Germany is now considering incentives to its world-famous domestic auto industry to manufacture flex-fuel plug-in hybrid automobiles that can get over 500 miles per gallon of (strategic) gasoline (boosted by domestically produced rooftop solar) with existing technology.
Meanwhile, Denmark has invested billions into having more than half of its entire auto fleet using only electricity by 2030.
And China is no slouch when it comes to renewable energy. Although the Chinese continue to bring another dirty coal-fired power plant on line about once a week, they surpassed every other nation in the world in 2010 in direct investment in the production of solar and wind power. As the Los Angeles Times reported in March 2010:
U.S. clean energy investments hit $18.6 billion last year, a report from the Pew Charitable Trusts said, a little more than half the Chinese total of $34.6 billion. Five years ago, China’s investments in clean energy totaled just $2.5 billion. The United States also slipped behind 10 other countries, including Canada and Mexico, in clean energy investments as a share of the national economy…
[T]he Pew report pointed to another factor constraining U.S. competitiveness: a lack of national mandates for renewable energy production or a surcharge on greenhouse gas emissions that would make fossil fuels more expensive.196
The ultimate “power to the people” is for homes to have their own solar roofs, no longer needing power lines from distant power plants owned by big transnational corporations.
A few countries are pushing this solar tipping point, like China and Germany. Jimmy Carter started us in this direction a generation ago, but Reagan and the Bushes paused it, and we’ve never recovered. Ironically, if our government doesn’t participate in bringing along the tipping point to solar and other renewable-energy systems, it’ll happen anyway because of the strong demand in other nations that is driving the technology to be cheaper and more easily accessed. The only downside for us will be that, like with our clothes and computers and TVs and pretty much everything else except weaponry, we’ll be buying our solar panels from overseas.
The final point, which I also noted in my book Rebooting the American Dream, is that if we don’t strip oil of its strategic value, we will continue to be at the mercy of OPEC—which comprises more than a few nations that don’t much like us.
Stripping Oil of Its Strategic Value
Two hundred years ago, and for a thousand years before that, one of the most strategic substances on earth was salt. It was “strategic” because no army could travel without it—salt was necessary to preserve food in a prerefrigeration era. Wars were fought over it, and countries that had lots of salt made out well, while landlocked countries with no salt reserves were forced to sell their natural resources in exchange for it.
Oil is the new salt. It is now the planet’s number one strategic resource. And as has been noted by numerous commentators since the first Gulf War, in 1990–91, if the primary export of Iraq was broccoli, we wouldn’t have given a damn that Saddam Hussein was a tin-pot tyrant.
The unfortunate reality is that we have within and around our national boundaries about 3 percent of the world’s oil, but we consume about 24 percent of the world’s produced oil. So we buy what we don’t produce. This dependence represents a massive transfer of wealth from us to oil-producing countries. It’s a strategic blunder that would have horrified Julius Caesar, who expanded the Roman Empire all the way to central Europe when he ran out of fuel—wood—by deforesting virtually all of Italy,[4] and then paid the price as his empire began to collapse from overexpansion.
Countries like Saudi Arabia rake in billions from oil-dependent countries like the United States, and oil revenues fuel their economies. In 2008, for instance, Saudi oil revenues spiked to $281 billion, a quadrupling of revenues from 2002. In 2009, those fell sharply to $115 billion, still nothing to sneeze at.197 Oil revenues fund much of the fundamentalist Wahhabi movement within Saudi Arabia, and it’s out of this movement that come the most virulent anti-American and anti-Semitic rhetoric, textbooks, and television and radio programming.
Thirty years ago, the OPEC nations were producing around 30 million barrels a day, nearly half of the world oil consumption. Regardless of how much we buy from them or instead buy from Mexico, because oil is a fungible commodity, their production will continue and just go to others who are no longer buying from whomever we choose to buy from. The proof of this is that today OPEC production is still around 30 million barrels—even though world oil consumption has gone up and is now around 85 million barrels a day. The OPEC nations don’t adjust production to meet demand; they maintain it to control prices so they have relatively stable income.
Thus, the only way we can change this situation is to reduce the amount of oil we use. Oil is a strategic commodity, and we need to strip it of its strategic value.
So what do we use all that oil for that makes it a strategic resource? We certainly don’t use it to produce electricity—only 2 percent of our electricity is generated by oil, because we have huge domestic supplies of coal, which produce over half of our electricity. Pretty much nobody is producing electricity with oil except the oil-rich countries of the Middle East—even rapidly-growing countries like China and India, for example, are not producing oil-fired power plants.
Thus, moving to solar, wind, biomass, or even nuclear power to generate electricity in the United States will help tremendously with our CO2 output and all the pollution “externalities” associated with coal—but it will not make us less oil dependent or strip oil of its strategic significance.
The simple fact is that oil accounts for roughly 95 percent of the energy used for transportation in the United States (our military is the world’s single largest consumer of oil), and that’s what makes it “strategic.” If we want to strip oil of its strategic value so it can’t be used as a weapon against us and so we can use our remaining oil supplies for rational things, such as producing plastics and medicines, we need to shift our transportation sector away from oil, and do so quickly.
This has been the essence of T. Boone Pickens’s rant, although the eccentric oil billionaire is now a natural-gas billionaire, and he’s suggesting that we convert our truck fleet in this country from oil to natural gas, which is nearly as bad a source of greenhouse gases as is oil. He’s right that such a change would make us stronger and safer, both militarily and strategically, but he misses the global-warming part of the equation (which is also increasingly becoming a strategic issue, as global climate deterioration leads to crises both at home and abroad).
Europe, Japan, and China are moving fast to shift their transportation sectors from oil to electricity, mostly through the use of trains. Brazil did it over the past twenty years by mandating that all cars and trucks sold would have to be “flex fuel”—capable of burning gasoline or ethanol, diesel or biodiesel. The result is that Brazil now provides nearly half of their transportation needs with domestically grown ethanol made from sugarcane (over 80 percent of their cars and trucks are now flex-fuel). And the added cost to Brazilian drivers to buy a flex-fuel car instead of gasoline or diesel-only car? About $100.
China is similarly moving in the direction of flex-fuel cars, and doubling every year their methanol production (mostly derived from domestically produced coal).
Flex-fuel cars can also burn part-ethanol, part-gasoline. If, for example, we were to shift to only 20 percent of the fuel being used by a car being gasoline (the remainder being ethanol or methanol), then a single gallon of gas would go five times as far. A 40-mpg car would become a 200-mpg vehicle in terms of the strategic resource of oil-derived gasoline.
4
The most conspicuous consequence of the deforestation of Italy during the early years of Caesar’s rule was the “currency crisis,” in which the cost of refining the silver used in Roman coins doubled—because the cost of the wood used to fire the smelters more than doubled. Some historians argue that this moment—when Rome could no longer supply its own energy needs—was the first signal of the beginning of the end of the Roman Empire. Interestingly, 1970 is widely accepted as the “peak oil” year for the United States, when our domestic oil supplies began an irreversible slide and our imports began to shoot up from 10 to 20 percent into the 50 to 60 percent range, where they are today. Then president Richard Nixon called for an alternative-energy strategy to get us off oil, and President Jimmy Carter actually put one in place in 1978, but Ronald Reagan rolled it back in 1981, leading directly to a dramatic increase in our imports of foreign oil.