Our guest bloggers are Daniel J. Weiss and Alexandra Kougentakis, a Senior Fellow and the Director of Climate Strategy and a Fellows Assistant at the Center For American Progress Action Fund.
President Bush took the opportunity at his press conference on Tuesday to have his “I told you so” moments on high energy policies. He may be laughing but the joke is on us. The two oil men in the White House – supposed energy experts – brought Americans the highest energy prices ever. Just look:
– Gasoline prices have risen from $1.70 per gallon in May 2001 to $4.08 per gallon in June 2008
– Home heating oil prices have risen from $0.77 per gallon in May 2001 to $3.81 per gallon in June 2008
– Natural gas prices have risen from $4.36 per thousand cubic feet in May 2001 to $10.82 per thousand cubic feet in June 2008
– Propane prices have risen from $1.37 per gallon in May 2001 to $2.74 per gallon in June 2008
– Residential electricity prices that have risen from 8.8 cents per kilowatt hour in May 2001 to 11.6 cents per kilowatt hour in June 2008
President Bush tried to claim his innocence in the devastating energy crisis:
Again, I don’t want to be a ‘I told you so,’ but if you go back and look at the strategy we put out early on in this administration, we understood what was coming.
It’s hard to see what he is complaining about. Over the course of 2001-2006, Congress for the most part did implement the Bush-Cheney energy plan. According to Administration officials, 60% was in effect by March 2002, 75% by December 2004, and 95% by March 2005. Energy Secretary Samuel Bodman said, as part of an online interactive forum on March 9, 2005, “During his second week in office, the President put together a task force to address America’s energy challenges… And over the past four years, we have implemented 95 percent of those recommendations.” In fact, today’s energy policies are primarily a creation of his administration.
His other comments also reflected his disconnection from the reality of record prices:
[Democratic leaders] can pass energy legislation. I readily concede that, you know, it’s not going to produce a barrel of oil tomorrow, but it is going to change the psychology that demand will constantly outstrip supply.
This mirrors recent statements by John McCain, but psychology isn’t going to provide real relief to high energy prices. He notes, offshore drilling will do nothing to address the immediate problem of the supply factor. The Energy Information Administration estimate for expanding drilling into sensitive areas will be too tiny to notice. The global market is affected by such a diverse set of factors that even if offshore drilling was to take place, “any impact on average wellhead prices is expected to be insignificant”:
Obviously good conservation measures matter…but the consumer is plenty bright…The marketplace works…I think people ought to conserve and be wise about how they use gasoline and energy…But my point to you, Mark, is that, you know, it’s a little presumptuous on my part to dictate to consumers how they live their lives…people are going to make adjustments to meet their own needs.
Unfortunately, many Americans don’t have the ability make adjustments. The location of their homes and jobs, and the efficiency of the car they drive are fairly fixed. That explains why gasoline consumption has dropped only 3.8% from a year ago even though pump prices are up a third. America needs a crash program to make hyper efficient cars, make transit more accessible and affordable, and reduce the vehicle miles traveled. President Bush has opposed all of these measures.
Bush was asked about selling some of the 706 million barrels of oil in the Strategic Petroleum Reserve, which is at 98% capacity:
Strategic Oil Petroleum Reserve is for, you know, emergencies. But that doesn’t address the fundamental issue…Well, if we’d have done it seven years ago we’d be having a different conversation today.
Right now, some Americans can barely afford to drive to work, seniors face cuts in home aid due to the high cost of gasoline, and college students are forced to double the use of their bedrooms as classrooms. This certainly seems like an emergency.
Releasing oil from the Reserves would increase the supply in less than three weeks. This would quickly drive down prices, as was the case following Hurricane Katrina, when Bush was willing to release 30 million barrels of oil:
I mean, all of us want to get away from reliance upon hydrocarbons, but it’s not going to happen overnight. One of these days people are going to be using battery technologies in their cars.
Bush has opposed many efforts to extend tax incentives for renewable energy and efficiency. This includes a new incentive for the purchase of “Plug-in Hybrid Vehicles” that primarily rely on batteries for power, though use some gasoline as a back-up. Chevrolet plans to sell its PHEV Volt in 2010.
Bush’s has also opposed efforts to boost the use of renewable energy from the wind, sun and other sources. John McCain agrees, saying “The wind industry is doing fine, the solar industry is doing fine.” This is yet another way that McCain is running for Bush’s third term.
Bush believes that speculators have nothing to do with the high price of oil:
Now, people say, what about the speculators? I think you can’t help but notice there is some volatility in price in the marketplace, which obviously there are some people in the — buying and selling on a daily basis. On the other hand, the fundamentals are what’s really driving the long-term price of oil, and that is, demand for oil has increased, and supply has not kept up with it.
According to energy experts, the speculators have increased the price of oil by up to $30 per barrel.
There were myths aplenty mentioned during this press conference. One of them was the “No More Refineries” story that has been told since he took office:
I’m sure you know this, April, but we haven’t built a refinery, a new refinery in the United States since the early ’70s.
There has been huge consolidation and more efficiency among oil refineries. From 1987 and 1997 refinery output increased. Between 2005 and 2006 companies expanded refinery capacity and increased earnings by $372 million.
If anyone is entitled to an “I told you so moment,” it’s the American people. They have long favored an increase in fuel economy standards to make cars go further on a gallon of gas. In 2001, Bush opposed the effort by Representatives Ed Markey (D-MA) and Sherwood Boehlert (R-NY) to increase fuel economy standards. With Bush’s support, this could have become law. The U.S. would consume 1 million fewer barrels of oil per day. It would have reduced gasoline costs for families too.
In his 2006 State of the Union, Bush famously said “America is addicted to oil.” But he remains hooked on the same old policies that leave us worse off than the day he uttered those words.