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Wile E. Coyotenomics I: Just-in-Time Politics

The Financial Times Has a View of Bush Energy Policy

The Financial Times editorial page tells us what it thinks of George W. Bush and his energy policy: / Comment & analysis / Editorial comment - Bush runs on empty: Pity the leader of a nation that regards cheap petrol as a basic human right. That is President George W. Bush's position as pump prices start to approach a high of $3 a gallon ahead of next month's driving season - and next autumn's mid-term elections - while his approval ratings are closing fast on a low of about 30 per cent.

Do not pity him for too long, though, because Mr Bush has really squandered the chance to do something about what he has correctly characterised as America's "addiction" to oil.

After the attacks of September 11 2001, the president had a unique opportunity to create a bipartisan and public consensus behind increased energy efficiency and reduced energy dependency, especially on oil imported from politically unreliable parts of the Middle East, Africa and Latin America. He did not take it. Instead, the administration took four years to produce an energy bill that, in spite of some electricity network improvements, in no way addresses the fact that per capita energy use in the US is far higher than in any of its competitors - in transport, for example, three times that of Japan.

This level of energy intensity has little to do with high rates of economic growth and a great deal to do with driving habits. More fuel-efficient engines do not translate into more miles per gallon if cars keep getting heavier and faster, and the culture and the economic incentives ensure that the Hummer trumps the Hybrid.

This week the president announced a package of measures to the Renewable Fuels Association. He plans to "leave a little more oil in the market" by suspending deposits in the strategic petroleum reserve; issue a series of waivers on clean fuel standards; and order a probe into possible price manipulation by big oil. The markets rightly read this as inconsequential populism and the oil price remains stubbornly high.

More to the point, and unlike previous price spikes from the Arab oil embargo to the three Gulf wars, it is not just current prices that are high. The markets are forecasting prices above $70 a barrel five years ahead. The era of cheap oil may be over.

High global economic growth, especially in Asia, is powering demand for a tight supply of oil, made tighter by insufficient refining capacity. Most of all, there are probably no big new oil fields to be discovered, while nearly all the big old oil fields are in regions (not just the Middle East) offering an infinite variety of political risk. As but one example, a more considered, less bellicose US attitude towards Iran would do more to steady the oil market than all Mr Bush's measures put together.

In the end, however, America's addiction can be beaten only by hard policy decisions: rigorous fuel-efficiency standards, a tax regime that prices petrol realistically, as well as a framework of incentives for investment in alternative technologies. Meanwhile, the best agent of change is expensive oil.

Impeach George W. Bush. Impeach him now.