Understanding Energy Issues

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"Understanding Energy Issues"

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John McCain, talking up Sarah Palin, became the latest of many to tout energy policy as her area of expertise: “She understands the energy issues better than anybody I know in Washington, D.C.”

This isn’t what you’d call a groundless claim. She’s the governor of Alaska. Alaska has a lot of oil and gas drilling. The state basically depends for its revenue on energy resource extraction and that’s the mainstay of the Alaska economy. So she no doubt knows all about various aspects of the energy sector that a governor of Oregon or Indiana would never worry about. But this all depends on a very curious understanding of what “the energy issue” is. For most of the world, the current situation of high and rising energy prices is problematic — a big drag on the economy. But it’s not bad everywhere. It’s a cliché at this point to observe that the leaders of states like Iran, Russia, and Venezuela are sitting pretty at the moment. But this principle doesn’t exclusively apply to “bad guy” dictatorships. Business is booming in the pro-American Gulf monarchies. And also in Alaska! What for most of the world is the “problem” of sky-high energy prices is the solution for places like Alaska and Russia that don’t have real economies but are seeing prosperity anyway thanks to skyrocketing oil and gas prices.

Looked at in that light, it’s not at all clear why you’d regard an Alaska politician as expert in “the” energy crisis. Alaska politicians never worry that energy may be getting too expensive and think about how to respond. They worry that energy might get too cheap! Alaska politicians don’t develop expertise in energy conservation measures or alternative fuels, they develop expertise in fighting with out-of-state executives about how to divide the profits that come from expensive energy. That’s the energy problem people think about in Alaska, Oklahoma, and parts of Texas and Louisiana but it’s not the energy problem people worry about in Michigan or Ohio or Virginia or Florida or New Mexico or Colorado or most anywhere else in the country.

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