Breaking the Oil Habit

WHEN HE TOLD Congress last winter that United States is addicted to George W. Bush joined every president since Richard Nixon in calling for some measure of independence. But Bush's goals were more modest than his predecessors'. The centerpiece of his statement was a proposal to eliminate 75 percent of our Middle East imports by 2020. Since even today our imports from that region are less than a fifth of total--our three largest suppliers are Canada, Mexico, and Venezuela--that would require minor adjustments. However, Bush's modesty may be warranted. In 1973, when Richard Nixon first called for independence, United States imported about 25 percent of its annual needs; now it imports over 60 percent. Oil and gas imports now account for over $200 billion of current trade deficit. Nevertheless, it's questionable whether has ever really been a national goal; it isn't even clear what term is supposed to mean. Former CIA director James Woolsey, whose work with organizations like Energy Future Coalition places him among staunchest advocates of reducing our reliance on foreign oil, prefers to avoid term energy independence altogether. If phrase is meant to suggest that United States can somehow isolate its future from everyone else's, then of course Woolsey is right--it is a fatuous notion. It counters entire trend of globalization and suggests that vital parts of nation's economy can be segregated from rest of its trade patterns. But need not imply isolation. In fact, United States had almost complete control of its own destiny until 1960s even as its trade with rest of world was growing. America's excess capacity could be tapped when country chose to alleviate shortages elsewhere in world, and its enormous domestic market assured that periodic gluts were no menace either. The stubborn facts of geology and economics rule out possibility of United States' achieving based upon oil--or upon natural gas, since gas deposits are mainly found in same areas. But can other sources replace in key economic sectors just as oil, in past century, frequently replaced coal? The iron didn't end because world stopped using iron, but because iron lost its relative importance. If oil age can be brought to a similar conclusion, country's economic power might again achieve parity with its geopolitical power. Of course, reverse would also be true: If we don't find substitutes, a growing thirst for petroleum may sap our military, economic, and diplomatic strength. Energy-independence hawks claim that this is already happening. The vision of abundance is appealing, but scenarios for achieving that goal haven't captured popular imagination. Since few Americans want to contemplate opposite future--gasoline lines, brownouts, and reduced living standards--the politics of remain in a chronic a state of denial. The ceremonial exhortations found in State of Union speeches and election campaigns have lost their credibility as statements of policy. The past 35 years have made public skeptical that government will ever address problems successfully--or will work effectively with markets toward that end. When President Jimmy Carter said, in 1977, that was the moral equivalent of war, he had broad support for programs that both spurred an increase in fuel efficiency and jump-started research into alternative fuels. But he also confounded markets. Stuart Eizenstat, Carter's chief domestic policy advisor, later told an seminar that one of worst things I ever recommended to president was in midst of Iranian crisis suggesting that we maintain price controls on gasoline at pump. It was an absolute disaster. …

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