Bush's Energy Disaster

As the Senate cast its votes on the energy bill last Friday, giving Republicans a little legislative victory before everyone skipped town for the summer, Bush issued a congratulatory statement. "I applaud Congress," he said, "for a bill that will help secure our energy future and reduce our dependence on foreign sources of energy." A nice sentiment -- except that "securing our energy future" is the one thing the bill won't do.

Then again, that was never the intention. This was Bush's baby from the start, the fruition of Cheney's infamous task force, to which he invited every industry honcho he could find to write their own tickets right into the country's energy policy. After that, of course, it was larded with extra tax breaks and subsidies, like $500 million in deep-water drilling that will likely wind up in Tom DeLay's hometown, Sugar Land, and billions more that will drain straight into industry coffers.

This at a time when high oil prices are sending industry margins soaring: Exxon-Mobil's third quarter last year was the most profitable corporate earnings in history. Boone Pickens, head of BP Capital Management, a billion-dollar hedge fund that makes people wealthy trading energy futures and related investments, sums up the high times like so: "I've never had so much fun in my life."

But the giveaways are the least of the bill's problems. When both sides claim victory, it's a sure sign of mediocre legislation. Republicans got to line some pockets and call it economic progress. Democrats were able to shelve (for now) a few hot-button issues like the MTBE indemnity and drilling in ANWR. (And when barely derailing a raid on ANWR is considered a Democratic victory, it only shows how much the Republicans have been able to set the agenda.) Likewise, Republicans were able to take out the fuel-efficiency standards and global-warming language that so offended them. In the end, the energy bill was a hodgepodge, a collection of provisions with no vision.

The problem is we need vision with energy most of all. Because there will come a day, sometime fairly soon, when a barrel of light, sweet crude will emerge from some oil field and the world will have officially burned more oil than what's left in the ground. That moment -- peak oil, it's called -- is not a question of if but when: Some say the tap-out starts out in 30 years; Exxon-Mobil's own recently published estimate says five; one Princeton geologist says maybe next year. When it does happen, it may not be celebrated, or even noticed right away, but it will mark the beginning of the long slide to an inevitable reconfiguration of, well, civilization as we know it.

If that sounds alarmist, recall that our vast economy of just-in-time, transnationally shipped inventory is fueled entirely by petroleum. As is our food supply, whose end products like poultry and beef are elaborate (and remarkably inefficient) conversions of petroleum energy into food calories. The widespread use of petrochemical fertilizers to grow feed for livestock has turned agriculture into one of the biggest sources of oil demand after transportation. It's a demand that's skyrocketing worldwide: With current measures, experts predict global oil consumption will rise 57 percent by 2025 -- just in time for that coming peak. If small supply shocks like OPEC's embargoes in the '70s can create recessions, what would happen in the face of significant, persistent, growing shortages?

A Greater Depression, or even chaos, is the answer, as was discovered in late June at a war game called "Oil Shockwave." The participants, including many former Republican administration members, spent several days running through various scenarios of disrupted oil supply. Even with small-scale trouble, the exercises quickly spun out of control. "The American people," concluded former CIA Director Robert M. Gates, "are going to pay a terrible price for not having an energy strategy."