Congress and the Global Energy Crunch

The only certain thing about the world’s energy future is uncertainty.  That seemed to the consensus of a panel of experts at the Woodrow Wilson Center May 21 on the topic, “Congress and the Global Energy Crunch.”  Former Congressman Phil Sharp (D-Ind.), said past predictions by governments and academics about future energy scarcity as the world’s population and energy needs grew “have been wrong.”  We found more energy sources than predicted, he added, but the supply will not always be there.  “In the 1970s, the only question was how much energy prices would increase.  But in 1986, they took a plunge.  Then everyone was caught unawares when prices rose again around 2003-2004.”  But, with new discoveries of oil and natural gas reserves and the development of new technologies to get to them, the costs have come down more than predicted, Sharp noted.  

David Conover, senior vice president at Dutko Grayling and a former Senate environment committee staff director and Department of Energy official, noted that significant progress has been made in the U.S. energy picture as production has risen, and the electricity and transportation sectors have become more efficient.  “We are awash in natural gas” and the prices have come down considerably from $15 per million British Thermal Units (BTU) in 2005 to around $2 today.  Industries and electrical utilities are converting to natural gas, some without even have to retrofit.   Conover said Congress should be not expected to do much in the way of new legislation in the near term, focusing more on extending some of the tax breaks for renewable sources and maintaining funding levels for innovation initiatives in the America Competes Act.

Robet Simon, staff director of the Senate Energy and Natural Resources Committee, agreed that little should be expected of Congress which is locked in stalemate on so many issues and today is five times less productive legislatively than the 80th Congress which President Harry Truman criticized as a “do nothing Congress.”  Simon said Congress’s productivity has dropped as its partisan polarization has increased, making it extremely difficult to find compromises on anything.  He observed that we can expect transformative changes in energy in the future, much of it originating in the lesser developed countries rather than in the more developed countries of the OECD—the 34-member Organization of Economic Cooperation and Development.

Jennifer Steinhauer, a congressional correspondent with the New York Times, expressed surprise that none of the panelists that preceded her had mentioned the Keystone XL pipeline permit which congressional Republicans have attempted to expedite over President Barack Obama’s objections.  The pipeline is designed to carry synthetic crude oil and diluted bitumen from the oil sands in northeastern Canada to refineries in the U.S.  She noted that the GOP has attempted to attach approval to all manner of bills, from the payroll tax holiday measure to the transportation bill now pending in a House-Senate conference committee.  Democrats, meanwhile, are attempting to close loopholes in the tax code for the oil and gas industries for use as offsets to pay for programs they are pushing—something opposed by the industry and many Republicans.     

Sharp and Simon both said it is a myth that the U.S. doesn’t have an energy policy.  “We have dozens of energy policies,” Sharp noted.  “The question is whether they coherent and are appropriate to our needs.”  And they concurred with Conover on the “episodic” nature of energy policymaking, usually in response to some foreign crisis that captures the public attention and concern.   Simon observed that no action is taken in the middle of an episode, but that instead members simply engage in argument rather than in accomplishment.  “It’s usually about two years later when things have settled down and there is some space for maneuvering, that they begin a real dialogue and work out solutions.”   The three congressional energy veterans agreed that by the time an energy bill works its way through both houses of Congress, it is usually diluted to such an extent by compromise between the two houses and competing interests that only incremental solutions are what is finally signed into law.  “While there is always much talk about the need for a comprehensive national energy policy,” Sharp said, “I don’t see how you get that without a Soviet-style system which most people would not want.”

Sharp cautioned against the easy lure of the slogan, “energy independence” which he said is not realistic.  At the same time, he noted it is not true that we are more dependent on foreign oil than we were during the energy crises of the 1970s.  We have moved from 60% foreign dependence then to less than 50% today, and will probably move closer to 30% dependence over the next decade or so as more domestic sources of energy are developed.  Finally, the panel agreed that energy would only become a major issue in the 2012 presidential and congressional election campaigns if there is another spike in gas prices which are currently falling after a jump earlier in the year.

This event is sponsored by the Congress Program at the Woodrow Wilson International Center for Scholars and the National Capital Area Political Science Association.