THE AMERICAN Automobile Association reported last week that summer gasoline prices may have peaked - news that will be particularly welcome if it takes the steam out of two wrong-headed energy proposals from Washington. Democrats have rallied around a plan to raid the Strategic Petroleum Reserve, while the Bush administration has proposed a special rule to spur exploitation of oil shale in the West, a petroleum source that requires large quantities of water and energy to develop and will not be commercially viable for years, if ever. The energy proposal before Congress that does deserve support is the extension of expiring tax credits for renewable energy and energy efficiency projects.
The plan to tap 10 percent of the petroleum reserve, sponsored by Representative Edward Markey of Massachusetts, failed to get the two-thirds majority it needed, but it is likely to come back. The Bush administration is right to oppose it, since the purpose of the reserve is to keep oil flowing in the event of a terrorist attack, war, or natural catastrophe, not to put a damper on the pump price of gasoline.
The Bush administration's own most recent attempt to fool the public into thinking it has an answer to the energy crunch is its proposal to offer sweetheart leases for developers of oil shale in the West. According to the Interior Department, the West has an estimated 800 billion barrels of oil in underground shale formations - three times the proven reserves of Saudi Arabia. But getting the oil out requires cooking the oil out of the rock and then pumping it to the surface.
Senator Ken Salazar of Colorado has called the lease proposal "a last-minute fire sale" and said the nation is "years away from knowing if the technologies for developing oil shale on a commercial scale are even viable." Much of the water for oil-shale development would have to come from the depleted Colorado River basin.
Getting oil from shale produces far more greenhouse gases than the extraction of conventional petroleum. Congress' 2005 energy bill funded studies on oil shale development, but until a way can be found to extract the oil without adding to global warming, worsening the West's water shortage, and blighting the landscape, any proposal to offer leases at bargain rates is woefully premature.
In the meantime, Congress could ensure new energy production without greenhouse gases by ending the uncertainty surrounding the tax credits for solar, wind, and other renewable sources.
Investors need a signal that the credits will not run out. Congress should give a green light to green energy.
