America’s ‘Energy Policy’: It’s Still All About Oil

…And then there’s America’s energy policy, and it’s generous to use the word “policy” in describing it. The transition of our nation from a manufacturing to a service economy may be nearly complete, but it’s certainly not reflecting in our continued demand for oil, which is greater than ever.

By necessity (and to its credit), the administration of George W. Bush is now looking at some long-term alternatives to oil dependence, which President Bush rightly labeled an “addiction” in his State of the Union address this past January 31. Since then, it’s a credit to this administration that the phrase “alternative energy”, used historically to describe ethanol and other non-oil energy resources, is losing its relevance as these energy sources become less of an “alternative” and more a part of our deliberations over America’s long-term energy needs. From all of this, a long-term energy policy may yet arise.


Yet, despite the obvious long-term need to adopt these “alternative” approaches to our nation’s energy needs, it’s troubling that Washington feels the necessity to trump market forces by making their production a federal mandate. If ethanol is all that its advocates represent, such a mandate would prove unnecessary because market resources would naturally flow to its development. This is especially true today, in an economy with abundant liquidity and unprecedented levels of available private capital.

What’s troubling amidst all the hype around ethanol, however, is that these market forces have historically viewed ethanol with some degree of trepidation. That may someday change completely; in fact, it appears to be changing at least partly now. But it would be more appropriate to let those market forces flow to our next energy resources, as opposed to mandating one of them–ethanol, as Congress is doing. Federal corn lobbyists: 1, America’s energy interests: 0.

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