Our capacity to avoid the obvious is astonishing. If Saddam Hussein does not make the case for a tax to cut oil consumption, who or what will? Yet, the conventional political wisdom is now that an energy tax is deader than ever, because people are already being hit by higher oil prices. The conventional wisdom betrays a deep public complacency about what is going on in the Persian Gulf.
We have greeted this crisis with a mixture of patriotism and self-indulgence. Roughly three-quarters of Americans (according to a Newsweek poll) support the sending of troops to Saudi Arabia, but no one from President Bush on down hints that this crisis should cause the public the least discomfort or inconvenience. The shrillest reactions from Congress involve denunciations of higher oil prices and calls to cut prices by releasing oil from the Strategic Petroleum Reserve.
Can we get serious?
We are not in the Persian Gulf to alter the price of a barrel of oil by a few dollars. We are there to prevent Saddam Hussein from gaining control over nearly a third of the world's oil reserves, which would lead later to much higher prices and constant blackmail. In effect: do what Saddam wants or face economic strangulation. Our actions at home will affect our chances of defeating Saddam. We need to curb our thirst for oil and demonstrate -- to other industrial countries as well as Iraq -- that the United States has the patience to maintain its commitment in the Gulf.
An energy tax would cut our oil use. The 1970s oil crises proved that higher prices work. They initially cause people to use less oil and, in time, promote permanent energy efficiencies. In 1989, the U.S. gross national product was 50 percent higher than in 1973 and employment was 38 percent higher. But total energy use had grown by only 9 percent since 1973, and oil use had actually dropped by 2 percent. Higher prices were the main pressure for greater energy efficiency.
One reason that U.S. oil consumption has risen in recent years is that world oil prices collapsed in 1986. Presto, American oil use jumped 10 percent between 1985 and 1989. All the ritualistic denunciations of higher oil prices in recent weeks overlook this. Adjusted for inflation, gasoline prices in 1989 were almost as low as in 1973 and lower than in the 1960s. We would have been wiser to have adopted an energy tax years ago to promote conservation and to insulate the U.S. market from the wild swings of world oil prices.
The suggestion that the White House start emptying the Strategic Petroleum Reserve is -- in present circumstances -- a lunatic idea. The reserve is intended for emergencies and now has almost 590 million barrels of oil. Sure, selling some of that oil might temporarily lower oil prices. But doing so would involve huge risks.
Suppose that the stalemate continues in the Persian Gulf for five months. Meanwhile, we're cheerfully depleting the strategic reserve by 150 million barrels (roughly 1 million barrels a day). Fighting then breaks out and temporarily destroys most of the Gulf's oil capacity outside Iran. Pumping stations are wrecked, pipelines ruptured and wells damaged. The loss would amount to nearly 10 million barrels a day in addition to the 4 million barrels a day already lost from Kuwait and Iraq. This equals about two-thirds of all oil imports for Europe, Japan and the United States.
Now the need for oil from the strategic reserve becomes critical. Otherwise, the industrial economies begin to grind to a halt. But we've just squandered a quarter of our reserve. The point is simple: the reserve exists to protect us against acute emergencies, not mild inconveniences. So far, today's higher oil prices are in the realm of inconvenience. Adjusted for inflation, prices remain well below the levels of the early 1980s.
How we handle oil at home is connected to the situation in the Gulf. Controlling our oil demand makes it easier to maintain unity among industrial nations. The more Europe and Japan feel they need Iraqi and Kuwaiti oil, the more they may reach for an expedient accommodation with Iraq. In 1989, the United States consumed about a quarter of the world's oil output. A tax and higher prices might cut our use by 200,000 to 500,000 barrels a day. Tapping the strategic reserve would be self-defeating. It would stimulate demand, and lower prices might deter other oil-producing countries from raising their output.
The case for an energy tax, of course, transcends the immediate crisis. It would help reduce the federal budget deficit and curb air pollution (including the emission of "greenhouse" gases that threaten to warm the earth's atmosphere). But even if this were not true, passing an energy tax now would send an important political message to both Iraq and other industrial countries. It would be a sign of political commitment. It would show that Americans are willing to accept sacrifice to support the larger U.S. goals in the Gulf.
This is a message we need to send. Everyone must now realize the immense difficulties we face in the Gulf. The sand is a hot, hostile area to maintain large numbers of troops far from home. Our political and military position may be undermined by Arab nationalism and, perhaps, by disagreement with our allies. We have not gone to Saudi Arabia because it is easy or because success is preordained. We're there because the alternative -- not being there -- is worse. If a stalemate develops, the struggle will quickly become a test of political stamina as much as military might.
It's always politically tempting to believe that incompatible goals can be pursued simultaneously. But the president is mistaken if he thinks he can separate what we do abroad from what happens at home. He needs to be candid with Americans about the stakes in the Gulf and the steps -- quite modest in their discomfort -- required of ordinary citizens. This is not an exercise. Many of our troops in Saudi Arabia could die. We owe it to them and to ourselves to do everything necessary to prevail.