Understanding Energy Issues
John McCain, talking up Sarah Palin, became the latest of many to tout energy policy as her area of expertise: “She understands the energy issues better than anybody I know in Washington, D.C.”
This isn’t what you’d call a groundless claim. She’s the governor of Alaska. Alaska has a lot of oil and gas drilling. The state basically depends for its revenue on energy resource extraction and that’s the mainstay of the Alaska economy. So she no doubt knows all about various aspects of the energy sector that a governor of Oregon or Indiana would never worry about. But this all depends on a very curious understanding of what “the energy issue” is. For most of the world, the current situation of high and rising energy prices is problematic — a big drag on the economy. But it’s not bad everywhere. It’s a cliché at this point to observe that the leaders of states like Iran, Russia, and Venezuela are sitting pretty at the moment. But this principle doesn’t exclusively apply to “bad guy” dictatorships. Business is booming in the pro-American Gulf monarchies. And also in Alaska! What for most of the world is the “problem” of sky-high energy prices is the solution for places like Alaska and Russia that don’t have real economies but are seeing prosperity anyway thanks to skyrocketing oil and gas prices.
Looked at in that light, it’s not at all clear why you’d regard an Alaska politician as expert in “the” energy crisis. Alaska politicians never worry that energy may be getting too expensive and think about how to respond. They worry that energy might get too cheap! Alaska politicians don’t develop expertise in energy conservation measures or alternative fuels, they develop expertise in fighting with out-of-state executives about how to divide the profits that come from expensive energy. That’s the energy problem people think about in Alaska, Oklahoma, and parts of Texas and Louisiana but it’s not the energy problem people worry about in Michigan or Ohio or Virginia or Florida or New Mexico or Colorado or most anywhere else in the country.
36 Responses to “Understanding Energy Issues”
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September 4th, 2008 at 11:15 am
Sarah Palin as Vice President is an insult to the intelligent of the American people. That person is in no way qualified to be President and we are witnessing the fall of the Republican party as we know it.
I mean, just stop and think about for a minute the fact that during the most important speech of her life, and given the current issues now facing our nation, she felt the need to spend time cracking jokes, laughing, and insulting those that organize in their communities.
Last night’s speech was…….underwhelming.
And at this point I truly feel sorry for Mayor Guliani, what a pathetic person he has become. His speech last night was the stuff of unintentional comedy.
September 4th, 2008 at 11:17 am
I was thinking the same as I read the NYT article on AK politics this AM. The Dems could do worse than demonizing the Arctic Nigeria…they have their budget surpluses and low taxes and “freedom” because they’ve been sucking our milkshake for the last 30 years. Obama ought to lift Palin’s attack on the oil companies word-for-word. Let’s tax the oil companies in Washington not Juneau. Who do the AKers think they are? An independent country of their own?
September 4th, 2008 at 11:19 am
The Venezuela scenario made no sense to me for another reason.
Most of Venezuela’s oil is heavy crude. The only place that can refine that oil and do so in a profitable manner for Venezuela are the refineries on the American Gulf Coast. If they cut off oil shipments to America they’d be cutting their own throats.
September 4th, 2008 at 11:21 am
If understands the energy issues better than anybody equates to cleaning up oil spills, then I would agree with McCain. Plus her husband drives snow mobiles and those use gas.
Plus POW!
September 4th, 2008 at 11:21 am
A minor point, but high oil prices have also been a boon for New Mexico. There’s a pretty significant amount of O&G activity in the state, particularly in southeastern New Mexico. The revenue surplus generated by high oil and gas prices led Richardson and the Legislature to authorize direct payments in the form of tax rebates to New Mexico citizens.
http://www.forbes.com/feeds/ap/2008/08/20/ap5341731.html
September 4th, 2008 at 11:22 am
Alaska is a classic ‘rentier’ state – it asks little or nothing of its people because it depends on oil wealth to bribe its citizens into sonombulance. Had democracy not already existed in the state, autocratic tendencies would be everywhere – mimicking Middle East where freedom is exchanged for a steady diet of petro-welfare. Perhaps the affiliation with the AIP is a way of making sure that only Alaskans get petro-welfare – linked to a benign Palinocracy where conservative certainties take the place of critical thinking and sympathy for others…
September 4th, 2008 at 11:22 am
C’mon Matt, quit pouring saltpeter on the orgy, will ya?
