Energy Crisis — Or Just A Lot of Hot Air?

LOS ANGELES – The forecast called for a hot, dark summer from coast to coast — rolling blackouts in the West and Northeast, sweltering days and nights without air conditioning and $3 gas across much of the country.

But a funny thing happened on the way to the energy crisis: Electricity prices went up, gas prices went down and the panicking prognosticators are eating their words.

"We accepted their threats (that) there would be blackouts if we didn’t pay the highest prices possible," said consumer activist Doug Heller. "We paid a premium, and we’re now staring at 10 years of high electricity prices."

The recently energy-crippled California currently has so much electricity hitting the grid system that the state is selling some of it back on the open market — in certain cases, at pennies on the dollar.

The glut is reportedly the result of cooler temperatures and conservation.

"People are more aware," said Chris Thornberg, an economist at the University of Southern California Los Angeles (UCLA). "They’re turning off their TVs. They’re not letting their computers run all night."

He said industries are also helping by limiting their consumption of electric power to save energy.

On the flip side, the latest Lundberg study came out Tuesday, showing the gasoline situation is improving — not because demand is lower but because supply is much higher than it was in the spring.

That finding would likely hurt the controversial Bush administration proposal in favor of drilling for oil in Alaska’s Arctic National Wildlife Refuge (ANWR). The plan already faces strong resistance in Congress, and a plentiful cache of oil could kill it entirely.

For now, the country is re-energized. But the situation remains tenuous. The Lundberg study predicts that gas prices will level off and then rise again. And if California has a hot August, the blackouts may yet roll on.

Economists say the U.S. has to stabilize future energy sources to avoid a repeat performance of the darkness and heat the Golden State suffered through a few months ago.

"The lesson to be learned here is that unless we are comfortable with the boom-bust cycle, we still need some sort of capacity planning," Thornberg said.