Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.”
— President George W. Bush, State of the Union address, Jan. 31, 2006.
Hate to say it, Mr. President, but your words do more than restate the obvious. They demonstrate just how laughable our nation's energy policies have been for nearly 33 years.
We're coming up on the anniversary of the Yom Kippur War of 1973, when a simultaneous attack by Egypt, Syria and Jordan nearly destroyed Israel. Our country's steadfast support of Israel at that time triggered the now-infamous embargo of oil exports to the U.S. by none other than our current ally, Saudi Arabia. You'll recall video clips of long lines at the gas pumps and clamoring for relief from high fuel prices, at a time when we imported only 36% of our oil.
Guess what, Mr. President? Today we're importing close to 60% and there are no signs that we're even close to slowing down. Your goal of replacing 75% our oil imports from the Middle East is commendable … but targeting 2025 as the deadline for reaching it isn't going to cut it. We need to do something now.
When you confronted Iran about its nuclear program, they immediately threatened to reduce oil exports, driving the price per barrel up $5 in a week. Look at the fuel price spikes and shortages after Hurricane Katrina. While imports weren't cut, 5% of our refinery capacity was knocked out. When gasoline sailed to over $3.50/gal., panic buying set in. What happens if we lose 10% or 15% of our refinery network?
The problem is simple: 70% of the oil we import goes to feed our nation's transportation needs. And since 1973, we've managed to bring only enough alternative fuel sources to market to cut transportation's reliance on petroleum from 99.5% to 97%. Not a great track record. Don't forget that we haven't built a new refinery in this country for a quarter of a century, meaning the aging plants we use now must work at 95% to 105% capacity to meet our fuel needs.
So what do we do? First, we need to get available technologies in place now to immediately reduce petroleum usage. Detroit has already built 5-million flexible- fuel vehicles that can run on a blend of 85% ethanol and 15% gasoline. Drop it in the tank and go; can't get any easier than that. Yet only 500 filling stations provide ethanol nationwide. But give them tax credits and I think you'll see a big change quickly.
Here's an idea from ABI Research analyst Dan Benjamin: “Wind, solar and distributed cogeneration technologies are readily available. What would be more useful…are direct incentives to encourage the purchase of the product.”
Natural gas has been used as a vehicle fuel for decades. Cummins and its Canadian partner Westport Innovations build big diesel-style truck engines that can run on the stuff. Promote technology like this with tax credits. Trust me, fleets respond to incentives.
Biodiesel is another option, but it's still fraught with quality issues. Unlock a few hundred million dollars and fund some quality control improvements so we can have a rock solid 50% biodiesel/50% diesel blend ready for nationwide use in four years. Back it with a federal mandate and we'll be good to go.
How to pay for all of this? That's easy, too. Just ask Don Young (R-AK) to give up the $941 million that was earmarked for a useless bridge in Alaska as part of last year's highway bill. And maybe get a few others to donate their pork as well. There are lots of wasted funds going out the door these days you can put the tap on.