MODERN TIMES
Art Hobson
ahobson@uark.edu
NWA Times 7 June 2008
America's energy
non-policy
Because
President Bush has not established a realistic energy policy, one that takes
the environment and oil shortages into account, the US is in a mess. Energy prices are spiraling, big
profits are going to oil moguls, oil dependence threatens national security,
and fossil fuels threaten the environment.
The
Bush energy policy was launched at Vice President Cheney's infamous 2001 White
House meeting with a secretive energy task force now known to include officials
from Exxon Mobil, Conoco, Shell Oil, and BP America. The resulting National Energy Policy cited a
"need" by 2020 for 32 percent more energy, 1300 to 1900 new large
power plants (coal, natural gas, or nuclear), oil extraction in the Arctic
National Wildlife Refuge and other sensitive regions, and expanded gas and oil
imports. The document notes that
we already import over half of our oil and that this figure will increase.
Instead
of this oil-soaked business-as-usual prescription, we needed a policy that put
energy efficiency and renewable energy first, cut greenhouse gas emissions, cut
oil consumption, and ended oil imports.
We can expect such policies from the coming Democratic administration;
even if it turns out, alas, to be a Republican administration, the policies
must improve because they could not possibly be worse.
Any
serious energy policy must contend with two facts of nature: global warming threatens the planet,
and "easy" (cheap) oil is drying up.
Let's
begin with oil. Four dollar
gasoline has gotten most people's attention. But it's a big mistake to think that energy policy should
focus on getting that price down.
Without rigid price controls, supply and demand dictates that prices
will increase. This is because
we're reaching the bottom of the oil supply barrel. Easily-recovered oil from outside the Mideast is declining,
and even Mideastern producers are pumping at full capacity with little increase
in output. Most remaining oil is
difficult, therefore much more expensive, to recover and refine: oil from the Canadian tar sands, heavy
oil from Venezuela, and oil buried deeply below the ocean floor, for example. So oil production is flattening out and
becoming much more expensive.
But
demand continues increasing at over 1 percent per year, driven by
industrializing nations such as China and India. Most demand comes from America, where 5 percent of the world
population guzzles 25 percent of its oil.
With rising demand and level supply, the per-barrel price of oil will
only increase in the long run.
The
sure way for America to influence oil prices is to decrease its own
consumption. The proven way to do
that is, ironically, by intentionally increasing our own gasoline prices. But there's a smart way to do this, a
way that will save us money in the long run. Here's how.
Suppose
that we purposely drove gasoline prices up to $5 per gallon by imposing an
additional $1 of federal gasoline tax.
History (from the 1970s OPEC oil embargo) tells us that this would force
us to reduce our driving and increase our cars' gasoline efficiency, which
would cut world consumption sufficiently to keep prices at or below $5 for a
long time. The $1 tax would bring
$200 billion per year into the U.S. treasury, money that could be used to build
mass transit, subsidize transportation for needy people and, most importantly,
put the bulk of the proceeds back in everybody's pockets in the form of reduced
income taxes. The Europeans have
for years pursued such "tax switching" to tax bad things (gasoline
use) instead of good things (people's hard work).
More
generally, global warming and declining resources dictate a quick and massive
switch away from all fossil fuels.
We need big cuts within 20 years, and an 80 percent reduction by
2050. There are innumerable
measures that can help accomplish this.
Here are a few of those that are likely to be suggested later this year
by the Arkansas Governor's Commission on Global Warming, of which I'm happy to
be a member. I'll just list them,
without explanation:
¥
"Demand-side management" led by electric and gas utilities, to
improve the efficiency of energy use in homes and businesses, putting utilities
into the efficiency business.
¥ Incentives for
energy efficient new buildings.
¥ Promotion of
agricultural and forestry practices that reduce greenhouse gas emissions.
¥ Advanced
recovery and recycling programs.
¥ Encouragement
of locally grown and produced food and forestry products, and farmer's
markets.
¥ A moratorium
on new coal plants until carbon capture and storage is installed and used.
¥ Renewable
portfolio standards or feed-in tariffs to expand renewable energy sources such
as photovoltaics, concentrating solar, and wind.
¥ Exploration
of the potential for either a regional cap-and-trade system or a regional
carbon tax in order to establish a cost for greenhouse gas emissions.
¥ Incentives
for such car-reduction policies as downtown revitalization, brownfield
redevelopment, infill development, transit-oriented development, sprawl
reduction, and bicycle and pedestrian infrastructure.
¥ Limitations
on using cars on college campuses and for driving students to public
schools.
¥ Switching
freight from trucks to trains.
¥ Improved and
expanded mass transit.
¥ Public and
school education to support sensible energy policies.
¥ Development
of local government climate action plans.
¥ Statewide
greenhouse gas reduction goals for 2015, 2020, 2030, and 2050.
You
can learn more about these measures, and more about the Commission's work, at
arclimatechange.us/.
Adoption
of such rational energy policies would go a long way toward solving global
warming, relieving our energy resource depletion problems, improving our
economy, and improving the quality of our lives.