Mr. Sarkozy, the anti-liberal oil
There are principles and feelings. On behalf of the former, Mr. Sarkozy defends pure and hard liberalism. In the name of the latter, he flouts him. Take oil. No sooner has the surge in world prices started to be painful than the minister felt sorry for himself: sometimes on fishermen, sometimes on farmers, sometimes on truckers. A tax refund here, a boost there. And by January, it is promised, a general discount, unless it is still targeted on the unfortunate owners of oil-heated mansions or the unfortunate owners of 4 × 4? We are awaiting the result with interest, knowing that in this area, generosity has only electoral limits.
We would be wrong to laugh at it. Because, by playing the firefighters on duty, Mr. Sarkozy forgets not only the theses he defends elsewhere, but also the lessons of the past. Above all, it seriously jeopardizes the future.
According to the liberal creed, the best signal, the only regulator on the market, is the price. When demand permanently exceeds supply, the price increases, which incites consumers to moderation and stimulates producers; ultimately, the market is automatically rebalanced.
This is exactly what happened after the oil shocks of the 1970s. If crude oil prices fell in 1986 and then stabilized for fifteen years around a moderate equilibrium price (around 25 dollars per barrel) , it is because the whole of the Western economies, shaken by the crises of 1973 and especially of 1979, had reduced their consumption, diversified their sources of energy and developed new oil fields in the North Sea, in Alaska, etc. . Supply far exceeded demand, leaving a comfortable cushion of unused capacity, particularly in Saudi Arabia, which used it to stabilize prices in the event of a problem.
This beautiful weather is over. If crude prices have more than doubled in the past two years and threaten growth, it is not only because Mr. Bush, by invading Iraq, deprived the market of a good million barrels a day. A few years ago, Saudi Arabia would have easily made up for the shortfall, and the accident would have caused only a brief backlash.
This is because demand over the past fifteen years has slowly increased, to the point of matching production capacities. There is no longer a reserve cushion, even in Saudi Arabia, the markets operate on a just-in-time basis and prices are at the mercy of the slightest hazard: conflict, strike, breakdown or cold spell.
Rising prices are therefore a "good signal", which comes in time to bring consumers to their senses. Because it will take several years and billions of investments to increase extraction capacities. Until then, even if the accidental peaks settle, oil has a good chance of remaining expensive, more expensive in any case than it has been for fifteen years. Unless global demand decreases sharply, as it did after the first shocks.
It will be more difficult. On the one hand, much has already been done, technical progress and standards helping, to free oneself from the oil constraint. France thanks to nuclear power, Germany thanks to coal, Switzerland thanks to heat pumps, etc., are much less dependent than they were thirty years ago. On the other hand, the strongest drift comes not from developed countries, but from the new Asian economies, and in particular from China, in full boom. Finally, globalization, dear to the liberals, has an unpleasant and hitherto poorly measured corollary: it massively inflates international trade, therefore transport (of products, people), and ultimately the consumption of fuels: fuel oil, diesel, kerosene, etc. This is where the shoe pinches.
If oil still covers 35% of world energy needs, it is because it is irreplaceable in transport, which alone absorbs roughly two thirds of production and continues to increase.
Soaring courses is perhaps a chance. She reminds us that hydrocarbons are not inexhaustible, that the world will have to learn to do without oil at a not-too-distant date, around the middle of the century, and that, by then, it will have to get used to expensive oil. From this perspective, the short-sighted clientelism of the government seems not only derisory, but also counterproductive.
Instead of letting prices discourage the most greedy users and reduce consumption in the long term, Mr. Sarkozy's fiscal gifts break the signal and maintain, or even encourage, waste. Even if it means redistributing part of the tax revenue from higher prices, it would be better, on the contrary, to encourage energy savings or the development of alternative solutions.
To help, for example, fishermen or farmers to invest in modern equipment and less voracious in fuel oil. Support public transport, piggyback transport, heat pumps or biofuels, etc. And in any case let the users of "oil chasers" like heavy trucks or 4 × 4 penalize themselves.
• ARTICLE PUBLISHED IN THE WORLD EDITION OF 23.10.04