The Problem with Alligators

John C. Tobin

It is said that it is very difficult to think about how to drain a swamp when you are up to your ass in alligators, -- even though a drained swamp will make the alligator problem much easier to solve.  But draining a swamp is very time-consuming with no immediate rewards and it is human nature to put off such long-term problems.  Perhaps this is why even the US Congress is looking for quick fixes to such swamps as Corporate Malfeasance, Social Security, Medical Insurance, and Energy Policy.

Once again the energy industry is focused on the alligators brought to light by the congressional debate over the latest incarnation of a National Energy Policy (NEP).  Certainly many immediate gators, such as taxation, land access, etc. are very important to the energy industry and, hence, to the consumer.  And Congress has its own gators in CAFÉ standards, ANWR, ethanol and renewables, etc.  Make no mistake; all of those gators are very real.  But they are only there because the swamp they thrive in has never been drained.

As painful as it may seem, draining the swamp is a matter of working long and hard toward a truly stable and sustainable NEP.  This would be a policy that reflects not only the reality of the global nature of the energy markets and energy’s role in the global economy and the global environment, but also the geologic and economic realities of our own natural resource endowment.

As they explain in elite MBA programs, people are working on tactical, short-term problems, while paying lip service at best to the long-term strategic issues.  So with today’s emphasis on quick payout, be it re-election or next quarter’s earnings, there is little surprise that this current cut at a NEP is found wanting in terms of solving real strategic energy issues.

Now that the battle is nearing an end for this current effort to define policy, it would seem to be a good idea to mobilize the industry in a swamp draining effort. Chapter 2 of the President’s proposed policy recommended an energy education program. 

 “The NEPD Group recommends that the President shall direct the Secretary of Energy to explore potential opportunities to develop educational programs related to energy development and use.  This should include possible legislation to create public education awareness programs about energy.  Such programs should be funded and managed by the respective energy industries, and should include information on energy’s compatibility with a clean environment.”

The primary reason for recommending this energy education program is the recognition of the need for an informed public if we ever hope to have any policy that is stable and sustainable.  An energy-literate public is the foundation upon which the details of such a policy can be built.

It is only a sustainable energy policy that can give stable and predictable signals to the industry regarding taxation and regulation, etc.  With these uncertainties minimized, the risk premium that the industry must factor in to its economic decisions is reduced and can be passed on to the consumer. 

In an ideal world the energy industry would put together such broad-based education programs on its own. No one and no group is better qualified than the energy industry itself to carry out this strategic task.  But the realities of having a very segmented industry and no real leadership in sight suggest that if such a National Public Energy Education program is worthwhile, the initial leadership probably falls to government. 

One of the best ways to start would be with a broad-based energy education program (i.e., BTUs in any form, including conservation and energy efficiency), as recommended in Chapter 2, that targets all of society: pre-school through the AARP.  Then an informed public would demand such a long-term, far-reaching policy.

It does feel good to win some battles and slay some gators.  However, if the energy bill in its projected form is passed, even that feeling will be only one of instant gratification at best.  It is also said that, “History teaches that men, nations and energy companies behave wisely once they have exhausted all other alternatives.”  Let’s hope that this process of exhaustion is near completion.  Because the longer industry and government delay in accepting the responsibility of draining the swamp, the more likely the nation is to relive the mistakes of the past, or worse.

Remember that it’s the gator still hidden in the swamp that is going to have the worst bite.

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Tobin is the Executive Director of the Energy LITERACY Project