Saturday, March 26, 2005

Max Boot on Importance of Oil Independence 

Max Boot, via Jewish World Review gets down to brass tacks about realistic scenarios for dealing with America's vulnerability to mideast oil suppliers:

Prices could soar past $100 a barrel, and the U.S. economy could go into a tailspin. As it is, high oil prices provide money for Saudi Arabia to subsidize hate-spewing madrasas and for Iran to develop nuclear weapons.

He specifically recommends transitioning to hybrids (as opposed to waiting for "magic bullet" cars).

He recommends doing the infrastructure work (and consumer re-education) needed to make those hybrids 120V wall-outlet-pluggable.

And he recommends upgrading the fuel distribution network (and the auto makers' designs) to accomadate alternate fuels as part of the fuel-mix. Once all the ethanol pumps and parking lot charging plugs are added, he projects automobiles that get 500 miles per gallon (of gasoline).

But most importantly, he recommends that the US approach this effort with an eye toward bringing the whole world along for the ride.

Sounds great. And I absolutely agree with him on the importance of fuel policy (coming in second in importance perhaps only to feeding tube policy). But as he acknowledges, there are some flies in the petroleum jelly. I agree with him that the politicians on both sides are aware of the problem, and one would have to presume that there is at least some awareness of, not to mention lobbying on behalf of, the solutions he identifies as being ready today.

So what gives? How can the politicos be so short-sighted and stupid again, with so much at stake? Or is it possible that there is more to this issue?

First off, simply increasing the fuel efficiency of vehicles doesn't necessarily solve enough of the problem. 500 miles per gallon of gas is great, reflecting about a 90-95% savings per vehicle. But the bottom line here isn't fuel efficiency, but gross fuel consumption. So while each vehicle may be go farther for each gallon of gas it guzzles, if we travel a greater number of vehicle-miles (more Indian and Chinese vehicles for example), part of our savings is burned right up.

In addition, we still need to generate and transmit the electricity that replaces the gas. To the extent that this supply is driven by diesel generators it is a compromised solution. More technological improvement in the electricity grid, more wind/solar/... is needed so that the gasoline is truly replaced, and not just shifted.

We also need to consider that fossil fuels are burned in lots of other ways besides getting from A to B. Consider some UK statistics on fossil fuel usage. Based on that (limited) data, at least in the UK, fossil fuel use for transportation is only, at most, 20% of total consumption.

Obviously, we can't sit around prepared to do nothing until we have every problem solved perfectly, but I hope these issues are on the table. But we do have to ask, in policy terms, is X billion dollars better spent on fuel efficiency? Or on other measures?

A second thought on the subject: how does a threatened industry respond to encroachment? I'm curious whether part of our policy reticence (sticking with the status quo) is based on an anticipated Saudi and Iranian reaction to clear steps aimed at rendering their oil swamps valueless.

Our goal must be to envision a solution, and then successfully get from here to there without wrecking the world economy in the process. In an age where suicidal mayhem is growing commonplace, it's not hard to imagine some nightmare scenarios of how the Saudis and Iranians could react in Year 2 or 3 of a 12 Year Plan.

What price per barrel would the Oilatollahs figure was needed to bring their erstwhile oil-junkies back for more? What threats to disruption of economic activity during the intervening years could be tolerated? What European beauracrat couldn't sympathize with the feelings of desparation conjured up in a Saudi Shiek or Iranian Mullah, strapping on that suitcase nuke as the only remaining response to a cruel, conserving America and its free market abominations.

I'm not sure there's any way around all that, but it might be worthwhile to build up your reserves and "insurance policies", maybe even counter-threat leverage (i.e. army in Iraq) before making public a clearly declared program of ending oil dependence.

Maybe its better if the politicos are just stupid and short-sighted. It's not worth it yet.
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