By Bernd Debusmann
By Bernd Debusmann
WASHINGTON, July 16 (Reuters) – If necessity really is the mother of invention, oil at $140 a barrel and gasoline at $4 a gallon will force the United States, the world's most profligate user of energy, into a new era of creativity and innovation. As long as America's leaders stop practising politics as usual.
"Our problem has been a monumental lack of leadership," said Chris Jarvis, president of Caprock Risk Management, a company that advises investors on energy. "There's a golden opportunity now to bring change. And oil at $140 focuses the minds." So does $4 a gallon of gas — in a way $3 a gallon never did.
As far as America's energy habits are concerned — the United States has four percent of the world's population and uses almost a quarter of its oil — change is under way. For one, the car culture is changing. Americans drive less and use more public transport (its use is at a 50-year high). Gas-guzzling SUV's are out, hybrids and fuel-efficient cars are in.
On a different level, more U.S. corporations are allowing employees to work from home or save them commuting costs by changing to a four-day work week. Real estate agents report that demand for housing in cities is rising as commutes from suburbia are becoming painfully expensive.
Transportation accounts for almost 70 percent of the 20.7 million barrels of oil the United States consumes every day and changes in driving habits are a side effect of high gasoline prices. Another unintended consequence: reduced emissions of carbon dioxide from vehicle exhausts, the largest contributors to global warming.
Americans are the world's biggest emitters of carbon, with around 20 tonnes per person per year. Overall, China, with a population of 1.3 billion, has overtaken the United States as the world's worst polluter. It accounts for 24 percent of global carbon dioxide emissions. The United States is second, with 22 percent.
The problem, as President George W. Bush has repeatedly put it, is that "America is addicted to oil, which is often imported from unstable parts of the world". That dependence has increased sharply over the past three decades: in 1973, the year of the Arab oil embargo against the United States and its Western allies, the United States imported just under a quarter of its oil. By 1991, at the start of the first U.S. war on Iraq, that had climbed to more than 40 percent. Now, it is close to 70 percent.
BUSH AND POLITICS AS USUAL
This is not an addiction that can be cured by lifting an executive order (first imposed by Bush's father in 1990) that banned drilling for oil off the Atlantic and Pacific coasts. When Bush ended the ban this week, he portrayed it as a major step towards energy independence. Politics as usual in its purest form.
"The motivation here is political," said Sarah Emerson, managing director of Energy Security Analysis Inc., an independent research firm. "It won't solve the problem."
Partisan opponents of Bush were more blunt. "The Bush plan is a hoax," said Nancy Pelosi, the (Democratic) speaker of the House. "It will neither reduce gas prices nor increase energy independence."
What would? First of all, an end to the partisan squabbling that has stood in the way of a project that would attract the best and the brightest and combine federally-set rules with free market ingenuity. "This is not about Republicans vs Democrats," says Texas oil billionaire T. Boone Pickens. "Our country faces what I believe is the most serious situation since World War Two."
Pickens is spending $58 million, a good part of it on newspaper and television ads, to convince Americans of the huge scale of the problem. Unless tackled urgently, he says, it would lead to the single largest transfer of wealth in human history — from the United States to oil producers.
"Our economic engine is now 70 percent dependent on the energy resources of other countries, their good judgment, and most importantly, their good will towards us." Pickens says. "Foreign oil is at the intersection of America's three most important issues: the economy, the environment and our national security. We need an energy plan that maps out how we are going to work out of this mess."
Pickens has such a plan and its centerpiece is wind power, some of it harnessed by his own wind farm, the world's biggest, a project he plans to spend $10 billion on. Electricity from the wind whistling through America's mid-section, the Great Plains, would replace the natural gas the United States burns to generate 22 percent of its power.
Then, the freed-up gas would be used to power vehicles. That would displace more than a third of oil imports.
Pickens' plan is not the only one addressing energy problems, but it is the most intensely advertised. Come election time in November, his 80-year-old face is likely to be as familiar to TV viewers as the faces of the presidential candidates.
The plan is not as straightforward as it sounds: the government would have to build new power transmission corridors from America's mid-section to the coasts. Fewer than 150,000 vehicles in the United States currently run on natural gas and filling stations dispensing it are few and far between.
(Bernd Debusmann is a Reuters columnist. The opinions expressed are his own)
