When the announcement that John McCain had chosen Sarah Palin to be his running mate broke across the political landscape like an Alaskan mountain avalanche, many analysts, including yours truly, jumped to the conclusion that her background in energy issues made her a savvy choice in an era of record-breaking oil prices. McCain's "drill here, drill now" mantra was taking a bite out of Obama's poll numbers, and the immediate expectation was that Palin would be a potent vehicle for delivering energy-related soundbites.
But it didn't turn out that way. On Wednesday morning, oil traded at $65 dollars a barrel, more than 50 percent off its July peak of $147. The financial crisis proved more riveting than gas prices, and Sarah Palin's rocky performance as a debutante on the national political stage swiftly obliterated the conventional wisdom that she could be an asset to the McCain campaign.
So now, with less than a week before Election Day, the decision to have Palin deliver an "energy security" policy address seems a bit too little, too late to make much of a difference, unless one accepts the insider scuttlebutt that Palin is already positioning herself for a 2012 run at the presidency. A routine restatement of McCain campaign talking points on energy independence is unlikely to move poll numbers much at this stage. Far better, one would think, to content oneself with the ridiculous assertion that an Obama presidency will be the second coming of Vladimir Lenin.
But Palin's speech is still worth some attention, because it clearly makes the case for why the McCain-Palin agenda is fundamentally wrong for the United States.
Palin started off by acknowledging that "the price of oil is declining largely because of the market's expectation of a broad recession that would lower demand." She was absolutely correct to note that "this is hardly a good sign of things to come," and that "when our economy recovers, and growth once again creates new demand, we could run into the same brick wall of rising oil and gasoline prices."
This is true -- indeed, the Wall Street Journal reported on Wednesday a warning from Faith Birol, chief economist of the International Energy Agency, that "In two years' time, 'we could see much higher prices than we saw three months ago,'" if new investments in oil and gas production went by the wayside because of lower prices right now.
Sarah Palin made the case in Ohio that what America needs to achieve energy independence is more can-do American ingenuity -- as an example she pushed her own efforts to get a new natural gas pipeline started.
The result is, finally, progress on the largest private-sector infrastructure project in North American history -- a nearly forty billion dollar natural gas pipeline to help lead America to energy independence. When the last section is laid and its valves are opened, that pipeline will lead America one step farther away from reliance on foreign energy. That pipeline will be a lifeline -- freeing us from debt, dependence, and the influence of foreign powers that do not have our interests at heart.
Sorry Sarah, but no matter how many pipelines Alaska builds, America will not be freed from reliance on foreign energy. In fact, by the time the pipeline is finally built, we're more likely to be more dependent on foreign energy than less, unless much vaster changes in our energy infrastructure are brought about than anything promised by McCain or Palin.
Both the McCain/Palin campaign and the Obama/Biden campaign are making unrealistic promises about the prospect of reaching energy independence. As Obama himself notes, when you consume 25 percent of the world's oil but own only 3 percent of the world's oil reserves, energy independence isn't ever going to come from expanding domestic production.
The difference between the two campaigns is that McCain/Palin is more unrealistic. Obama has made it clear that his energy independence plan will requires massive expansion of alternative and renewable energy resources and huge investments in conservation and energy efficiency, even as he acknowledges that more investment in offshore drilling, nuclear power, and clean coal will also most likely be necessary. (McCain and Palin routinely misrepresent Obama's position on nuclear power and clean coal, and the vice presidential candidate did so again today.)
Palin devoted one paragraph of her energy security policy speech to alternative energy solutions.
In our administration, that will mean harnessing alternative sources of energy, like wind and solar. We will end subsidies and tariffs that drive prices up, and provide tax credits indexed to low automobile carbon emissions. We will encourage Americans to be part of the solution by taking steps in their everyday lives that conserve more and use less. And we will control greenhouse gas emissions by giving American businesses new incentives and new rewards to seek, instead of just giving them new taxes to pay and new orders to follow.
That's not enough. True leadership on energy requires devoting more than one paragraph to vague handwaving about wind and solar and greenhouse gas emissions. Economic turmoil and low oil prices may have shunted renewables and conservation off the main track for now, but to quote Palin, "this is hardly a sign of good things to come."
Here's the unavoidable truth:
The Financial Times reported on Wednesday that according to a draft it has obtained of the annual World Energy Outlook report from the International Energy Agency, "Output from the world's oilfields is declining faster than previously thought."
Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent... The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as prices fall and investment decisions are delayed.
Oil companies would certainly be foolish to stand still while prices are low and refrain from investing in new production. But the rest of us would be even more foolish to ignore the accelerating output declines and shrink away from the truly gigantic task of moving the global economy towards a more energy efficient, renewable-reliant future. It won't be cheap -- heaven forbid, it might even require raising taxes! But in the long run, that's what has to happen, and in her speech today, Sarah Palin did not acknowledge it.