President Bush is missing his Nixon-Goes-to-China moment.
In 1972, President Nixon was able to go to Beijing and negotiate with the Communists because he was an ardent anti-Communist. Bush, the Texas oil man, has an opportunity to ignite fundamental change in Washington's ruinous energy policies. But he's never done it.
The simple truth is that, despite the energy policy plan put forward by Dick Cheney's task force in 2001 and the pending energy bill in Congress, the U.S. doesn't have a viable long-term energy policy. It never has.
The new energy bill offers more of the same misguided policies that have driven the U.S. for the last 40 years. The measure, likely to be voted on by the House of Representatives shortly, provides $16 billion in new incentives to increase oil drilling and build new nuclear power plants. It's the same thinking that was in place in 1973, when the first oil shocks rocked the U.S. economy. The U.S. still has energy myopia -- a belief that we can produce ever-increasing amounts of energy to fill our gas tanks.
It can't be done.
About 50 years ago, M. King Hubbert, a geophysicist who worked for Shell Oil in Houston, used mathematical models to predict that American oil production would peak in the early 1970s. That's exactly what happened.
In 2001, Princeton University geology professor Kenneth Deffeyes used Hubbert's work to predict that world oil production will peak in the early part of this decade. After that peak, writes Deffeyes, "the world's production of crude oil will fall, never to rise again."
In his book, "Hubbert's Peak," Deffeyes predicted the peak would occur in 2003. After that, he writes, "no initiative put in place starting today can have a substantial effect on the peak production year." No new energy sources, he warns, "can be brought on at a sufficient rate to avoid a bidding war for the remaining oil."
There's evidence afoot that gives credence to Deffeyes' prediction. It came quietly in the third-quarter results turned in by the major oil companies.
In late October, Exxon Mobil, the world's biggest oil company, announced that its profit increased by 38%. But its energy production fell 1%. Production fell even though Exxon Mobil is spending 16% more on exploration efforts -- nearly $8.7 billion -- than it did last year.
ChevronTexaco told a similar story. It too had a huge profit. But its total oil and gas output fell 2.7%. Meanwhile, British oil giant BP reported that its energy production was flat for the first three quarters of 2003.
Given today's strong commodity prices, these companies desperately want to produce more energy. They are not able to. That's probably because they are reaching the limits predicted by Hubbert and Deffeyes.
Of course, scientists, pundits and oil men have been predicting that the world will run out of oil ever since the gusher blew at Spindletop in Texas in 1901. But there is simply no denying that the number of major new discoveries are dwindling and supplies are tightening. The globe has a finite supply of oil.
Whether production peaks this year or next year or in 2015 doesn't really matter. What matters is how well we prepare for it.
Bush has the political capital that could allow him to deliver a clear message to the world's biggest oil companies and to the American people: We need to change course on our energy policy. We must become more energy-efficient and energy-intelligent. We must increase the use of natural gas (particularly imported gas) and speed the development of fuel cells, solar cells and other energy technologies. Doing so would allow us to reduce our reliance on imported oil, particularly oil from the Persian Gulf, while making our economy more resilient.
Bush's sales pitch would be easy. He could say that we will of course continue to rely heavily on oil and natural gas for decades to come. But we must look to the next generation. We need a technology revolution -- a sustained, focused effort to equal the one that began in the early 1960s and culminated with Neil Armstrong's stroll around the Sea of Tranquillity. We must begin this effort today.
Nixon didn't go to China until his fourth year in office. President Bush, there's still time.