Oil Shocked

08/03/2005 09:05 pm ET | Updated May 25, 2011

Why oh why is Bush’s disaster of an Energy Bill not getting more attention? I saw plenty of myopic analysis: Bush on a roll! Washington log jam over! But what about the real issue at stake, which is our long-term, strategically crippling dependence on petroleum. The bill was supposed to be the first effort at an energy policy in ten years. That makes it the first big energy bill since solar and alternative energy technology has become cheap enough to be fully developed and integrated into our economy. It was a chance, then, to actually do something. So what happened?

“I applaud Congress,” Bush said as the Senate was quickly voting on the bill so they cold skip town for the summer, “for a bill that will help secure our energy future and reduce our dependence on foreign sources of energy." A nice sentiment -- except that’s the one thing it won’t do. 

Then again, that what never the intention. This was Bush’s baby from the start, the fruition of Cheney’s infamous task force, to which he invited every industry honcho he could find to write their own tickets right into the country’s energy policy.

This at a time when high oil prices are sending industry margins soaring: Exxon-Mobil’s third quarter last year was the most profitable corporate earnings in history. Boone Pickens, head of BP Capital Management, a billion-dollar hedge fund that makes people wealthy trading energy futures and related investments, sums up the high times like so: “I’ve never had so much fun in my life.”

But the giveaways are the least of it. Not like I expected anything productive on energy from Bush, but energy is the one area of policy where we need real vision. Because there will come a day, some time fairly soon, when a barrel of light, sweet crude will emerge from some oilfield and the world will have officially burned more oil than what’s left in the ground. That moment -- peak oil, it’s called -- is not a question of if but when: some say the tap-out starts out in 30 years; Exxon-Mobil’s own recently published estimate says 5; one Princeton geologist says maybe next year. When it does happen, it may not be celebrated, or even noticed right away, but it will mark the beginning of the long slide to an inevitable re-configuration of, well, civilization as we know it.

If that sounds alarmist, recall that our vast economy of just-in-time, trans-nationally shipped inventory is fueled entirely by petroleum. As is our food supply, whose end products like poultry and beef are elaborate (and remarkably inefficient) conversions of petroleum energy into food calories. The widespread use of petrochemical fertilizers to grow feed for livestock has turned agriculture into one of the biggest sources of oil demand after transportation. It’s a demand that’s skyrocketing worldwide: with current measures, experts predict global oil consumption will rise 57% by 2025 – just in time, or even well past that production peak. If small supply shocks like OPEC’s embargos in the 70s can create recessions, what would happen in the face of significant, persistent, growing shortages?

A Greater Depression, or even chaos, is the answer, as was discovered in late June at a war game called “Oil Shockwave.” The participants, including many former Republican administration members, spent several days running through various scenarios of disrupted oil supply. Even with small scale trouble, the exercises quickly spun out of control.

Present was former CIA Director James Woolsey and he was troubled by the outcome. Woolsey, friend to Paul Wolfowitz, Donald Rumsfeld, Douglas Feith, and member of the bonafide neo-con Defense Policy Board, has become an alternative energy buff in the interest of national security. A few weeks later, Woolsey presented a paper along with George Schultz, Reagan’s Secretary of State, to the Committee on the Present Danger about how our oil dependency makes the country extremely vulnerable.

They argued that national security requires a radical change in energy policy, starting with fuel-efficiency standards. Woolsey and Schultz also dared to draw the less talked about blood/oil connection: that the spread of the Wahhabi ideology and a lot of terrorist planning has been funded by petrodollars.

If energy conservation, then, is a first line of national defense, why do so many jackasses drive their SUV’s around with American Flags all over them? More importantly, why did the country get an Energy Bill that, according to the administration's own Energy Information Administration (EIA), will actually raise gas prices and increase oil demand nearly 14 percent in just the next six years?

(This post became a longer article, available at the LA Weekly)