The main backers of drilling are the state of Alaska, which will get oil royalties; unions, which will get jobs; and conservatives for whom sticking it to hyperventilating enviros is a matter of principle. But oil companies aren?t in the mix. ?If the government gave them the leases for free they wouldn?t take them,? an administration official recently told the New York Times.
The rest of Bush?s energy bill is a grab-bag of subsidies for new technologies ? for ?clean? coal, fusion energy, hydrogen-powered fuel cells, etc. ? that are likely dead-ends, or the people interested in developing them wouldn?t be so needful of the federal teat. The reason that gas prices are up now is supply and demand. Economic growth around the world, especially in China, is creating more demand. Eventually, the market will adjust. High prices will force people into more fuel-efficient cars, thus relieving demand and the upward pressure on prices.
That?s how the market works. As energy expert Jerry Taylor of the Cato Institute points out, the Bush administration first came up with its energy bill in 2001, when the California energy crisis prompted predictions of electricity shortages and skyrocketing prices everywhere. The energy bill never passed, but investors moved to capitalize on the high prices by building more generating capacity, creating a current glut in electricity supply. Bush can either wait for the market to take hold again, or try waving that magic wand.