Why the energy bill will only fuel our unsustainable status quo

by Merrill Goozner

The energy bill moving inevitably through Congress is like a massive oil spill heading for a pristine coastline -- there's not much one can do except contemplate the eventual cleanup costs.
If September 11 changed everything in politics, you'd be hard pressed to tell from this special-interest giveaway. Two years after the attacks, the Republicans are about to pass legislation that does nothing to wean the United States from foreign oil, next to nothing to build a more fuel-efficient economy and precious little to promote alternative sources of energy -- policies that polls show most Americans would gladly support as the domestic component of the war on terrorism.

As it stands now, though, the conference committee, headed by Sen. Pete Domenici (R-N.M.) and Rep. Billy Tauzin of (R-La.), is cooking up much the same legislation as Vice President Dick Cheney did in his pre-9-11 secret rendezvous with energy lobbyists. They may remove the unpopular drilling in the Alaskan wilderness from the bill (though in recent days Alaska's Republican delegation has threatened to vote "no" unless it remains in).
But the core of the legislation -- $ 18 bn in tax breaks to the oil, gas, coal and nuclear industries -- remains unchanged. The operating assumption, to the extent there is anything more than corporate greed behind the bill, is that the United States can drill, dig and pollute its way to energy independence.

The idea that the bill will promote energy independence is the big lie. As long as the United States continues to depend on oil for its transportation needs (two-thirds of our oil goes into internal-combustion engines), we will remain dependent on foreign oil. America imported 36 % of its oil in 1973 (this week marks the 30th anniversary of the first Arab oil embargo). This year, oil imports hover around 60 % of supply. No matter how many tax breaks you lavish on the domestic oil industry, there's simply not enough recoverable crude left in the ground to meet America's SUV-driven appetites.
The other option, of course, is to lessen our need for oil by promoting energy efficiency and switching to other fuels. But alternatives can never gain traction in the marketplace because the price of oil -- despite the two embargoes and the ongoing machinations of the producer cartel -- remains cheap. OPEC occasionally slashes production to force a temporary upward blip in the per-barrel tariff. But over the long term, OPEC's efforts have come to naught. Oil prices today are, in real terms, more than 40 % below what they were in the early 1980s.

It's not hard to understand why. First, in the years since the oil embargoes, a number of non-OPEC countries have become major producers. They've given the global economy a temporary reprieve from the eventual day when the demand curve for oil finally exceeds supply. That day will come, as geologist Kenneth Deffeyes persuasively argues in his recent book, “Hubbert's Peak: The Impending World Oil Shortage”. But, thanks to oil-production newcomers such as Russia and Norway, it isn't here yet.
Second, the key producers in a world awash in oil are our dear friends, the Saudi Arabians. The authoritarian kingdom may have spawned 15 of the 19 hijackers, and members of its ruling elite may be suspected of providing financial support for global terrorism. But the Saudis sit on fully one-quarter of the world's proven oil reserves, and that means serious discussion about our dealings with this chronic human-rights violator remains a verboten subject in the nation's capital.

Saudi Arabia repays us in kind. Every time price spikes threaten to disrupt the economies of the industrialized world, the Saudis open the spigots. Indeed, in a post-9-11 world, the biggest threat to the global economy may not be a stock-market crash in New York or Tokyo but a hijacked airliner crashing into the 7 mm-bpd oil-processing facility at Abqaiq, the frightening scenario laid out in ex-CIA agent Robert Baer's new book, “Sleeping with the Devil: How Washington Sold Our Soul for Saudi Crude”.
Moreover, the world's dependency on the Saudis and other Middle Eastern producers will only increase in the coming decade. Former CIA Director James Woolsey told a Capitol Hill forum that "most of the world's oil fields are peaking around now except for those in the Persian Gulf. We're moving to a world where everyone will be more dependent on Middle East oil."

Woolsey also reminded the sparse crowd of Hill staffers and alternative-energy boosters (the forum, called by the Sustainable Energy Coalition to commemorate the 30th anniversary of the first OPEC oil embargo, drew zero media attention) of the elephant in the room: global warming.
"Our energy networks are entering an age of crisis," he said. "We in the US are not trying to sink Bangladesh beneath the waves with our SUVs, but we may be doing that."
Of course, when the White House rewrites scientific reports to hide the problem and the press shrouds the issue in contrived uncertainty, how can we expect the American people to politically express their will so they can live their lives in a way that will not harm all of humankind?

There is a path away from this economic, environmental and national-security dead end. And it does not require Americans to sacrifice economic growth or even their SUVs. It can be rapidly implemented with technologies that exist today.
A comprehensive program, laid out by former US Sen. Timothy E. Wirth (D-Colo.), Republican warhorse C. Boyden Gray and former Clinton Chief of Staff John Podesta in the July-August issue of Foreign Affairs, would include a number of reasonable steps:
-- widespread use of hybrid engines as a bridge to fuel-cell vehicles, which are still decades away;
-- biomass-derived ethanol (as opposed to corn-derived ethanol, which uses more energy than it produces);
-- clean coal with carbon sequestration; energy-efficient construction; and
-- greater use of renewable energy sources, such as wind, geothermal and solar power.

It sounds like a geek's fantasy. But these sources already account for 20 % of the global energy supply. More importantly, they are growing at 30 % a year. When it comes to efficiency and renewables, it is the United States, the globe's energy glutton, that is falling behind.
And that, ultimately, may be the real threat posed by the energy rip-off now being enacted in Washington. The Europeans are the technological leaders in wind power. The Japanese have seized the lead in photovoltaics. The Brazilians have mandated that new vehicles burn up to 85 % ethanol.

Chris Flavin, president of the Worldwatch Institute, put it succinctly at the forum on Capitol Hill: "The danger we face today," he said, "is that if we don't develop a strong domestic market in these technologies, we will not have the companies and we will not have the jobs that will flow from the revolution taking place around the globe."
What we're getting instead from the Bush administration is more tax subsidies for the oil drillers and the promise of endless military adventures to protect our access to the dwindling supply of an environmentally destructive commodity.

Merrill Goozner is a Prospect contributing editor.