How Obama Can Regain the Initiative on Energy

While it may be hard to stomach, there is no denying that John McCain has been leading the debate on energy policy. A number of recent polls has established a clear trend in favor of oil drilling and exploration and investment in nuclear power over conservation and regulation -- among both liberals and conservatives. In addition, the latest report from James Carville and Stan Greenberg, two campaign consultants, has revealed that Obama has been losing ground to McCain and that he has not effectively addressed the shift in public sentiment.

According to their results, a stunning 6 out of 10 voters now favor McCain's drilling proposal. More worrying, they note, is that voters are rejecting Obama's message of renewable fuel investment coupled with energy conservation by relatively large margins. Though disappointing, their findings are not, in themselves, particularly surprising: With the economy in disarray and gas prices continuing their inexorable rise, it was inevitable that a majority of voters would eventually opt for the solution that they perceived would bring them short-term relief at the pump -- conservation and climate change be damned. What is more disappointing is that Obama has not been pressing McCain harder on the details of his energy plan and that he has not been countering the outrageous claims made about offshore drilling.

A perfect place to start is with Think Progress' excellent myth-busting piece on the supposed benefits of offshore drilling. As the Bush administration's own Energy Information Administration (EIA) has said, access to new coastal regions would not have a measurable impact on domestic crude oil production or prices before 2030, at the earliest. Even after 2030, the EIA states that "any impact on average wellhead prices is expected to be insignificant" over the long-term.

The other myth conservatives have been spreading to stoke voter concern is that China is stealing "American oil" off the coast of Cuba. Despite being exposed as an utter fabrication -- even Cheney was forced to retract the claim -- conservative legislators and pundits have been repeating it on an almost daily basis. The right's other favorite claim is that offshore drilling is environmentally benign -- that not a single drop of oil was spilling during Hurricanes Katrina and Rita. As the Think Progress crew notes, that is, of course, a bald lie: Major onshore and offshore spills, accounting for well over 743,700 gallons, occurred due to the hurricanes. In total, there were 595 oil spills distributed throughout the Gulf Coast region.

In a column for Portfolio, Howell Raines masterfully exposes many of the glaring oversights made in media reporting over high gas prices. He quickly dispatches the oil industry's favorite excuse, that rising oil prices simply reflect changing supply and demand, by citing the work of Don Bartlett and John Lee, two veteran investigative journalists:

"The bottom line for the oil people is, How much can I make while spending the least I can get by with on refineries, synthetic fuels, and for exploration and drilling on the vast, unused acreage in existing oil leases?" Barlett says. He notes that Canada has become the United States' No. 1 oil supplier by funding joint government-­industry exploration of the tar-sand fields of Alberta. "The most chilling statistic is Exxon Mobil's. It spent twice as much last year to buy back stock as it did on exploration."


Supply and demand? Sure, but as John Lee, a business journalist at the Wall Street Journal and the New York Times for many years, reminds me, supply and demand in oil are not just "two pie charts--where it comes from, where it goes, measured maybe five years ago." There are more complex reasons for pain at the pump. "American gasoline prices have always reflected the latest spot price, namely what you have to pay to buy bulk gasoline on the open market. This is last-in pricing, rather than pricing based on inventory costs."

Now, let's say you're an oil company selling bulk gasoline, and suppose your inventory contains some gasoline made from $140-a-barrel oil and some that was purchased for $75 a barrel. That leaves a lot of room for price manipulation.

He goes on to note that oil companies largely helped create this supply crisis by closing over half of their 300 U.S. refineries over the last 25 years. And all those Republican complaints about excessive environmental regulation stifling new refinery construction? Raines is having none of it:

Studies by Cambridge Energy Research Associates, a respected, oil-friendly consulting firm, indicate that even if all environmental regulations were removed from refinery construction, few would probably be built right away because of a 75 percent rise in construction costs since 2000, largely driven by the increased fuel cost of transporting building materials.

I could go on, but it's really not that hard to find a number of other articles exposing the GOP's spin on the benefits of offshore drilling. Just rebutting these fallacious claims won't do, however, and, on that front, there is much Obama could do to bolster his position.

The first thing he should do is come clean with the American public and simply admit outright that there are no immediate panaceas for the current energy crisis. While it may not be a popular message, Obama has demonstrated before -- in his critique of the gas tax holiday, for example -- that he can successfully make his case on principle. Breaking our addiction on foreign oil will require some difficult sacrifices -- sacrifices that can be alleviated by robust investment in clean energy technologies and a more equitable carbon tax system that would make companies pay to pollute. Tom Friedman made some wise comments about this dilemma in his most recent column:

When a person is addicted to crack cocaine, his problem is not that the price of crack is going up. His problem is what that crack addiction is doing to his whole body. The cure is not cheaper crack, which would only perpetuate the addiction and all the problems it is creating. The cure is to break the addiction.

Ditto for us. Our cure is not cheaper gasoline, but a clean energy system. And the key to building that is to keep the price of gasoline and coal -- our crack -- higher, not lower, so consumers are moved to break their addiction to these dirty fuels and inventors are moved to create clean alternatives.

I understand why consumers think we have a gasoline price problem -- because they are immediately hurt by higher gas prices and the pump is where most people touch our energy system. They tend not to see the bigger picture. But that is why you have a president: to explain that and lay out a response.

To affect prices in the short-term, Obama could advocate further use of the Strategic Petroleum Reserve and force oil companies to exploit their existing leases before opening up new areas to offshore drilling. Though it might upset a large chunk of voters in the farm states, he could support eliminating the tariff on Brazilian sugar-cane ethanol. It may not be the most ideal solution (but, then again, neither is his dubious support for corn ethanol), but it could help lower prices and provide a cleaner, more cost-efficient fuel source.

Other no-brainers include boosting R&D support for advanced battery technologies; providing tax credits or other financial incentives to carmakers building plug-in hybrids and zero-emission vehicles; and increasing funding for public transit infrastructure around the country. On the regulatory side, an Obama administration should also push for higher fuel economy standards. According to research done by the Union of Concerned Scientists, increasing our federal standards to over 40 mpg by 2015 and 55 mpg by 2025 would save 3 times more oil by 2025 than could be recovered by drilling in ANWR. Even something as simple as having drivers check the air pressure on their tires regularly could save thousands of barrels of oil a day.

The senator from Illinois should get a few pointers from Al Gore and make a similar speech in which he lays out his vision for a bold energy policy under an Obama administration -- one in which risks to the climate are mitigated with a strong embrace of renewable, carbon-free energy sources. As he has shown with his speeches on race and national security, Obama has a unique ability to distill a complex issue and make it accessible to a broad swathe of voters. It's about time he uses it.