Letting the market decide
This op-ed by Charles Krauthammer fairly captures the current conventional wisdom on energy policy: demand is rising, supply is tight, and so the answer is to decrease demand (conserve) and increase supply (drill in the Arctic Refuge and off shore).
The really amusing part is that the conceit — nay, the headline — is "let the market decide energy policy."
But then there’s this:
We have a unique but fleeting opportunity to permanently depress demand by locking in higher gasoline prices. Put a floor at $3. Every penny that the price goes under $3 should be recaptured in a federal gas tax so that Americans pay $3 at the pump no matter how low the world price goes.
Um. Wouldn’t a stiff gas tax kind of influence the market’s decisions about energy policy?
And there’s this:
The U.S. refining industry operates at 96 percent capacity. That is unsustainable. We need the equivalent of the military-base closing commission, whereby outside experts decide which bases should be closed in the national interest. A refinery commission that would situate 15 new refineries scattered throughout the United States (some perhaps on Army bases scheduled for closing) would spread the pain, depoliticize the process and arm us against future shortages.
Gosh, that sounds a little bit like centralized decision making. Wouldn’t that kind of commission impede the gloriously Free Freedom of the Free Market?
The rub here is, everybody — left and right — is coming to see that our current energy policy is dysfunctional. It needs to change.
There is a tiny group of people (overrepresented in the commentariat, but vanishingly rare on the ground) who think the market really should decide energy policy. They want to remove all energy subsidies, tax breaks, regulations, and standards. They want a genuinely free energy market.
This group of people is politically powerless. There’s no sign their ideas have any influence; indeed, under the current administration, all signs point to more and more meddling, cronyism, favoritism, special favors, etc. etc.
So what to do? Well, most people want to tweak the market in various ways. Thing is, those on the right are duty-bound to pretend this is "letting the market decide."