Six lessons from the BP oil spill

Another reason for the timidity on reducing consumption is that the easiest fix, a tax on oil, is the riskiest politically. "A price signal on oil – that could be your climate change policy, that could be your energy policy," says Matthew Kotchen, professor of environmental economics and policy at Yale University in New Haven, Conn. "But it's difficult because it's not politically expedient."

A tax would encourage conservation and efficiency, reduce emissions, and spur the search for alternatives. The extra revenue from the tax could be used to fund that research, reduce the deficit, or be rebated back to consumers in the form of, say, a lower income tax. But passing a new tax, never easy, is especially difficult when the economy is so fragile. "Democrats clearly view that as suicide," says Matthew Kahn, economics professor at the University of California at Los Angeles.

That is why the Obama administration is pushing a cap-and-trade system to deal with global warming, under which industry would pay for car-bon emissions and, presumably, pass on the costs to consumers. Ironically, the oil spill complicates passage of a cap-and-trade bill because, as a way to gain Republican support for it, President Obama backed an expansion of offshore drilling. Now, the spill has forced Mr. Obama to issue a moratorium on new deep-sea drilling (a moratorium challenged by a federal judge). "The Obama administration is in a difficult position," says Professor Kotchen.

Thus, America's energy future may be driven more by technology and economics than political compromise. A breakthrough in car batteries or ethanol production from sources other than food crops could push the energy mix toward renewables. A sustained rise in oil prices, as exploration becomes more expensive, could accelerate a shift to natural gas and nuclear power.

With ample supplies of natural gas and coal, a growing nuclear industry, and research on everything from biomass to fuel cells, the US has a mix of ways to fuel its energy future. "For all that people say we're in an energy crisis, I look at it and say: The US is pretty well hedged," says Mr. Bryce. "For all the hand-wringing, we've got a very strong hand."

Contributing to this report were staff writers Mark Clayton, Pete Spotts, and Gregory M. Lamb, and contributor Carmen K. Sisson.

Related:

• Gulf oil spill: The story so far
• BP oil spill: Relief well is ahead of schedule, close to target
• BP oil spill: an unexpected laboratory for deep-sea disaster
• BP oil spill: A subdued Fourth of July on Louisiana's Grand Isle

IN PICTURES: Sticky mess: The Gulf oil spill's impact on nature

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