Thursday, August 18, 2005

Energy Policy - Where's the leadership?

Time for an energy-leadership rant...

I read a good article by Thomas Friedman (below) a couple of weeks ago. He makes the point I do when talking to friends: we need real leadership if we're going to not only be competitive in this new "free trade" world, but to be prepared for a time (in the not to distant future) when we're competing fiercely for limited oil resources with the likes of China and India.

The Chinese are putting 1000+ new cars on the road EVERY DAY... India is using more and more energy... (Their industries are already taking some of the brightest workers too.) The simply fact is that world oil production is simply not going to be able to keep up with demand over the next couple of decades. Given this fact, wouldn't a sound energy policy -- no, not just energy, economic policy -- foster and promote American innovation?

Oil simply isn't gonna be cheap and plentiful in 20-30 years or so... So why not challenge American industry to innovate and position itself to sell the energy technology of the future to not only Americans, but to China, India, Russia, etc. ?? They are all moving at high-gear into the 21st century. If we focus on the long term now, we can be ready to drive the techno-energy engine of the future world economy... We need, now more than every (cuz the clock is ticking down on oil reserves), serious research into alternative fuels. (I don't even have time to bring the environmental argument into it: but imagine whats gonna happen as 1 BILLION Chinese move from low impact -- riding bikes and living on farms -- to HIGH impact -- driving cars, living in cities and using 10-20 times the energy, per capita).

Instead this administration gives incentives to oil companies who are making record profits (Exxon/Mobil - $7 BILLION in 3 months) to do 'more of the same'... Shouldn't our tax dollars be helping to position American industry for the future? I think Exxon/Mobil can fund their own research into oil relasted exploration/processing.

We can't even get congress to press the auto industry to make more fuel efficient cars.. That would actually mandate that may make someone actually THINK/INNOVATE to make their money --- something large American companies do little of that (case in point, GM has to BUY it's hybrid tech from Toyota. Sound like the '80s again? A company 3000 miles away anticipates the American Market better than US Companies). Big companies are simply more inefficient than even government: at least the populace elects our officials every few years: CEOs elect themselves (they and their buddies own most of the stock). ... and we're busy incentivising them to 'stay the course'... foolishness doesn't even begin to explain this.

Let's focus government dollars where they do the most good: basic research and development that corporate America has little stomach for...

Remember, some of the greatest innovations of the last decade (of the last century!) were based in government funded research (e.g. - ARPANET -> the internet, MOSAIC -> Netscape, and next - hopefully - current research into quantum computing)... To use our tax dollars to 'stay the course' with regard to energy policy is like following the lemmings over the cliff: it may seem like progress, but the surprise is waiting just ahead.

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Too Much Pork and Too Little Sugar

By THOMAS L. FRIEDMAN

Wow, I am so relieved that Congress has finally agreed on an energy bill. Now that's out of the way, maybe Congress will focus on solving our energy problem.

Sorry to be so cynical, but an energy bill that doesn't enjoin our auto companies to sharply improve their mileage standards is just not serious. This bill is what the energy expert Gal Luft calls "the sum of all lobbies." While it contains some useful provisions, it also contains massive pork slabs dished out to the vested interests who need them least - like oil companies - and has no overarching strategy to deal with the new world.

And the world has changed in the past few years. First, the global economic playing field is being leveled, and millions of people who were out of the game - from China, India and the former Soviet empire - are now walking onto the field, each dreaming of a house, a car, a toaster and a microwave. As they move from low-energy to high-energy consumers, they are becoming steadily rising competitors with us for oil.

Second, we are in a war. It is a war against open societies mounted by Islamo-fascists, who are nurtured by mosques, charities and madrasas preaching an intolerant brand of Islam and financed by medieval regimes sustained by our oil purchases.

Yes, we are financing both sides in the war on terrorism: our soldiers and the fascist terrorists. George Bush's failure, on the morning after 9/11, to call on Americans to accept a gasoline tax to curb our oil imports was one of the greatest wasted opportunities in U.S. history.

Does the energy bill begin to remedy that? Hardly. It doesn't really touch the auto companies, which have used most of the technological advances of the last two decades to make our cars bigger and faster, rather than more fuel-efficient. Congress even rejected the idea of rating tires for fuel efficiency, which might have encouraged consumers to buy the most fuel-efficient treads.

The White House? It blocked an amendment that would have required the president to find ways to cut oil use by one million barrels a day by 2015 - on the grounds that it might have required imposing better fuel economy on our carmakers.

We need a strategic approach to energy. We need to redesign work so more people work at home instead of driving in; we need to reconfigure our cars and mass transit; we need a broader definition of what we think of as fuel. And we need a tax policy that both entices, and compels, U.S. firms to be innovative with green energy solutions. This is going to be a huge global industry - as China and India become high-impact consumers - and we should lead it.

Many technologies that could make a difference are already here - from hybrid engines to ethanol. All that is needed is a gasoline tax of $2 a gallon to get consumers and Detroit to change their behavior and adopt them. As Representative Edward Markey noted, auto fuel economy peaked at 26.5 miles per gallon in 1986, and "we've been going backward every since" - even though we have the technology to change that right now. "This is not rocket science," he rightly noted. "It's auto mechanics."

It's also imagination. "During the 1973 Arab oil embargo Brazil was importing almost 80 percent of its fuel supply," notes Mr. Luft, director of the Institute for the Analysis of Global Security. "Within three decades it cut its dependence by more than half. ... During that period the Brazilians invested massively in a sugar-based ethanol industry to the degree that about a third of the fuel they use in their vehicles is domestically grown. They also created a fleet that can accommodate this fuel." Half the new cars sold this year in Brazil will run on any combination of gasoline and ethanol. "Bringing hydrocarbons and carbohydrates to live happily together in the same fuel tank," he added, "has not only made Brazil close to energy independence, but has also insulated the Brazilian economy from the harming impact of the current spike in oil prices."

The new energy bill includes support for corn-based ethanol, but, bowing to the dictates of the U.S. corn and sugar lobbies (which oppose sugar imports), it ignores Brazilian-style sugar-based ethanol, even though it takes much less energy to make and produces more energy than corn-based ethanol. We are ready to import oil from Saudi Arabia but not sugar from Brazil.

The sum of all lobbies. ...

It seems as though only a big crisis will force our country to override all the cynical lobbies and change our energy usage. I thought 9/11 was that crisis. It sure was for me, but not, it seems, for this White House, Congress or many Americans. Do we really have to wait for something bigger in order to get smarter?