Video: Bush obeys the law of supply and demand

Earlier today, the White House joined John McCain in demanding an expansion of American energy production. Howard Kurtz believes this to be a transparently coordinated effort between the Bush administration and the McCain campaign, and I’m not discounting that possibility. However, it’s just possible that two people can see the results of restricted supply and increasing demand and reach the same conclusion that the solution is to boost supply. Bush makes specific reference to that economic principle in the very beginning, and notes that he has called for loosening restrictions on production for years:

Bush outlines four steps in his proposal:

1. Increase access to the outer continental shelf (OCS)
2. Start using oil shale
3. Use ANWR
4. Expand refining capacity

All of these are “urgently needed”, as Bush states.  We can potentially recover 800 billion barrels from shale, which would be enough to keep America’s needs fulfilled for decades without importing anything at all.  The OCS would add tens of billions of barrels from just what we know exists now, and perhaps like Brazil, we will find even more oil in those regions.  Right now we are importing gasoline because we have outstripped our refining capacity, which unnecessarily adds to the costs at the pump as well as complicating shipping security.

I’d trade off ANWR if we could get the other three.  It holds an estimated ten billion barrels of oil and would provide a substantial supply increase, but we can address that later if we’re bringing in oil from shale and the OCS.  ANWR could stand as a reserve under those conditions, and it may make passage of such a bill less complicated in Congress.

For refining, I’d add one more condition: an end to state formulations for gasoline.  Our national refining capacity would have a great deal more flexibility if we didn’t have dozens of different mandates for the composition of gasoline.  Since gasoline gets refined and shipped across state borders, the federal government does have jurisdiction if it chooses to use it — and it has in times of emergency, such as with Hurricanes Katrina and Rita.  That would allow all US refineries to produce the same formulation and to shift as necessary to meet demand when damaged or undergoing maintenance.

When will Congress take up this challenge?  And who will stand against it in the face of voter anger over fuel prices and the inflation they have wrought?

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