Reality has a way of bringing some issues into focus and Hurricane Katrina forces energy policy front and center in the political debate. Joe Martin at Theocrats posts some well reasoned thoughts on why Wisconsin Attorney General Peg Lautenschlager is wrong to pursue gasoline price controls. He argues that normal market activity will stabilize this abrupt disturbance of supply more efficiently than political attempts to be smarter than collective demand.
Why is Gas Expensive? Unfortunately, Lautenschlager’s grasp of economics seems to be more tenuous than her grasp of ethics. All of this talk reveals a fundamental misunderstanding of supply and demand. As I discussed yesterday, the current demand for gasoline outstrips the supply by approximately 5 million barrels per day. Gasoline usage must be rationed if stations are to avoid running dry during the middle of the day. High prices are the best possible means of rationing fuel. It’s not a perfect system, but it is the best one available.In the longer term, there are real differences between how Republicans and Democrats approach the future energy needs of this country. Republicans control the oil industry which became dominant because oil it is the most efficient form of stored energy available. The market place made the oil industry wealthy, not government policy.
In their political calculations, many core Democratic leaders believe they need to side with alternative energy sources. UW Madison Professor Joel Rogers and the COWS helped create the Apollo Alliance which is the Democratic Party Plan for Energy Policy.
Beyond Petroleum: While it is difficult to see beyond the incalculable suffering caused by Hurricane Katrina, the impact on U.S. fuel supply is undeniable. … What is absolutely clear, however, is that too much reliance on a single energy source is a dangerous thing. As Katrina illustrated, supply interruptions are beyond our control, and without alternative options, there is no safety net to suppress price movements.Wisconsin Governor Jim Doyle and six other Democratic Governors support the Apollo Alliance. The organization also has considerable backing from numerous union and environmental groups, notably the United Steel Workers and the Sierra Club. The Democrats are offering a vision of the future where hydrogen, derived from water, powers America. There are many other areas where American life needs to change to make this vision viable, but the Democrats are very willing handle the required planning and necessary administration.
The 10 Point Plan: 9. Plan For A Hydrogen Future: Invest in long term research & development of hydrogen fuel cell technology, and deploy the infrastructure to support hydrogen powered cars and distributed electricity generation using stationary fuel cells, to create jobs in the industries of the future.
