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A Fight over Energy

Author: Robert McMahon, Editor
Updated: May 6, 2008

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Each uptick in prices at U.S. gasoline pumps seems to heighten the importance of energy as an election-year issue. Polls reflect widespread concerns about hardship caused by rising gas prices. On a broader scale, a new report by the Confidence in U.S. Foreign Policy Index found surging worries about the implications of the cost of energy for foreign policy (PDF). The report, conducted by Public Agenda and Foreign Affairs, found six out of ten Americans believe reducing energy dependence would strengthen national security “a great deal.” So with gas prices nationally averaging about $3.60 per gallon, it was not a surprise to find presidential aspirants in the past few weeks seizing on the issue. But the debate so far has met with moans from many policy analysts looking for far-reaching solutions to the country’s energy problems.

Sen. John McCain (R-AZ), the presumptive Republican nominee, has proposed suspending the federal gas tax of 18.4 cents per gallon from the summer driving period between Memorial Day and Labor Day, saying he wanted to give low-income Americans “a little break” (PhillyInquirer). Campaigning ahead of crucial May 6 Democratic primaries in Indiana and North Carolina, Sen. Hillary Clinton (D-NY) endorsed the idea, saying it could be paid for through windfall taxes on oil companies. Her opponent, Sen. Barack Obama (D-IL), criticized it as bad policy. There was no immediate indication how energy issues figured in the voting, in which Obama won North Carolina by a wide margin and Clinton looked to be headed for a narrower victory in Indiana (IndyStar). Obama was on course to retain the overall lead in delegates. The results in both states ended up following a nationwide pattern for the Democratic primaries, with the economy again by far the most important issue for voters in both Indiana (CNN) and North Carolina (CNN), according to exit polls on May 6.

Prior to the latest primaries, the gas-tax-holiday plans found critics in many corners, including in op-ed pages, among economists, and in the halls of Congress (WashPost). New York Times columnist Thomas Friedman went so far as to call it “money laundering: we borrow money from China and ship it to Saudi Arabia and take a little cut for ourselves as it goes through our gas tanks.” Asked about the proposal, President Bush said his office will “look at any idea in terms of energy” but he emphasized the importance of Congress opening up domestic sites like the Alaska National Wildlife Refuge for oil exploration. Washington Post columnist Robert Samuelson agrees, citing estimates of vast reserves domestically that could be extracted safely and in environmentally sensitive ways.

In some ways the Washington energy policy debate appears stalled again, with one side insisting on boosting fossil-fuel resources and the other seeking to put more emphasis on spurring alternatives. But by the end of last year there seemed to be momentum among lawmakers for a new approach to energy problems beyond a policy described by the Wall Street Journal as “enjoy cheap oil.” The Energy Independence and Security Act, signed by Bush in December, called for changing vehicle fuel-efficiency standards for the first time in a generation and mandated a fivefold increase in biofuels production—to 36 billion gallons—by 2022. For much of the presidential campaign, Clinton, Obama, and McCain, have been calling to further shake up the status quo on U.S. policies related to energy and climate change. McCain even spoke out against ethanol subsidies in the corn hub of Iowa before that state’s caucuses. But few on the campaign trail or in Congress have been calling for immediate sacrifices by Americans, whose gasoline use continued to increase monthly through March 2008 (PDF) despite rising prices.

Other matters may intrude on the way the country uses energy. For one, the sharp rise in food prices has some in Congress talking about reconsidering the new ethanol production mandates, because of their heavy reliance on corn (The Hill). And infrastructure demands may increase pressure for higher federal gas taxes to build up crumbling roadways (Those taxes provide a major chunk of state funding for road projects). Land use planners have been urging for years an improved mechanism for funding upgrades to the country’s transportation infrastructure. A 2007 report by the Urban Land Institute and Ernst & Young cites a “deferred maintenance crisis” (PDF) and projects “enormous and ominous” funding gaps for U.S. infrastructure.

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