Global Policy Forum

Dumping Crude


By Patrick Doherty *
March 12, 2004

So it's Kerry v. Bush. If the candidates deliver an honest debate on our economy and security, we'll be talking about energy this year.

We already know the two perspectives. Team Bush denies the scientific consensus on global warming, calls for redundant research and subsidizes oil, coal and natural gas. Kerry calls for "a new Manhattan Project to make America independent of Middle East oil in 10 years by creating alternative fuels like ethanol and making cars more efficient." Among other things, his plan would create "half-a-million new jobs."

What seems to be a stark contrast, however, isn't. Kerry's objectives are a move in the right direction, but they do not go far enough or fast enough. The Middle East supplies only 17 percent of our total crude oil consumption or 28 percent of imports. That means America would still be dependent on the global oil market, which is increasingly reliant on Saudi Arabia and the Persian Gulf. As long as we get our oil on the global market, we will be chained to the dysfunctional politics of the Middle East.

Fortunately for Kerry, he won't need to study the problem for another decade. It turns out that three months before the Pentagon's Office of Net Assessment published its explosive report about the threat posed by climate change, it published another report entitled, "A Strategy: Moving America Away from Oil." The report, prepared by the Arlington Institute, outlines how to wean the United States off oil completely in 15 years. That's well beyond Kerry's 17 percent reduction over 10 years.

Oil, Oil, Oil

The report states plainly that our addiction to oil does more harm to American interests than good:

". . . The geopolitical issues associated with a major dependency on a raw material that is often found in politically unstable areas have come to a head, contributing in part to two Persian Gulf conflicts in the last dozen years."

The last senior government official to admit that Iraq was about oil was then-Secretary of State James Baker a dozen years ago. Cheney, Rice, Wolfowitz and Rumsfeld may forever change their rationale for invading Iraq, but here we have a matter-of-fact statement that America's dependency on oil played a role in our two wars in Iraq. As the excuses for Operation Iraqi Freedom—WMD, terror and democracy—all fall by the wayside, it is encouraging to know that some folks in the Pentagon who know it was about oil, think things need to change and are willing to act.

The report continues that same straightforward talk as it delivers an assessment of our energy security situation. The reality is that we are a nation made extremely (and unnecessarily) vulnerable by our dependence on oil. Oil provides virtually all the energy for our transportation system and we import nearly 60 percent of our supply. Our trading partners in the developed world and the growing economies of China, India and South Korea are all similarly dependent and insecure. It's this global dependence on oil that determines the threats we face: destabilized producing regions and supply routes, extreme price swings, vulnerable concentrations of infrastructure and energy scarcity among the 5/6ths of the world's population in the developing world. Add the quite plausible "wild cards" like abrupt climate change, and this net assessment is dismal.

Since this report was published last August, America has followed its trajectory for the worst-case scenario, called "turbulent world." The United States is mired in military protection of oil reserves around the world, our credibility is damaged, prices for gasoline and natural gas are high and upstream energy investment is off pace with projected demand. As it gets worse, the authors project, terrorist incidents will increase, investor and consumer confidence will drop, the government will shift from band-aid to band-aid and carbon emissions will rise, accelerating climate change.

Fifteen Years

The centerpiece of the report is a strategy for moving the United States from oil dependence to independence in 15 years. The authors provide the evidence to assert that a secure future will be all-electric, decentralized and efficient. The transition happens in three stages of five years each. Car engine technology moves from internal combustion to hybrids to fuel cells. On-board fuel moves from oil (gasoline, diesel) to bio-fuels (such as ethanol) to pure hydrogen. Transportation sector efficiency doubles from today's paltry 20 percent by shifting to ethanol hybrids and further increases with vehicles designed around hydrogen fuel cell power systems. After 15 years and less than $100 billion in investment, America will have kicked its oil habit.

This is not science fiction. The technology is available to start today. The challenge is transforming the market and the infrastructure, but attitudes are already changing. The plan notes the emerging alliance between the Motor City and the Midwest: "General Motors recently signed a two-year partnership agreement with the national Ethanol Vehicle Coalition." That's because this path to independence makes great economic sense. A survey by the consumer-opinion gurus at J.D. Powers shows that with hybrid SUVs entering the market this year, sales are expected to expand significantly. And by growing our own fuel, we keep hundreds of billions of dollars right here at home, producing jobs and transforming America.

A Coherent Plan

Our future hinges on the coming debate on the economy and security. The Bush team wants to frame the debate as about two separate issues: economic growth and terrorism.

Bush, with a track record of distorting science and manipulating intelligence, has chosen a debate that fits his ideology, but does not reflect reality. There's no source of growth on the horizon and with both candidates ignoring the $44 trillion fiscal imbalance, any growth we get will be crushed by a massive spike in interest rates. Terrorism, of course, is fueled by our dependence on oil.

Nevertheless, the media already think this election is about economic growth and terrorism. Unless the Democrats challenge this frame, Kerry will be forced to debate band-aids instead of solutions. If that happens, Bush's mantra that the Democrats don't have a plan will stick: there are no short-term fixes possible.

Democrats still have time to change the frame. To do so, Democrats must abandon the dysfunctional 1950s-era economic formula of sprawl, fossil fuels and distorting subsidies and offer the obvious alternative.

These Pentagon reports, the Institute for America's Future's Apollo Alliance, the International Panel on Climate Change and recent studies by PriceWaterhouseCoopers and the global re-insurance giant, SwissRe, all point to it: smart growth, renewable energy and global carbon trading. It means better jobs, more security and an increasingly prosperous, just and healthy society.

Sprawl or smart growth. Fossil fuels or renewables. Subsidies or carbon markets. These are the choices facing America. This is the debate America—and the world—desperately need.

Kerry has this new economic formula in his platform and in fact just raised the profile of his smart growth plank. And yet his mantra is education, healthcare and jobs. He can't have it both ways. We can either tweak the old economy or we usher in the new one.

These two Pentagon reports clearly state that the time for tweaking is over. The time for change has arrived. It's not time to "bring it on," John Kerry. It's time to raise the bar.

About the author: Patrick Doherty spent a decade in the field of international conflict resolution, working in the Middle East, Africa, Southeastern Europe and the Caucasus.

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