At Long Last, Twin Breakthroughs On Energy

Two big facts emerged recently in the national debate over energy, one pleasing to the Increase Supply people and the other equally satisfying to the Decrease Demand folks.

The two facts are these: Americans favor drilling for more domestic oil supply, and lowering demand really does bring prices down notably and quickly.

These two realities, taken together, could move the debate forward. And none too soon.

The first fact emerged as a clear political metric. Nearly 70 percent in one CNN poll favored increased drilling for oil, including offshore. Even when environmental concerns are factored into the question, a majority of Americans believe new rigs should rise so that oil and gas prices can fall and so we can all be less dependent on the oil-rich Middle East.

For nearly 40 years, the American public has been averse to new offshore drilling because accidents have led to appalling degradation of beaches and habitat. The unsightly nature of drilling and pumping rigs has been offensive. But these notions are comparatively romantic in the glare of prices that reached $145 a barrel for oil and more than $4 a gallon for gasoline.

Americans have absorbed a gradual increase in the price of these commodities for years. But the spike of 2008 has been too much, too fast, and it has literally changed the national mind. Watch the people at a John McCain rally rising from their seats as he shouts "Drill, drill, drill!!" It's become his best audience reaction line of the season and helped him to a virtual tie in the presidential race.

Democrats were slow to see the power of this issue. Leaders such as House Speaker Nancy Pelosi have grown up in coastal politics, where the phrase "offshore drilling" is as toxic as "terrorist coddling." Pelosi began her chamber's August recess early rather than give Republicans a vote on offshore drilling. The same issue has jeopardized the fall session in the Senate, too.

Barack Obama, steeped in months of Democratic primary politics, was slow to capture the broader public mood on this emergent issue. He criticized President Bush for lifting the (largely symbolic) executive order banning offshore drilling and for pressuring Congress to lift the legislative ban.

But Obama soon heard the alarm bells and reversed himself. Citing the necessity of compromise, Obama backed the proposal of a bipartisan group of 10 senators who saw fresh drilling as an acceptable trade-off for other, more farsighted energy-saving measures.

While environmental groups held the line and argued that offshore drilling was fool's gold that would take a decade to pay off, the more practical pols saw an opportunity. Why not allow some new drilling in exchange for a commitment to electric autos and research into renewable fuels? A few years of drilling, far offshore, would be a bearable cost if it helped the country kick its addiction to foreign oil.

By this week, even Pelosi was seeing the advantage in compromise. If the Republicans wanted drilling badly enough to make other concessions, then a deal might be done. And how could the House GOP object to that, after two dozen or more of their number stayed in town into the August recess, holding forth on the subject in a dimly lit House chamber with no C-SPAN?

The second transformative fact coming to light was from the world of market economics. Despite disruptions to the supply chain in the Caucasus, the global price of oil continued falling. The barrel that sold for $147 at the midsummer peak dropped by nearly one-fourth in a matter of days. The dollar also strengthened and made speculation in oil less attractive.

What brought the price down? Was it that plucky protest on the House floor (as at least one member was hubristic enough to suggest), or was it something else?

On Tuesday, the Energy Information Administration, a Bush administration agency, announced what the oil market already knew: Demand for oil in the U.S. had dropped by 800,000 barrels a day this year the steepest decline in demand since 1982. Weekly gasoline demand was down this summer by nearly 4 percent compared with last summer, and the Chinese, notorious for their energy appetite, had seen demand slacken by 7 percent.

Do we really wonder why? We (and the Chinese) are using less because it costs so much more. Gasoline for around $4 a gallon means virtually everyone finds ways to use less gas. Many of us have no choice but to drive to or for our jobs. But all of us have options in choosing a vehicle, a route, a driving style. And for the first time since the oil shocks of a generation ago, Americans are taking those options seriously.

The next trend in oil prices is uncertain. Some analysts see oil back down below $100 a barrel in short order. Others see the price rebounding in the fall and winter and perhaps hitting new heights.

But one thing is clear. The price of oil still responds to signals from consumers, just as consumers still respond to spikes in price. The current fashion of glorifying new supply over all other solutions is great for flag-waving at campaign rallies. It's also an unbeatable fundraising device, as candidates in both parties know. But by itself, it only prolongs the agony. Ultimately, no addiction gets cured by providing more of the addictive substance.

The most potent weapon we have, as a country and as a species, is our ability to redefine our needs relative to our resources. Showing that we can use less oil is the quickest, surest way to recover control of our destiny.

Taken together, the desire for more supply and the ability to slacken demand can please the electorate in the near term and address the problem in the long.