coal, oil, gas and nuclear power industries? Can it really be just a deliberate scam to put money in the pockets of their friends?
I doubt it. I think it's not so much the money as the connections, the loyalties and the perspectives. Bush, Cheney and Commerce Secretary Don Evans are all former oilmen, and even National Security Adviser Condoleezza Rice, though an academic, sat on the board of Chevron and has an oil tanker named after her. Other cabinet members have close links to old-fashioned heavy industry, like Treasury Secretary Paul O'Neill (aluminum) and Interior Secretary Gale Norton (lead), while not one comes from the "new economy": from the media, from communications technology, or even from high finance.
Basically, this is a smokestack-industry group of people taking a smokestack approach to the energy issue. "Conservation may be a personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy," said Cheney, calling for the construction of one new power plant a week for the next 20 years -- a total of over 1,000 plants, mostly coal-fired.
Yet the Energy Department concluded last November that simple energy efficiency measures could avoid the need for 610 of those plants, while another 180 could be replaced by expanding alternate energy sources like wind, solar and geothermal power. That means only 10 new conventional power plants would be needed each year despite a growing U.S. population, and the report recommended that these be high-efficiency natural gas plants rather than coal-burning ones (let alone nuclear ones).
What has changed since November? Only the administration.
One does not want to accuse the people around Bush of cynical manipulation of public opinion and subservience to special interest groups. But the only charitable alternative is to conclude that they are creatures of intellectual habit, and not very bright at that.
Gwynne Dyer is a London-based independent journalist.
Copyright 2001 News & Observer