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Time to wean ourselves off oil dependency

This column has been rattling around in my mind for a good while. Each time I began writing, things got too complicated. So I’ve decided to strip it down and present my ideas as simply as possible.
The subject is the trouble that the nation’s economy is currently experiencing. If you believe today’s naysayers, the economic sky is falling. But then, these are the same people who predicted permanent growth during the boom of the 1990s. The truth is whatever is currently happening economically will not continue over the long term. The trick is to anticipate when changes are about to occur.
Today, the United States is dealing with two major economic difficulties complicating our problems. There is the general credit crunch caused by the financial industry making very risky mortgage loans. It is both infuriating and damaging to millions of ordinary Americans, but unfortunately it is not unprecedented. About every 15 or 20 years, something like this occurs.
Here is what happens. Sharpsters of all kinds from local yokels to the occupants of corner offices on Wall Street are constantly probing the financial system for soft spots and loopholes they can use to their advantage in making money through risky and barely legal activities.
It is pure greed without even a pretense of morality, and both the sharpster and investor share the blame. Since they work so hard at it, they often find ways to make a fast buck, but these are usually small and limited events. Every so often they find something like the lack of regulation of the home mortgage industry that they can drive a truck through, and that is what they proceed to do. This continues until it presents a problem so widespread it puts great stress and strain on the whole economy. At this point comes a belated show of resolve on the part of the government, and then these particular opportunities for unrestrained greed are closed by regulation.
This is what happened in the 1980s when the lack of regulation of the savings and loan industry caused a major economic meltdown. These economic car wrecks leave huge numbers of people as well as the taxpaying public in general holding the bag on millions and millions of dollars in losses.
While this, of course, is harmful, the problems finally pass away leaving behind a financial system a bit more carefully regulated. Given the nature of greed and the slowness of government to act, we should expect another jolt of this kind around 2030.
The second problem facing our economy ‘ higher and higher oil prices ‘ is more troubling in the long run. This is because it is based in a changing economic reality. The demand for oil worldwide is growing quickly as everyone, particularly developing nations like China and India, find they need more oil. At the same time, the possibility of finding significant new sources of oil appears to be decreasing. This is, of course, the classic supply-and-demand problem as too much money chases too little oil. The problem seems to be further fueled by speculation on the part of folks who want to make 5 percent on their money, daily.
The situation is not going away and will get worse over time. So we either face it and solve it or our economy and the economies of most of the rest of the world will be in long-term trouble. The question is how to go about solving it.
We need to begin by finding out, through careful investigation, just what percentage of the problem comes from speculation ‘ gambling on ever-rising oil prices ‘ then we need to enact regulation that can reasonably be expected to control speculation. It is doubtful we can eliminate speculation, but probably we can control it.
We can then begin to carefully look at the three methods of taking on the basic oil problem. The first and easiest is conservation, either voluntary or mandatory. Voluntary involves things like trading in your SUV for a hybrid car and keeping your tires at the correct pressure. Mandatory conservation is when car companies are required by law to increase the miles per gallon in all vehicles they produce or when the speed limit is dropped to 55. Everyone, whether they practice it or not, thinks voluntary conservation is a good idea. Mandatory conservation will be resisted by some and embraced by others.
The reality is that to have any effect at all we will need to combine both voluntary and mandatory conservation. While conservation can expect to help the situation, it will not solve the problem. Further action is needed.
It is here we need to make some hard decisions. There seems to be two paths open to us. The first is find new oil supplies by drilling (for example, in the Arctic National Wildlife Refuge or off the coast of the U.S.), getting more oil from the Canadian oil sands and opening up for development the shale oil deposits in the western U.S. Most of the oil sources developed in this way would take years to reach the gas pump, and how much effect they would have on oil prices is unclear.
The other possibility is for the U.S. government as well as private companies to undertake a major effort at developing alternative energy sources. This means hybrid, electric, hydrogen or even solar-powered cars. Efforts would also be aimed at growing wind, solar and perhaps ocean wave power. It would also probably involve exploiting more effectively our vast coal reserves as well as nuclear energy. Once again, it will take years before these efforts will payoff big time.
Thus, the question is more oil or more alternative energy sources. The reality will probably be a combination of the two. My vote, however, is for a much more vigorous effort to develop alternative energy sources. At some point in the very near future, I think we should end any federal financial support for further oil development. If oil companies want to drill, let them do it on their own dime.
I take this position not because I’m a tree hugger, nor do I think oil men are bad people; they just want to do what they are used to doing. You could call it a failure of imagination. Our reliance on oil has created the present problem. Just getting oil to market after it has been found has become a major difficulty. Most of the world’s supply is located in troubled and difficult places of the world. The Texas oilman T. Boone Pickens is right when he says, ‘This is one crisis we can’t drill our way out of.’ More of the same is not a solution. It is the avoidance of a solution.
We need to wean ourselves off of oil dependency. Politicians often talk pugnaciously about ending our dependency on foreign oil as if our dependency on American oil was a swell idea. The price of all oil ‘ ours and the other fellow’s ‘ is the same. Both are determined by the world market so the fact that the United States produces a bit more oil is not going to have a dramatic effect on prices at the gas pump.
Oil is rapidly becoming yesterday’s fuel. We need to be about the business of finding out what is needed to fuel the next 100 years.