The energy bill that emerged from Congress this past summer could be the last of its kind. Certainly it ought to be. Missing the point at such an inordinate expense of effort, words, and dollars is plain bad government.
At only a little under 2,000 pages, the new legislation is exhausting but, surprisingly, by no means exhaustive. Somewhere in the vast spaces of the Energy Policy Act, you might think, room could have been found for actions that actually addressed the two main energy-policy challenges of the next decade: global warming and the national-security implications of dependence on imported oil. But no, the authors of this purportedly comprehensive law mostly chose to concentrate on other issues. Severely pressed for time (remember, they had been working on this for years), they had urgent battles to win on subsidies and tax breaks for their respective energy-producing constituencies.
None of this is new, admittedly. Energy bills have been that way for as long as anybody can remember. So why are things likely to be different when the next energy bill gets written? Because, for the first time, economics and politics are starting to align to that end.
Economics starts with the price of oil. When this sits at around $50 a barrel or higher—and, more important, is expected to stay there—ambitious efforts to conserve the stuff look attractive. Businesses and consumers economize. Firms invest in oil-saving technologies, including new fuels. Oil producers respond as well, adding to refining capacity (the chief bottleneck of late), spending more on exploration, and, as the frontier of profitable extraction advances, bringing previously marginal sources on-stream. In the past demand and supply have both responded to higher prices even more powerfully than expected.