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Knight-Ridder: Oil Independence is possible, but does America want it bad enough?

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  • Felix Kramer
    This story appeared different days in different papers of the national Knight-Ridder chain....it never made it into the print edition of our hometown San Jose
    Message 1 of 1 , Feb 26, 2006
      This story appeared different days in different papers of the
      national Knight-Ridder chain....it never made it into the print
      edition of our hometown San Jose Mercury News.

      Oil independence is possible, but does America want it bad enough?
      Posted on Tue, Feb. 21, 2006
      Knight Ridder Newspapers

      WASHINGTON - President Bush's State of the Union pledge to end
      America's oil "addiction" and his tour of emerging energy technology
      centers this week have touched off a national debate on how to
      achieve energy independence.

      "The answer is pretty simple. We will never get to energy
      independence while we are using oil as the major fuel," said Severin
      Borenstein, director of the University of California Energy Institute
      in Berkeley.

      There are ways to break America's oil addiction, experts say, but it
      won't be easy. Cures include stricter conservation, higher
      fuel-economy standards, alternative fuels made from common crops and
      next-generation batteries for hybrid cars that could get more than 100 mpg.

      These and other options are promising, but all would require
      sacrifice and trade-offs. And, importantly, none are yet
      cost-competitive with oil. That's the biggest challenge to escaping
      America's oil-based economy. Although growing global demand has
      strained supplies, oil remains widely available and relatively cheap,
      even at today's high prices.

      In November 1973, President Richard Nixon announced "Project
      Independence" to end U.S. reliance on foreign oil by 1980. He asked
      William Hogan to help lead the crusade. Hogan spent the ensuing
      energy crisis years as deputy director of the forerunner to today's
      Department of Energy. But Americans are now more dependent than ever.

      Here's what Hogan thinks of Bush's pledge to end America's oil addiction:

      "My honest reaction was I wish he hadn't said it."

      Hogan believes energy independence is illusory. Oil remains the
      world's most cost-efficient fuel and is likely to remain so
      indefinitely. The real goal, he believes, should be reducing
      Americans' vulnerability to price and supply shocks.

      The problem is "there's still all this oil in the Middle East" said
      Hogan, now a Harvard University professor. Because the Middle East is
      home to most of the world's proven oil reserves, it's expected to
      remain the low-cost oil producer for decades. And oil is likely to be
      the fuel of choice as long as it remains cheaper than alternatives, Hogan said.

      If America went cold turkey, it would mean switching to higher-priced
      or heavily subsidized alternative fuels, which Americans and the
      government have resisted since Ronald Reagan won the presidential
      election in 1980.

      And there's still the question of how quickly the nation could
      replace the 136 million gasoline-powered cars that cruised America's
      highways in 2004, the latest year Federal Highway Administration data
      are available.

      During his State of the Union address, Bush called for reducing
      three-fourths of the oil that the United States purchases from the
      Middle East by 2025. A day later, his energy secretary clarified the
      goal - it's actually to reduce oil imports from anywhere by the
      equivalent of 75 percent of projected Middle East imports.

      The Energy Department projects that Middle East oil imports will
      total 6 million barrels per day in 2025, so Bush's goal means
      displacing 4.5 million barrels a day by then.

      That's more like a bartender taking away the glass but leaving the
      bottle. The United States would still be consuming nearly 23 million
      barrels per day of oil, and about 13 million barrels a day would come
      from abroad.

      Bottom line: Under Bush's approach, America would remain addicted to
      foreign oil and still vulnerable to price shocks in a global market.

      The surest way to break oil addiction is to make gasoline much more
      expensive. High gasoline taxes have helped Europe discourage
      consumption and promote more fuel-efficient cars.

      In that vein, Americans for Energy Independence proposes a gradually
      rising import energy tax. The revenue it would generate "would be
      used for incentives to spur the move to plug-in hybrids (gas-electric
      cars) and a national bio-fuels campaign," said Chris Wolfe, the
      group's president.

      Logical, perhaps, but likely?

      "That's a non-starter, not just with Republicans but Democrats," said
      Borenstein of the University of California. He doubts that
      politicians have the stomach to impose a so-called "sin tax" on oil.

      California may soon test that. A signature drive is under way there
      for a referendum on taxing oil to create incentives for alternatives.

      Another option is to sharply increase mileage standards for new cars.
      During the 1970s, Congress imposed standards on carmakers, and fuel
      efficiency for passenger cars jumped from an average 12.9 mpg in 1974
      to 27.5 mpg in 1985. The requirements for cars haven't been raised
      since, and they're lower for trucks, including SUVs.

      The nonpartisan Congressional Budget Office said in 2004 that raising
      minimum mileage requirements for cars to 31.3 mpg could reduce
      gasoline consumption by 10 percent. But, the CBO warned, that would
      increase the average car price by $900.

