Where do we find power?

Posted: Sep 19, 2000 12:00 AM
The energy drought infuriates in part because there aren't many remedies fished up by intelligent analysis. But this doesn't mean there isn't anything to be done.

A reminder of the industrial world's utter dependence on energy is what happens when it becomes scarce. The consequences aren't only a shortage of energy, but derivative afflictions. Here is the lead from Friday's Slate's "International Papers," by June Thomas:

" Y2K in the U.K. The predictions of the Y2K soothsayers have come true in Britain as the nation's infrastructure collapses: Supermarkets are rationing bread and milk! Hospitals are running short of drugs! Banks have only a few days' supply of cash on hand! Mail deliveries are threatened! Factory production lines could be halted, schools closed, and buses and trains grounded! Even the billion-dollar Millennium Dome seems to be snared by the curse, as the government contemplates its demolition only a year after it opened. The cause of the crisis, however, is not the millennium bug. The country is short on petrol."

Now gasoline in Great Britain sells for about $5.50 per gallon and 75 percent (approximately $4) goes to the government in tax. A reduction in tax is the quickest way to alleviate public pressure, and France has done exactly that, reducing its tax by 15 percent.

This exercise is excruciatingly painful. Look at it this way: If Great Britain lowers the tax on gasoline by, say, 25 percent, that lowers state revenue over the next quarter by the relevant figure. Say, to use round figures, 200 million pounds.

That money, which has been going for general expenses, most notably (to quote British analysts) for the kind of environmental protection and maintenance that are required by the existence of automobile traffic, is now going somewhere else. Where, exactly? Well, it is a form of foreign aid to Saudi Arabia, Russia, Kuwait, Nigeria and Venezuela. To say that isn't an exercise in economic reductionism. That is exactly where the money goes, and it leaves those countries that heretofore had the use of the money needing to find alternative means of raising it.

The beauty of the excise tax on economic merchandise for which the demand is, if not inflexible, militant, is that we are dealing with a form of regressive taxation. Yes, when the gas price rises there is a decline in the use of the car, but it is a reluctant decline. An increase in the cost of gas by 100 percent does not cause a 100 percent decline in the use of automobiles. Cigarettes are analogous: Increase the price of cigarettes by 4 percent and you get a 1 percent reduction in the use of them. Gas, especially in America where the tax is, compared to Europe's, a measly 22 percent, is a Way of Life. And a deprivation of gas is on the order of a deprivation of something guaranteed by the Bill of Rights. The American people are fiercely resistant in the matter.

There is a palliative at hand. We have 600 million barrels of oil in our strategic reserve, topped up for use in case of national emergency. We could ease that oil out at least until the winter fuel crisis abates. But the strategic problem isn't solved. We are not about to invade Saudi Arabia, and we have before faced unsuccessfully the problem of oil oligopoly. The new wisecrack at our expense, from an anonymous OPEC representative, is that the OPEC people will worry about oligopoly after the United States has solved the Microsoft problem.

We are left looking in the face, one more time, of alternative energy sources, specifically nuclear power. The quarrels go on, though not much public attention is given to them. China says its Qinshan project is on line and in two or three years will be making 6.6 million kilowatts of power from the four new plants. Russia is contemplating a huge program over 30 years, and intends to offer its nuclear-plant construction skills to India and Iran. Taiwan is debating whether to go further in nuclear power. Japan plans to proceed with nuclear energy.

Only 6 percent of the world's energy now comes from nuclear power plants. Nuclear energy advocates are advancing what is a form of counter-environmentalist advocacy. The critics of nuclear power have rested their case substantially on the toxicity of accidents of the kind associated with Chernobyl. The pro-nuclear people now stress that the global-warming agents are absent from nuclear power. It is fossil fuels that increase radiation. But that still leaves the problem of accidental leaks and of the disposal of nuclear waste.

Surely this is one for the presidential candidates to explore? Let's hear Mr. Bush talk about the strategic limitations of oil, and Mr. Gore talk about the strategic importance of nuclear energy.