The Energy Trap

Gregg Easterbrook
Gregg Easterbrook Contributing Editor, The Atlantic, Visiting Fellow (2000-08), Brookings Institution, Author, Arrow of History (forthcoming, 2018)

March 25, 2001

Move over, tax cuts—it’s time for oil politics to ooze to the fore. “We’re short on energy, and this administration is concerned about it,” President George W. Bush said last week. Bush, a former oilman, has asked Vice President Dick Cheney, also a former oilman, to head a task force whose aim is to devise a new national energy strategy. The two favor petroleum exploration in the Arctic National Wildlife Refuge, something environmentalists fervently oppose. A nasty congressional and public-relations fight is about to begin.

On March 13, the president announced that his administration would not regulate greenhouse gases, because that might raise energy prices. It was Bush’s first broken campaign promise, though one quietly made, and is unlikely to go away as an issue. Rolling blackouts have returned to California, and the president says they stem in part from too many restrictions on energy exploration; Bush is expected soon to propose easing such rules. Administration officials are privately condemning former President Bill Clinton for having no coherent energy policy, a fair enough charge, though Clinton’s approach was to leave energy supply to market forces, which Republicans normally praise in other circumstances. Lots of oil talk is coming, and it may not be polite.

What’s coming as well is a classic interest-group duel of reciprocal blather. Pro-oil forces will say that drilling in the Arctic National Wildlife Refuge is the sole hope of preventing new gasoline lines, and this surely is untrue. Enviros will say that the Arctic refuge cannot be drilled without horrifying ecological harm, and this isn’t true, either. Sensible, median proposals will get cast aside in the rush to see who can condemn whom most loudly.

Just how much is oil drilling in the refuge really likely to accomplish? The standard estimate, from the U.S. Geological Survey, is that the refuge’s coastal plain contains 3.2 billion barrels of petroleum accessible at about today’s price; optimists hope the refuge may eventually yield up to five times as many. These are significant amounts, though considerably less than the totals for the current Alaska North Slope oil fields that began at Prudhoe Bay. If the optimistic projections turn out correct, the Arctic refuge may hold enough petroleum to cover U.S. needs for between two and three years. If the Geological Survey figure proves correct, there will be sufficient oil to supply U.S. petroleum consumption for roughly six months at current rates.

Opponents use the above statistic to suggest that because the Arctic refuge may turn out to hold less than a year’s total supply, its production would be irrelevant. Hardly. This volume would not all emerge in one burst, but over a period of decades. Lots of oil fields in lots of places are needed for the huge volumes of petroleum that America guzzles. To argue that Arctic refuge oil does not matter because it cannot single-handedly solve petroleum-supply needs is like saying there’s no point in a farmer planting a field because no single farm can possibly feed the nation.

The real flaw in the argument for drilling the refuge is not that 3.2 billion barrels does not matter—surely, it does—but that from an energy-policy standpoint, oil-conservation measures can produce a better effect faster. Improving the gasoline mileage of the nation’s new vehicles by just three miles per gallon would displace more petroleum than the Arctic National Wildlife Refuge is expected to produce. According to calculations by the Natural Resources Defense Council, a more ambitious but technologically feasible goal of raising new-vehicle average fuel economy to 39 miles per gallon over the next decade would displace more than 15 times as much petroleum as the refuge is expected to produce. Though technology exists to improve gasoline mileage without any sacrifice in the way people drive, federal miles-per-gallon standards have not changed in 12 years. Given legal sanction to build oil-wasting sports utility vehicles, auto makers have done so. In turn, because SUVs have pushed up U.S. gasoline consumption in the past decade, supply has become tight and pump prices have risen.

If Bush wants a serious, balanced energy policy, he must include both production incentives and new mandates for conservation, by far the most important of which, from the standpoint of oil equilibrium, is higher miles-per-gallon standards for SUVs and light trucks. Yet, Bush has said nothing about raising miles per gallon. The first major energy bill introduced this year in Congress, by Sen. Frank Murkowski of Alaska—the Murkowski bill is seen as a trial balloon for an expected White House bill—contains numerous provisions for more drilling in the Arctic National Wildlife Refuge and elsewhere, but says not a word about raising miles-per-gallon standards. Last week, new Energy Secretary Spencer Abraham gave his first major policy statement—a speech titled “A National Report on America’s Energy Crisis.” The speech was full of calls for more oil production, yet Abraham never so much as mentioned fuel economy or vehicle miles per gallon.

A balanced national energy strategy might combine higher miles-per-gallon levels for vehicles and other conservation measures with exploratory drilling in the Arctic National Wildlife Refuge, since environmental concerns regarding the latter seem exaggerated. Oil production has been ongoing in Alaska’s North Slope for almost a quarter century, with the Exxon Valdez oil spill the only significant blunder, and Prince William Sound has mostly recovered. North Slope oil production has caused small-scale ecological problems that have not made the newspapers, including many minor crude spills and an estimated 70 waste sites that have some form of contamination, such as spilled diesel fuel. Though troubling, these errors are manageable and nothing like the broad-ranging ecological harm originally forecast for Prudhoe Bay and its pipeline. A 2000 study by the Trustees for Alaska, which opposes Arctic National Wildlife Refuge production, elaborately documented many secondary problems caused by North Slope oil production but no fundamental ecological harm.

This has not prevented opponents from forecasting that refuge oil production will cause “devastating environmental destruction,” in the words of the Natural Resources Defense Council. Yet, any oil prospecting in the refuge will be done with improved technology that causes less environmental disruption than what was first used at Prudhoe Bay, including much more accurate drilling seismology, less-leaky systems and the relatively new adaptation of ice roads. (Rather than paving lanes between drill sites, oil companies have begun to make roads from ice; when the drillers leave, the ice melts and the “footprint” of exploration is gone.) The fact that broad-ranging environmental harm has not happened during North Slope drilling does not, of course, guarantee that it won’t happen in the Arctic National Wildlife Refuge. But the risk seems comparatively small.

If there is going to be a balanced U.S. energy policy, both sides must make concessions. Conservationists must acknowledge that America needs continuing oil production, and perhaps drill rigs in the Arctic refuge must be part of that. Any environmentalist who drives a car and fulminates against oil drilling is talking out of both sides of his or her mouth. Put another way: Only greens who don’t own cars and refuse to ride in cars, taxis, buses, trains or airplanes have a genuine right to denounce oil drilling.

In turn, business lobbies and Republicans in Congress and the White House must acknowledge that conservation is just as important as production. Trying to produce enough oil to fill the tanks of ever-more SUVs will always be a losing battle if the SUVs remain guzzlers. It is unfair—and bad policy—to ask those who love the wilderness to give up some of their claims to the beauty of the Arctic National Wildlife Refuge in order that those who drive wasteful, antisocial large vehicles won’t have to give up anything at all.

Finally, voters must accept that this isn’t just an abstract fight between the zealots of the left and right. Gasoline supplies are sensitive because Americans are buying huge vehicles with huge engines and driving them more and more. You can’t insist on the freedom to buy a wasteful vehicle, then complain about gasoline prices when the laws of supply and demand respond to the consequences of your own choice. Polls currently show that most Americans oppose drilling in the Arctic National Wildlife Refuge, but also want cheap gasoline and insist on the choice of buying SUVs. In that formula, something has got to give. America’s energy problems are caused by Americans—and won’t be solved until Americans face that fact.