      The CBO said a 10 percent cut in gasoline consumption could be
      achieved at lower cost by raising the gas tax. The last time the gas
      tax was raised was in 1993, when President Clinton persuaded the
      Democratic-led Congress to increase it by 4.3 cents per gallon. But
      Republicans blasted the tax hike and Democrats lost control of
      Congress in the 1994 elections.

      The Rocky Mountain Institute, a Snowmass, Colo.-based energy research
      organization, offers a blueprint on how to attain oil independence by
      2025. Its 2004 book "Winning the Oil Endgame" said U.S. oil
      consumption could be halved by 2025 with alternative fuels and
      conservation measures.

      The institute recommends making cars from lightweight materials such
      as carbon-fiber composites. It also suggests "feebates," which
      combine steep fees on vehicles with poor gas mileage and government
      rebates for fuel-efficient vehicles. Owners of gas-guzzling SUVs
      would pay fees, while drivers of gas-electric hybrids or vehicles
      running on ethanol would get tax rebates.

      "To achieve this does not require a revolution, but merely
      consolidating and accelerating trends already in place," wrote Nathan
      Glasgow and co-authors.

      Bush's proposals spotlight two alternatives to gasoline: new battery
      technologies for electric cars and mass production of enzymes that
      convert plant fiber into ethanol fuel.

      Consumers are snapping up hybrid cars by Toyota, Ford and Honda.
      Those cars have two motors, one powered by gasoline, the other
      electric. The gasoline motor recharges the battery. The cars achieve
      roughly double the mileage of a gasoline-only engine.

      Some 200,000 hybrids were sold last year, about 1.2 percent of the 17
      million cars sold in the United States.

      The next big thing is expected to be plug-in hybrids whose batteries
      are recharged by the gasoline motor, but also can be plugged into any
      120V electrical outlet for charging. Once perfected, these stronger
      batteries could achieve 100 mpg or more.

      "You're substituting electricity for gasoline - that's the big
      benefit," said Felix Kramer, founder of CalCars.Org, a nonprofit in
      Palo Alto, Calif.

      CalCars believes that if all U.S. vehicles in 2025 were hybrids, and
      if half were plug-ins - two big ifs - U.S. oil consumption could fall
      by 8 million barrels a day, or 30 percent. Hybrids that run on
      alternative fuels could cut oil consumption even more.

      Bush also backs cellulose-to-ethanol technologies. Corn-based ethanol
      production is expected to reach 6 billion gallons next year;
      researchers estimate a maximum production potential of 15 billion
      gallons per year. That's about 12 percent of the projected 120.4
      billion gallons of gasoline that the Energy Department estimates
      Americans will consume annually in 2025. Hardly independence.

      But mass production of biologically engineered enzymes that can break
      down virtually any plant fiber for conversion to ethanol offers hope.
      Add these to the mix and suddenly ethanol's production potential
      leaps to 100 billion, approaching levels needed for independence.

      "I think it's very doable. But it depends on whether policymakers
      provide the incentive to get it done," said Georg Anderl, director of
      operations for Genencor International, a Palo Alto, Calif.-based
      biotechnology company.

      No one has built a costly large-scale commercial bio-refinery. Anderl
      believes the industry is waiting for Washington to help.

      "What we need to have is a system-level integration of all the
      technology that's needed ... to make ethanol from crop waste. ...
      What's going to be required is government funding to really provide
      the impetus and bring that together," he said. "No one company is
      going to do that alone."

      Even then, huge infrastructure hurdles would remain. Currently, fewer
      than 700 filling stations nationwide sell ethanol. More than 167,000
      sell gasoline.

      Infrastructure hobbles another hope: hydrogen fuel cells. A few years
      ago, hydrogen was viewed as the heir apparent to gasoline.
      Hydrogen-powered cars rely on electric motors powered by fuel cells
      that store pressurized hydrogen.

      Experts believe it could take up to 20 years before hydrogen fuel
      _cf_s are affordable and reliable enough to market. Then there's the
      challenge of building a national distribution system, because liquid
      hydrogen must be stored at temperatures under minus 400 degrees Fahrenheit.

      With so many obstacles to energy independence, Jens Mueller Belau,
      Shell's global technology manager, thinks gasoline will still
      dominate 20, 30, even 50 years from now.

      "However, the diversity of fuels will be growing in the next few
      years," he said.

      Shell's U.S. fuels marketing manager, Dan Little, says all the
      emerging alternatives will help reduce America's dependence.

      "If you put them all together, they're all going to play an important
      role in overall fuel solutions," he said.


      For more on President Bush's Advanced Energy Initiative go to:


      For a PDF version of "Winning the Oil Endgame" go to:


      For more information on Plug-In hybrids, go to:


      For more on cellulose-to-ethanol technology, go to:


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      Felix Kramer fkramer@...
      Founder California Cars Initiative
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