As the great energy debate continues on Capitol Hill, a credentialed Washington expert -- this one from Washington, Pa., with experience in energy, economic and environmental concerns -- believes the Bush Administration has it right and price caps on California power are a bad idea.
Dr. John Gregor is a professor and chair of economics and business, as well as Executive Director of the Center for Economic Development, at Washington & Jefferson College in Washington, Pa. He was contracted by Amoco in 1988 to review a report by the American Petroleum Institute on drilling on the North Slope of the Arctic National Wildlife Refuge, and previously did work for the Governor's Energy Council in Pennsylvania. He also worked for the Environmental Policy Center at Penn State University, which was one of the research arms for the Governor's Energy Council at that time.
Gregor believes President Bush's comprehensive energy plan "is movement in the right direction," despite being criticized by many -- most notably California Governor Gray Davis for not putting immediate price caps on his state's rising energy prices during its power shortage.
"You can't circumvent the markets and get the desired results. We've tried price controls on every other market and given them up because they simply don't work," says Gregor. "The only way to bring about true results is to let the prices rise high enough that people are uncomfortable with them and they increase their conservation. The key to resolving the energy crisis is to let the prices go up.
"What's going to happen if you cap prices is that you exacerbate the problem between supply and demand and you just make it harder to fix later. Price caps create a fundamental misalignment between what is bought and sold."
Gregor believes California could resolve its energy shortage on its own by banning the use of air conditioners, but he knows "they won't give that up." But the only way to bring about real relief is to use less and import more energy. While it appears as if the state is tapping resources to bring more power online, there would still be no decrease in demand economically with price caps.
That's why he likes the Bush plan because it calls for conservation and seeking additional sources of American energy. While he supports the plan, he does agree with some of the environmental concerns raised by the revival of some old sources of energy.
"The last nuclear power plant was built 10 years ago, so it's probably time for some new ones. The problem with nuclear power is still the disposal of the spent fuel rods (environmentally)," says Gregor. "The concept of 'clean coal' which has been discussed (in the Bush Plan) involves injecting oxygen into the fuel source. It supposedly burns cleaner, but coal is still a dirty fuel."
Gregor reports that the downside to fossil fuel alternatives is the cost -- even hydroelectricity. That's why the most controversial element of the Bush plan -- drilling in the Arctic National Wildlife Refuge -- may actually become a more attractive option under the right economic conditions.
"Once the price of oil becomes high enough (primarily from foreign imports), I believe we will drill there. If the price becomes high enough, then I believe we as a nation will find alternatives (to foreign oil)," he says.
His assessment back to Amoco in 1988 did conclude that the Arctic National Wildlife Refuge did offer a viable source of oil reserves over just a small area of the land.
Gregor can be reached by calling his office at (724) 223-6150, or his home at (724) 228-3415. His e-mail is [email protected]. If you have any problems reaching him, feel free to contact Tracey Kolodziej, news bureau manager at W&J, by calling (724) 223-6074, or e-mailing her at [email protected].
You may also call me at (814) 867-1963, or e-mail me at [email protected]. Dick Jones Communications assists Washington & Jefferson with its public affairs work.
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