The View From Here . . .

By Bob Morgan, Jr.

Perhaps the main reason for the difficult national mood, in which far more people regard the country as on the wrong track, is the price of energy. This price, of course, is reflected on a daily basis in the cost of gasoline at the pump, which now exceeds $4 in most places.

But the solutions to the energy crisis are many and complex, with no single silver bullet.

One part of the solution is conservation. As Thomas Donlan discussed in the book reviewed in this space last week, A World of Wealth , high oil prices are already focusing consumers on using energy efficiently, but there is obviously much more that individuals and businesses can do, from buying energy efficient lightbulbs to driving cars with better gas mileage. (To use an example mentioned this week in The New York Times , air conditioned stores could close their doors rather than let hot air in.). Nevertheless, conservation efforts in the United States have their limitations of effectiveness, since energy demand is rising very quickly in rapidly developing nations like India and China.

Another part is increases in domestic production. The United States has significant untapped resources both offshore and in areas such as national parks like the remote Alaskan National Wildlife Reserve. Obviously this is an area where we must tread with caution since no one desires coastal oil spills or significant damage to pristine areas. On the other hand, improved technology and heightened environmental sensibilities on the part of drillers make this option well worth exploring. The problem is that these projects will take very long lead times and it could be decades before they have a major impact on supplies.

Then there are efforts to increase global supply. Our sometime friends in Saudi Arabia pledged this week to increase pumping of oil in that country, which in theory should help to stabilize prices. (In fact, the promised new pumping has not yet made much of a difference in the price per barrel, perhaps a sign of skepticism in the market.) The United States has done much for the Saudis in supplying weapons and aircraft and diplomatic efforts to ask the Saudis to help us in time of energy crisis make good sense. Another area where supplies should increase is Iraq, where the government there has just entered into agreements with oil companies from the United States and other nations. How much these increases will impact in a world with increasing demands for oil remains to be seen.

Another somewhat temporary tact is an effort to reduce the effect of speculation in the oil markets. According to testimony before Congress, it appears that much of the rise in the oil market can be attributed to participants who have no intention of taking delivery, but are merely betting on a rise in prices. However, whether United States restrictions to curb speculation would actually lower prices, or merely move the market overseas, is problematical.

Finally, of course, there are efforts to develop alternative energy supplies, which would also have the effect of lowering carbon emissions. The basic truth is that wind and solar power are useful in some circumstances but are not yet economically competitive in most areas. Efforts to develop new battery technology, promoted by John McCain this week, would also be helpful, but are still on the horizon. Nuclear power is technologically feasible and effective, but its proponents will have to overcome strong political resistance focusing on its safety.

At present, the energy solution is largely mix and match, and hope for the best.