No energy policy, thanks

Among U.S. producers of oil and gas, an old yearning has resurfaced for a national energy policy. In the difficult aftermath of a market crash, the urge is understandable. And it must, for now, be resisted.

The yearning takes one of its several forms in a petition to the Department of Commerce for a ruling, under Section 232 of the Trade Expansion Act, that dependence on imported oil threatens national security. If the department follows historic precedent, it will determine that the phenomenon indeed constitutes such a threat. And there concern will die.

This represents the best probable outcome.

Probable vs. possible

Superior outcomes are, in theory, possible. The government might ease the tax bite on producers when prices plunge. It might increase oil and gas leasing of federal land. It might abandon its crusade to unrealistically reform valuation of production in royalty calculations. It might do any of a number of other things to encourage the production of oil and gas-but probably won't.

It certainly will not, in response to the trade inquiry or anything else, enact an energy policy that would help producers or encourage production. Not now. Not with President Bill Clinton in the White House and Vice President Al Gore trying to succeed him.

An energy policy palatable to the current administration would look much like the June 3 executive order entitled "Greening the Government Through Efficient Energy Management." The strategy: Replace oil with renewable energy. The motivation: environmentalist anxiety.

In the pattern of the Department of Energy's Comprehensive National Energy Strategy, floated early in 1998 and promptly forgotten, the executive order does its part to implement the Kyoto Treaty on climate change, which Congress won't ratify (OGJ, Feb. 16, 1998, p. 19). The federal government, as the nation's largest energy consumer, "shall significantly improve its energy management in order to save taxpayer dollars and reduce emissions that contribute to air pollution and global climate change," the executive order declares. Never mind growing scientific doubt about factors of climate change. The order's first goal is to reduce emissions of greenhouse gases, facility by facility, by 30% between 1990 and 2010.

The order also calls on federal facilities to cut energy use per unit of area. It mandates reductions in use of petroleum specifically. It urges less "total energy use and associated greenhouse gas and other air emissions, as measured at the source." And it encourages use of renewable energy and of electricity generated from renewable fuels. Natural gas scores supportive mention in the executive order-as an alternative to oil.

The executive order is the latest reminder about the Clinton administration's consistent dislike of oil. From the huge energy tax it tried to load disproportionately on oil in 1992 to the token sacrifice of national interests at Kyoto, the administration has done its level best to discourage the use of liquid hydrocarbons. It has leveled similar antagonism toward drilling outside areas not already on production.

Issue by issue

This is not an administration from which a constructive energy policy will emerge. The route to energy security and economic prosperity does not involve fuel choice by politicians and bureaucratic rejection of energy sources favored by economics and physics.

Producers should continue trying to improve the treatment they receive from the federal government. But they should work issue by issue. They should not seek a broad energy policy or even wish out loud for one. What the Clinton team or its Gore progeny might call energy policy would look too much like a Greenpeace manifesto. It would shrink markets for oil, pay lip service to natural gas while displacing it in the market with subsidies for renewables, and diminish access to the resource. Help like that producers don't need and certainly can't afford.