We’re having an energy crisis again. It all sort of makes me reminiscent of the last time we did this, back in 1973, with the Mideast Oil Embargo. Maybe you remember it? I will never forget it, as I was just 17 at the time, the magic age to get my New Jersey Driver’s License. There I was, finally able to drive, sitting in frustration in the gas lines.

Remember the odd-even license plate days? Green or red flags, meaning there was or wasn’t gasoline? Sitting on line for hours to buy the 10-gallon limit? When I drove a carload of friends to a school or religious activity, I would be repaid by their parents in gasoline. The good old days? Hardly. I also remember getting a healthy dose of the flu sitting in the cold in my car. After all, you couldn’t run the engine while you waited and waste all that precious gas.

Of course in 1973, there really was a serious shortage of supply. The question is, do we have one now, and if so, why? Did we fail to learn any lesson s the last time around, thus causing history to repeat itself 28 years later? When times got better, we forget what happened in 1973.

It is not as if there is a real shortage this time, like there was in 1973. To the contrary, refineries are operating at 92 percent of capacity, which could be argued as efficiency. True, we need to increase refining capacity, and there is the problem of there being federal or state environmental regulations requiring 14 different blends of gasoline, so supplies in one area cannot be used in another.

Oil Companies Show Profit
Nonetheless, if someone has to suffer, it certainly hasn’t been the oil companies. Higher gas prices has meant higher profits for them. CBS News reported on April 24th that Exxon-Mobil quarterly profits were up 51 percent, just short of the last quarter, described as the most profitable quarter on record for any American corporation. Ever.

Conoco Oil profits were up 58 percent, the same quarter. Oil company profits reflect the fact that business is just grand under the leadership of Bush and Cheney, both long standing oil industry supporters.

Senate Democrats are correct in calling for a new probe into the oil industry’s record profits.

In an ironic twist, the President may have helped his oil company supporters and contributors snatch up literally the entire tax cut he just enacted. The $100 billion in tax refunds, if offset against as much as $130 billion in higher fuel costs, means that due to price gouging by the oil companies, the money you supposedly save from the tax cut will go right into the pockets of the oil companies.

Like his tax plan, the president’s energy plan is tilted toward the special interests. For good reason, GOP has come to stand for “Gas, Oil & Petroleum.” The oil industry contributed in a big way to the Bush campaign. Now it is payback time.

Republicans oversimplify the situation, telling us all we need to do is increase supply and deregulate the energy industry. The free market will take care of itself, they claim.

But the history of deregulation is not as shining as they would have us believe. Look at the airline industry. Has deregulation been good for the flying public? Less competition for routes, higher fares, and no concern for customer satisfaction is the net result. Has it worked in the telephone industry? Do you have a choice of local service providers at your house? I don’t.

The point is, while deregulation may be a fine ideal, it needs some direction; a government hand, as it were, to keep it steered in the right direction. The recently released Bush Energy Plan steers the car in the wrong direction.

The problem with the Bush proposal is that it is too focused on the supply side of the equation, with little attention paid to reduction of demand for energy use.

In a nutshell, the plan relies too heavily on fossil fuels, promotes the exploitation of wilderness areas which ought to remain protected, minimizes environmental issues and does little to nothing to promote the development of renewable energy sources and conservation. It is a failure to consider the demand side of the energy equation.

Under the President’s plan, even the current power crisis in California is blamed on the supply side. Conservatives tell us that if we built more power plants, drilled more oil, and generated more nuclear energy, California’s problems would not have occurred. This is plainly untrue.

The fact is, California’s problems stem from a flawed regulatory scheme enacted under former Republican Gov. Pete Wilson, in which the price utility companies were allowed to charge was capped, while the price of energy generating was not.

Californians Not Alone
While temporary price caps may be the way to control the California situation, Californians are not alone in their concern about energy problems. Just a week ago, Arizona issued a warning that its residents may also be facing rolling blackouts this summer.

Here in New Jersey we shouldn’t be too complacent either. As a result of deregulation in this state, GPU, one of New Jersey’s major power generators, has sold virtually all of its generating capacity to third parties, without entering into adequate long term contracts to buy power. Because of this, GPU has run up huge deficits, and in 2003 the rate caps will expire.

Meanwhile, Akron-based First Energy is seeking a merger with GPU, which will mean that 2.6 million New Jersey customers will be dependent on an out-of-state generating company for their energy. By the way, First Energy is a major contributor to the Republican Party, and is being sued by the Justice Department for violations of the Clean Air Act. This kind of deregulation, we don’t need.

While we do need to expand our refining capacity and build more power plants, nuclear energy is still questionable, despite Vice President Cheney’s recent pronouncement that “aside from Three Mile Island and Chernobyl,” the industry has a fine record.

Safety issues aside, the Bush plan fails to account for how we dispose of the high-level nuclear waste generated by these plants. For obvious reasons, no one wants such a facility in their own back yard.

We simply cannot dig, drill and mine our way out of this situation. We need to make conservation, energy efficiency, higher mileage standards for our cars and renewable energy sources a main part of the effort. The Bush plan, aside from a tax credit for hybrid gas and electric cars, does little to encourage changes in conservation and consumption.

Why haven’t we exploited solar and wind energy, in parts of the country where they would be useful, and why haven’t we provided the tax incentives for investment in these technologies? As a teen-ager, visiting Israel, one of the memories I still have of the City of Haifa is that every house had a solar collector on the roof. Why don’t we do the same in Florida, California and Arizona?

Working with the free market system, decreasing consumption and developing appropriate new technologies will turn this crisis into an opportunity. Anyone who doesn’t believe that such societal change is possible should simply recall that once our landscape was traversed by horse and buggy. We Americans manage change quite nicely when it is in our best interests to do so.

February 4, 2002