Houston Chronicle: Notable absences at energy summit don’t bode well

Feb. 29, 2008, 12:13AM
COMMENTARY
By LOREN STEFFY
Copyright 2008 Houston Chronicle

The topic wasn’t on the agenda, and it wasn’t discussed on any of the panels. But in the convention center hallways and around the luncheon tables, everyone was asking the same thing: Why aren’t they here?

“They” are the presidential candidates, only one of whom deigned to attend the “presidential summit” Thursday that was devoted to energy issues.

Hillary Rodham Clinton spoke Thursday after my deadline. Other than that, it was a presidential summit glaringly unencumbered by presidential candidates.

Their absence is a warning to the American people. Energy, in the presidential race, is a nonissue.

That could have dire economic consequences by the time the next president takes office in January.

“They’re likely to walk into $120-a-barrel oil,” Robert Kelly, chairman of DKRW Energy, which is developing coal-to-liquids and other alternative fuels, told me after he spoke on a panel with other executives. “They’re likely to walk into people being very dissatisfied with having to pay a lot more for gasoline.”

And, he added, consumers are likely to grow frustrated with the intransigence of Washington on energy issues.

“We’re shelling out a half a trillion dollars a year that’s going overseas for oil, and somebody needs to address this,” he said.

Don’t look to the current crop of presidential hopefuls. They favor feel-good political pablum such as “green energy” and conservation.

Renewable energy initiatives are important, and some of Clinton’s ideas — and those of no-show Barack Obama — have merit. John McCain hasn’t even gone that far, barely mentioning energy aside from an endorsement of nuclear power.

Green energy programs are years, perhaps decades, from making a sizable dent in our oil consumption. So what, then, does our next president do in the meantime?

How about $150?

Kelly’s scenario could be conservative. After all, oil prices have doubled in the past year, and they’ve risen fivefold in four years.

If oil continues on its recent trajectory, prices could be at $150 a barrel or more by the inauguration.

“What do we say to the low-income driver who today is putting $3 gasoline in his tank?” Shell Oil President John Hofmeister asked the audience at the start of the event. “We face continuing, eroding social and economic justice.”

Oil, in other words, is an economic issue. As prices rise, it’s in danger of becoming a fuel of the affluent, forming a wedge that widens the gap between rich and poor.

The solution?

“People need hydrocarbons now,” Hofmeister said when I caught up with him later. “In the short term, there is no alternative to more oil and gas and coal.”

The only way to get more oil is to allow more drilling in areas where we’ve said we don’t want it — federal lands, wildlife refuges and coastal regions.

Seeing trees, not the forest

Certainly, oil companies have much to gain from an increase in domestic drilling.

Uncovering more domestic supplies, though, would cause prices to fall, which could take the edge off those record oil industry profits we’ve seen lately.

Unfortunately, those profits are the focus of all the short-term political energy debates. Witness the eagerness by the House this week to enact a new tax on oil companies simply because they’re making a lot of money.

Overlooked is the inflationary impact of rising prices, of the threat that energy poses to our already shaky economy. To politicians, it’s as if energy and the economy are separate issues.

Politicians prefer to float the idea of energy independence, as if it could realistically be achieved in the next decade.

“There’s no magic wand that will make us independent in 10 years,” Anadarko chief Jim Hackett said during a panel discussion. “It’s the biggest fallacy ever foisted upon the populace of America. And it makes great political fodder.”

What he would have asked

I asked Hofmeister later what he would tell the candidates if they’d been
there.

“We have to start with recognizing that energy security requires both short-term and long-term perspectives,” he said. “It’s not credible or sufficient to talk only about long-term solutions. Pious platitudes will not get us more energy.”

The candidates, though, would rather embrace the platitudes, especially the feel-good promise of “green energy.”

In the short term, faced with confronting the economic realities of higher prices and dwindling supply, they don’t even bother to show up.

Loren Steffy is the Chronicle’s business columnist. His commentary appears Sundays, Wednesdays and Fridays. Contact him at [email protected].

His blog is at http://blogs.chron.com/lorensteffy/.

http://www.chron.com/disp/story.mpl/business/steffy/5580743.html