September 4th, 2008 at 11:22 am
Can anyone tell me why Alaska gets massive subsidies from the federal government but when oil revenues are up they mail out checks to their citizens? The whole state is on the dole, as evidenced by Mr. GILF five jobs,(does he actually make a living at any of them?) She is a typical modern Rebuplican against “big government” while raking in her earmarks.
September 4th, 2008 at 11:24 am
It’s not fair to say Alaska doesn’t have a real economy. It may not be as diverse as the economy of a state like California or Illinois, but they do have a commercial fishing and packaging industry, a logging and mining industry and a pretty robust tourist industry. Sarah Palin is still not qualified to be VP or President but comments like yours just add grist to the GOP mill’s description of how “liberal elites” view the “real America”.
September 4th, 2008 at 11:24 am
Did Palin promote a policy of requiring Alaskan oil to be used in the U.S. and not exported?
I didn’t think so.
September 4th, 2008 at 11:28 am
One of the problems with promoting Palin as someone “who’s from middle America” is the fact that Alaska is nothing like middle America.
I knew, in the abstract, the Alaska was big on sucking from the federal teat and was more-or-less a resource-extraction economy, but the more I hear about how this influences their political environment and culture, the more I think that Alaskan statehood was a big mistake.
September 4th, 2008 at 11:40 am
When did we nationalize the oil companies? if Exxon drills in AK, are they required by law or mandate or dominion to sell the oil only in the US or can they sell their product on the global market? so are they advocating nationalizing the oil companies?
September 4th, 2008 at 11:54 am
Palin signed a state gas tax holiday bill that lifts state gas taxes until August 2009, so she agrees with John McCain on pointless panders that only help the oil companies.
September 4th, 2008 at 12:06 pm
The more I learn about Alaska, the more they piss me off. Welfare checks to Alaskans for AMERICA’s oil. Largest per capita (pork barrel)largesse in AMERICA. I guess that’s COUNTRY FIRST.
September 4th, 2008 at 12:08 pm
Why does Alaska get rich off it’s oil but Louisianna doesn’t?
Sounds like Saudi Arabia. The oil wealth means they have no reason to help the citizens prosper. They don’t need the tax base for revenue.
September 4th, 2008 at 12:09 pm
Makes me ask the question we’re all thinking, how did The Simpsons know Alaska would be in play this year when they chose to mock the government handouts there last year in the movie?
September 4th, 2008 at 12:32 pm
comments like yours just add grist to the GOP mill’s description of how “liberal elites” view the “real America”.
Yeah! And did you know that all those hardworking fishermen and river guides and loggers and miners refuse to cash the checks the state sends them? It’s true! They’re such rugged purists they won’t stoop to accept handouts from the welfare state! Yeah!
September 4th, 2008 at 12:52 pm
Do we have any recent experience from which we might evaluate how a former governor from an oil-economy state might handle energy policy as president? How about steeped-in-oil VPs? A pair of names is on the tip of my tongue.
September 4th, 2008 at 1:33 pm
Another corollary: Alberta.
Sounds like Saudi Arabia.
There are interesting ecnomic parallels, because you do get a lot of migrant workers who go up there for six months of canning, which pays big money but means you smell of fish for the next six months.
Like I said elsethread, it’s easy to preach libertarianism when you’re in a big empty state that sucks from the federal teat. Don Young and Ted Stevens and Frank Murkowski didn’t come out of a vacuum.
September 4th, 2008 at 1:48 pm
Jesus Matt you really have no idea what you are talking about. Many villages in Alaska are literally dying because of the high cost of fuel — $10 a gallon in some places. Because of high fuel costs the town of Fairbanks is full of anxious people who don’t know how they’re going to make it through the winter. Tackling high energy costs has been the primary focus of the Alaska legislature. And Palin’s solution was to give every person $1200, plus focusing on long term sustainable energy resources like wind, geothermal, and hydro.
