Paul Krugman - N.Y. Times (June 20, 2008)

June 20, 2008

Op-Ed Columnist
Driller Instinct
By PAUL KRUGMAN

Blaming environmentalists for high energy prices, never mind the evidence, has been a hallmark of the Bush administration.

Thus, in 2001 Dick Cheney attributed the California electricity crisis to environmental regulations that, he claimed, were blocking power-plant construction. He completely missed the real story, which was that energy companies — probably some of the same companies that participated in his secret task force, which was supposed to be drawing up a national energy strategy — were driving up prices by deliberately withholding electricity from the market.

And the administration has spent the last eight years trying to convince Congress that the key to America’s energy security is opening up the Arctic National Wildlife Refuge to oil drilling — even though estimates from the Energy Information Administration suggest that drilling in the refuge would make very little difference to the energy outlook, and the oil companies themselves aren’t especially interested in punching holes in the tundra.

But it still comes as a surprise and a disappointment to see John McCain joining that unfortunate tradition.

I’ve never taken Mr. McCain’s media reputation as a maverick seriously, because on most issues, he’s a thoroughly conventional conservative. On energy policy, however, he has in the past seemed to show some independence. Most notably, he voted against the really terrible, special-interest-driven 2005 energy bill, which was backed by the Bush administration — and by Barack Obama.

But that was then.

In his Monday speech on energy, Mr. McCain tried to touch all the bases. He talked about conservation. He denounced the evils of speculation: “While a few reckless speculators are counting their paper profits, most Americans are coming up on the short end.” A weird aspect of the current energy debate, incidentally, is the fact that many of the same market-worshipping conservatives who first denied that there was a dot-com bubble, then denied that there was a housing bubble, are utterly convinced that nasty speculators are responsible for high oil prices.

The item that made news, however, was Mr. McCain’s call for more offshore drilling. On Tuesday, he made this more explicit, calling for exploration and development of the currently protected outer continental shelf. This was a reversal of his previous position, and it went a long way toward aligning his energy policy with that of the Bush administration.

That’s not a good thing.

As many reports have noted, the McCain/Bush policy on offshore drilling doesn’t make sense as a response to $4-a-gallon gas: the White House’s own Energy Information Administration says that exploiting the outer shelf wouldn’t yield noticeable amounts of oil until the 2020s, and even at peak production its impact on oil prices would be “insignificant.”

But what I haven’t seen emphasized is the broader picture: Mr. McCain has now aligned himself with an administration that, even aside from its blame-the-environmental-movement tendencies, has established an extensive track record as the gang that couldn’t think straight about energy policy.

Remember, they didn’t just insist that the Iraqis would welcome us as liberators; on the eve of the Iraq war, administration officials were also adamant that regime change in Iraq would add millions of barrels a day to the world oil supply, driving oil prices way down. (In fact, Iraq’s oil output took five years just to recover to preinvasion levels.)

So why would Mr. McCain associate himself with these characters? The answer, presumably, is that it’s a cynical political calculation.

I’m reasonably sure that Mr. McCain’s advisers realize that offshore drilling would do nothing for current gas prices. But they may believe that the public can be conned. A Rasmussen poll taken before Mr. McCain’s announcement suggests that the public favors expanded offshore drilling, and believes (wrongly) that this would lower gasoline prices.

And Mr. McCain may also hope to shore up his still fragile relations with the Republican base. As anyone who has read what’s in his inbox after publishing an article on oil prices can testify, there are many people on the right who believe that all our energy problems have been caused by sanctimonious tree-huggers. Mr. McCain has just thrown that constituency some red meat.

But I very much doubt that Mr. McCain’s gambit will work. In fact, it’s almost certainly self-destructive.

To have a chance in November, Mr. McCain has to convince voters that he isn’t just Bush, continued. Energy policy is one of the areas where he could best have made that case.

Instead, he has ceded the high ground on energy to Mr. Obama, and linked himself firmly to the most unpopular president on record.