Four More Years: The challenge for the next four years: to implement energy policies that allow plentiful energy at reasonable costs, that enhance energy security, and that reduce emissions of carbon dioxide. By James L. Sweeney.
Our nation needs to enhance energy security and
environmental security. With strong leadership,
the United States can adopt policies that accomplish both goals.
Since the 1973–74 energy crisis, the United
States has taken many steps to improve energy security. Technological
progress, governmental policies, and economic
incentives have together greatly constrained growth in oil use, making us less vulnerable to
oil shocks. At the same time the U.S. economy
continued to grow: In 1973 we used more than 1,400 barrels of oil per
million dollars (in 2000 dollars) of gross domestic product; in 2003
that figure was less than half as large. The
strategic petroleum reserve provides a shock
absorber against disruptions. Natural gas has grown as an alternative to
oil, creating additional supply diversity.
But the problem of oil security has returned. World
oil demand is again growing rapidly, driven by economic recovery,
international development, and, particularly, the rapidly growing Chinese
economy. We can expect tight oil markets for decades. Tight oil markets
bring higher oil prices. More important, though, tight oil markets bring
greater—and thus more damaging—price spikes from oil supply
disruptions.
At the same time, oil supply disruptions have become
more likely. Thirty percent of world oil is now
produced in the volatile Middle East. Worldwide
terrorism has increased risk to the oil
infrastructure. Attacks on Iraqi oil production/transportation facilities continue. Terrorist attacks in Saudi
Arabia have hit the oil system and its workers.
Together these two factors—the increased
likelihood of disruptions and the tighter oil markets—bring national
security risks.
Energy security will require reducing oil use,
hardening soft targets, maintaining the strategic petroleum reserve, and
creating economically viable substitutes for crude oil.
Security and vulnerability problems are not limited to
oil. If liquified natural gas (LNG) production
is concentrated in unstable regions of the world, growing international trade in LNG
will create new security problems. American centralized
energy systems, supplying large amounts of energy, provide soft targets for
terrorist attacks. And U.S. energy systems are vulnerable to inadvertent
disruptions, as illustrated by the Northeast power blackout.
Paralleling energy security issues are problems of
environmental security. Particularly
challenging is the growth of greenhouse gas emissions and the worldwide
environmental risks these emissions entail.
During the last 30 years the United States has taken
many steps to improve environmental security.
We have greatly limited sulfur emissions from electricity generation, thereby reducing
risks from acid rain. Criterion pollutants from
new automobiles have declined by orders of magnitude; the greatest
remaining problems are old, super-polluting vehicles. Air and water quality is improving, reducing risks to human health.
Although more progress is feasible and
desirable, environmental security has improved significantly.
But one particularly difficult problem remains:
atmospheric releases of greenhouse gases.
Evidence has become persuasive that growing concentrations of greenhouse gases increase average global temperature,
modify rainfall patterns,
increase severity of tropical storms, raise ocean levels, sharply disrupt ecosystems, and can be expected to accelerate species
extinction. Although greenhouse gases come from many sources, fossil fuel
combustion is the prime human-induced source.
Many policy options to improve national security would
also improve environmental security—and
vice versa. The challenge for the next four years is to implement energy policies that allow plentiful energy at
reasonable costs, that enhance energy security, and that reduce atmospheric carbon dioxide releases. Among such
policy options, strategies for governmental sponsorship
or encouragement of technology development seem particularly attractive.
The Bush administration’s hydrogen
initiative—a public sector/private sector
initiative to develop technologies for hydrogen-fueled motor
vehicles—deserves strong support.
Economically attractive hydrogen fuel cell vehicles would allow a shift from petroleum-based motor vehicle fuels to
hydrogen fuels. Our nation, and the rest of the world, could turn coal,
natural gas, wind—almost any domestic energy source—into
automotive fuels, thereby avoiding energy supplies from the unstable Middle
East. A hydrogen economy would greatly improve energy security and reverse
the upward trend in carbon dioxide emissions.
But technology, infrastructure, and institutional barriers are profound, and we cannot
be sure of success. The transformation would
not be fast but could be possible over the next 50 years.
In addition to the hydrogen initiative, we need a
clear vision of aggressive technology
strategies to solve the dual problems of energy security and of
environmental security and serious resource commitments supporting that
vision. We need increased federal budgets for pure research and applied
research to create low–carbon dioxide technologies, technologies to
increase energy supply from secure sources, and technologies to improve
end-use energy efficiency. But federally funded research cannot be the
entire answer; the United States needs more private sector initiatives,
through corporate research or corporate funding of external research.
Energy efficiency improves energy security and
environmental security. Corporate average fuel
economy (CAFE) standards for passenger cars and for light-duty trucks need tightening, particularly for SUVs.
But simply tightening the standards is not enough: The entire 30-year-old
CAFE system is due for reform. Marketable efficiency credits,
attribute-based standards, integration of car and truck standards, and
recognition of hybrid electric vehicles should all be part of a reformed
system. Increased automotive fleet efficiency would enhance energy and
environmental security over the next several decades. Attractive energy
efficiency improvements are not limited to automobiles. Improvements for
appliances, buildings, and industrial processes could all enhance energy
and environmental security.
Strengthening and expanding the electrical grid is
also important for energy security. Improvements should not be tied to an
omnibus energy bill that may remain stalled in Congress. Grid enhancements
should include more transmission, advanced control technologies, and
improved communication and coordination. We
must avoid a repeat of the Northeast power
blackout. Such an expansion can help the environment by allowing renewable
energy technologies to be integrated into the electric system.
Ever since President Eisenhower appointed a commission
to address increasing oil imports, most U.S.
presidents have adopted policies for improving energy
security and environmental security. My fervent hope is that the Bush
administration will give energy security and environmental security a
particularly prominent place on its agenda during the next four years.
Special to the Hoover Digest. Available from the Hoover Press is The California Electricity Crisis, by James L. Sweeney. To order, call 800.935.2882. James L. Sweeney, known for his work energy economics and energy policy, is a Hoover Institution senior fellow. |
QUICK LINKS:
Hoover Digest TOOLS: FOLLOW THE HOOVER INSTITUTION: 
|
