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Cheaper Gas, Calmer Debate


With prices down at the pump, it may be easier for Americans to hammer out a wise energy policy

More evidence that American voters have the attention span of a hummingbird: The sudden drop in crude oil prices already appears to be reducing the potency of energy policy as a Presidential campaign issue. However, a somewhat lower profile for oil might not be such a bad thing when it comes to progress on crafting a serious energy policy, given that a free-for-all political campaign is hardly the best venue for hammering out an intelligent compromise.

Public concern about energy costs crested in June and July when the price of crude oil hit a record close of $145 a barrel on the New York Mercantile Exchange. Fully a quarter of Americans cited fuel and oil prices as the biggest problem facing the U.S., 25% in a June Gallup Poll and 23% in July, up from just 3% in February.

But it didn't take long for lower prices to turn many Americans' attention elsewhere. By Aug. 7-10, when crude oil dipped below $120 a barrel, just 15% of Gallup's respondents cited fuel prices as Enemy No. 1. That percentage is likely to dip even more in Gallup's September poll, with crude going below $110. On Sept. 3 crude hit $108.85 on Nymex, off 25% from its peak. Oil has been dragged down by speculation that slower global economic growth will curb demand.

Environmentalists cheered when Americans began driving less in response to higher fuel prices. By early July, when prices peaked, U.S. gasoline consumption was down 2.5% from the average for the same three-week period over 2005-2007, according to data from the Energy Dept. But again, the fall in prices seems to have induced Americans to break some of their newly made vows to carpool, bike, and telecommute. Gasoline consumption is still depressed, but not as much. It was off just 1.3% for the three weeks through Aug. 21 compared with the 2005-07 average.

Energy "isn't a hair-on-fire issue" anymore, says Frank V. Maisano, a principal at the law firm of Bracewell & Giuliani. That's good, because the energy problem is too complex to be solved with sloganeering, argues Maisano, who represents oil refiners, electric utilities, and wind energy developers.

Of course, complete public neglect of energy issues wouldn't do anything for policy progress, either. But with oil still at historically high levels, there's not much chance of that.

Coy is BusinessWeek's Economics editor.

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