Video: Energy outlook

By John W. Schoen Senior Producer
msnbc.com

With gas prices back on the rise this week, Susan in Florida is wondering why the government hasn't made energy conservation a higher priority. And a number of readers, like Mark in Wisconsin, have asked: why rebuild New Orleans when it's so vulnerable to flooding? (We thought that answer was obvious.)

Why don't we, or more to the point, why haven't we, stressed conservation instead of consumption as a national policy?
-- Susan D. Wellington, Fla.

The simple answer is that — until very recently — it’s been extremely unpopular politically for anyone in government to stand up and tell Americans to use less energy. Every politician alive today remembers what happened to one-term President Jimmy Carter when, in response to the oil shortages of the 1970s, he urged Americans to turn down the thermostat and wear sweaters. Many people (wrongly, we believe) interpreted that call as an admission of defeat — an acknowledgement that conserving energy meant lowering our standard of living.

For most of this decade, the word “conservation” was rarely spoken on Capitol Hill. Even proponents of conservation preferred to speak of “increasing energy efficiency” — because of the negative connotations associated with the “C” word. And as long as energy was still cheap, it was tough to make the case for cutting consumption.

The Bush administration, early on, took the view that the solution to tight energy supplies was to develop more of it. Vice President Dick Cheney made this clear four years ago when, as head of a task force on energy, he described conservation as a “personal  virtue” that has no place in national energy policy. Those who agree with this view (again, we’re not among them) believe that curbing energy consumption amounts to curbing economic growth.

But, unlike the 1970s when oil supplies were restrained, the current energy crunch is happening because demand is growing more quickly than supplies. Oil companies and OPEC producers have plenty of money to spend on expanding capacity, and many of them are doing so. But these projects can take up to a decade to fully bear fruit. In the short run, global energy producers can’t seem to make oil fast enough to keep up with a rapidly expanding global economy. (Some experts even believe that we’ll soon reach the peak of oil production. If they're right, we’ll have no choice but to make the oil we produce work much harder.)

So if you can’t make more oil fast enough, the only other alternative is to try to curb demand. And there are really only two ways to do that: Either the world economy stops growing, or we figure out how to do more with less oil. Given the choice between global recession and conservation, I’ll take conservation. Further, with oil prices now above $60 a barrel, the economics of saving fuel are much more favorable than they were when oil sold for $25. Some people are already figuring this out: that’s why gasoline consumption has dropped faster than usual after the summer driving season ended. It’s too soon to say for sure, but there are signs that new car buyers are also shifting gears to higher mileage models.

Alas, as recently as August, when he signed the long-debated energy bill into law, President Bush was still focused mostly on trying to increase oil supplies. What a difference a pair of storms makes. Today, with gasoline headed for $4 a gallon, he has begun to urge Americans to conserve. But as Congress considers a sequel to the energy bill (to enact measures that didn’t make the first cut), few of these measures, like easing restrictions on building refineries or drilling for more oil in Alaska, will do much to advance conservation. Tougher laws requiring car makers to turn out higher-mileage vehicles, for example, got shot down in the debate over the first energy bill, and they don’t appear to have much more support this time around.

Unless and until our Congress hears from enough voters urging a bigger role for conservation in energy policy, it’s hard to see how (or why) those elected representatives will do more to promote fuel savings. The good news is that we have an election coming up next year that could dramatically reshape that Congress.

So the real answer is: The reason conservation has gotten so little attention is because voters haven’t told the government that’s what they want. And if the 2006 election leaves the current Congress largely intact, we’ll likely further postpone the day when conservation begins to play significant role in curbing the growth of energy demand.

Why is the government (and the residents of New Orleans) so set on rebuilding that area? Not to seem cold-hearted, but the area (basically a bowl surrounded by water) does not seem to be the best place for homes or businesses. Unless you can rebuild everything flood- and hurricane-proof, won’t the events of the past few weeks happen again? And even if you build everything to withstand these disasters, is it worth the cost?
          --
Mark, Wisconsin

The obvious answer is: The reason to rebuild New Orleans is that hundreds of thousands of people call it home. But we’ve heard from a number of readers asking this question, so maybe it isn’t so obvious to some. 

First of all, New Orleans isn’t the only place on earth where people have settled below sea-level. The Dutch, for example, spent hundreds of years building an entire country behind a gigantic system of dikes to keep the water out. So it’s not as uncommon as it may seem to those who live on higher ground.

It’s also not all that expensive. The cost of building levees to sustain a Category Five hurricane is well known. It’s on the order of several hundred million dollars. The Army Corps repeatedly asked for the money to do so and was turned down.

So our government, in denying the Corps the funds it needed to do its job, made a bet — that the worst-case scenario wouldn’t happen. It lost that bet, and it will now cost several hundred billion dollars to put New Orleans back together.

Even if you want to be “cold-hearted” about the current options, imagine the cost of not rebuilding New Orleans. Aside the loss of one of the country's great cultural and historic centers, the city generated something like $5 billion in tourism last year. Hundreds of thousands of people still own property there: Would you have the government take it away from them?

With scientists telling us that we’re entering a new cycle of more frequent — and more destructive — hurricanes, the question of rebuilding flood-prone areas, unfortunately, will likely come up again. During the past few decades of relative hurricane calm, a lot of shorefront development has put many more people in harm’s way. Do we tell those people: "Sorry, you’re on your own: if you get hit by the next hurricane, don't expect help from your government."

And would a policy of “no rebuilding” apply to the rest of the country? According to that logic, you could say: "Gee, if Milwaukee were laid to ruins, why spend the money to rebuild it? It’s awfully cold there, and we make plenty of beer elsewhere. Do we really need Milwaukee?"

You get the idea.

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