Ross Mackenzie

Where are we on energy? In a hole of our own digging.

Think about it.

For most of his five years in office, President Bush has been begging Congress to move on energy - and he long was stymied by the congressional left. Out of one side of its mouth the left acknowledges our need for energy independence. Out of the other side it gives an endless litany of "reasons" we cannot do precisely the things we must to move us along the independence road.

Finally, in August, the president signed an energy bill full of congressional compromise. For instance, the Energy Policy Act of 2005 provides neither for oil drilling in Alaska's Arctic National Wildlife Refuge nor for setting higher fuel-efficiency standards in cars and trucks - two provisions the administration vigorously has sought.

Yet the energy act does sanction (a) expanded federal risk insurance for new nuclear plants, (b) funds to encourage the development of hydrogen-fuel-cell technology, (c) tax incentives for clean-coal technology, (d) $15 billion in federal funds for new, alternative and renewable resources, and (e) a new inventory of oil and gas resources on the Outer Continental Shelf.

Nice - sort of.

Then came Katrina and Rita to remind us that the energy bill crucially did not address the nation's limited refining and pipeline capacity. The hurricanes shut down dozens of refineries, disrupted one-fifth of the country's gasoline supply (resulting in correspondingly higher prices at the pump), and helped double natural gas prices from year-ago levels - a datum that come winter could devastate the bank accounts of the 70 million U.S. households heated with gas (or about 57 percent of all U.S. households).

Federal policy has assisted in multiple ways the developing crises in refined petroleum and natural gas. Regarding natural gas, easy-to-reach gas is tapping out, while federal policy long has discouraged - and still does - incentives for accessing the hard-to-reach.

Regarding refining capacity, federal policy has hugely contributed - through environmental demands and requirements for boutique fuels - to a plunge from 324 refineries in 1981 (daily processing 18.6 million barrels of crude), to 149 in 2004 (daily processing 16.8 million barrels), and all while domestic demand for refined petroleum goes up. What about Big Oil's rip-off prices and obscene profits, such fashionable topics for bashing over on the left? In the 10 years beginning in 1994, the refining industry spent $47 billion not on new refineries, but on revamping existing ones to comply with federal environmental requirements.


Ross Mackenzie

Ross Mackenzie lives with his wife and Labrador retriever in the woods west of Richmond, Virginia. They have two grown sons, both Naval officers.

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