September 4th, 2008 at 2:25 pm
“And Palin’s solution was to give every person $1200, plus focusing on long term sustainable energy resources like wind, geothermal, and hydro.”
Really was this before or after she vetoed the bill for windmills?
September 4th, 2008 at 2:59 pm
it was after…http://www.adn.com/legislature/story/415749.html
…Palin’s $268 million in vetoes hit dozens of projects across the state. She reduced funding for things like artificial turf at Service and Palmer high schools, expansion of Covenant House for homeless and runaway youths in Anchorage and support of the group Arctic Power’s lobbying in Washington, D.C., to open the Arctic National Wildlife Refuge to oil development.
Palin eliminated other projects entirely. That includes study of a second bridge between Juneau and Douglas Island, a Cook Inlet Housing Authority community center for seniors, Ketchikan Little League batting cages and big utility projects through the Railbelt Energy Funds.
Hundreds of other projects remain in the budget, including $25 million for the Fire Island Wind Farm that she vetoed last year. Palin also left in $15 million each for a UAA sports arena and port of Anchorage expansion.
September 4th, 2008 at 4:49 pm
In the coming world of resource scarcity and state conflict wouldn’t it be more prudent not to drill baby drill and save our oil so our military is the last to have access to it?
September 4th, 2008 at 6:07 pm
One of the problems with promoting Palin as someone “who’s from middle America” is the fact that Alaska is nothing like middle America.
As usual, Tyro gets it exactly right.
I think the notion of “inexperience” has been too heavily focused on foreign policy. The fact is, Sarah Palin has no experience in *national* policy. Granted it’s not really her fault (until she accepted McCain’s tag along offer), but Alaska’s parochial issues are nothing like those of most of America. So, the question should be what experience or opinion does she have on national issues like:
urban infrastructure
energy infrastructure
crime
poverty
net neutrality
health care
…to name a few.
September 4th, 2008 at 6:19 pm
I would also point out that running Alaska is not like running any other state – as far as governorship goes, it’s as easy as it gets. You have a state brimming in oil revenues, to the point where not only is there *no* state income or sales tax, but each resident gets an annual windfall cheque. On *top* of that, the federal government kicks back $1.87 for every federal tax dollar remitted. Add to that the absence of most of the troubles that plague the rest of the US (eg. urban decay, inner-city poverty, racial tensions, etc).
September 4th, 2008 at 7:17 pm
“Alaska is a classic ‘rentier’ state – it asks little or nothing of its people because it depends on oil wealth to bribe its citizens into sonombulance.”
Umm, doesn’t the classic rentier state have the guys at the top hoarding all the money? I’m thinking Saudi Arabia, Nigeria, to some extent Mexico.
In contrast, Alaska seems to be equitably spreading its oil wealth among its citizens. Too bad, West Virginia didn’t protect its coal wealth in the same way.
September 4th, 2008 at 9:35 pm
Alaska politicians never worry that energy may be getting too expensive and think about how to respond.
I commented on this on Ezra Klein’s blog, and jk already addressed it here. The Alaska legislature just finished a special session on the rising price of energy. The solution was to give every Alaskan $1200, which is affordable thanks to a state treasury flush with oil revenue. The main questions during the debate were: why should urban Alaska get the same subsidy as rural Alaska, which is where the real pain is? And why should the payout go to every Alaskan, even those who don’t need it?
Your overall analysis of Alaska’s oddball perspective on energy is correct, but the above statment is wholly false.
September 4th, 2008 at 9:37 pm
nukev: “Welfare checks to Alaskans for AMERICA’s oil.”
The oil comes from under state land. Why does the federal government have any claim on it? Alaska isn’t a colony, it’s a state like the other 49.
September 4th, 2008 at 9:37 pm
They don’t care about much more than the price of ass.
(You mean gas Linus.)
I’m Dirty Bird for this post.
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