Friday, April 13, 2012
In a follow-up conversation, Marc Goldman had this to say about Frum's answer:
David [Frum] is right to lay out for [inSIGHT] readers that when we talk about oil supplies and energy diversification we are talking about transportation fuel. We don't use oil to generate electricity; we use domestically produced coal, natural gas, nuclear, hydroelectric, wind, and solar. America imports oil from nasty and dangerous regimes almost exclusively to fuel personal and commercial vehicles. Having rightly focused on transportation, David makes a case for domestic oil, conservation, and a better price structure for gasoline.
But as long as oil in the form of gasoline is the only thing that propels cars and trucks (and ships and airplanes), we will be subject to oil pressure. We are playing/struggling with fuel cells, expensive electric cars, and other technologies that may one day give us vehicles that operate entirely differently, but right now we can use existing technology to break the link between transportation and gasoline by adopting open fuel standards.
There are two bills before Congress (HR-1687 and SR-1603) that would require any new car produced that runs on gasoline to also be able to run on alcohol-based fuels — primarily methanol and ethanol. The additional cost to a new car would be about $100 for gaskets and hose material. You can get more information at www.setamericafree.org.
There are already flex-fuel vehicles, of course, but this [the OFS bill] would open new demand for alcohol fuel and additional pumps at fueling stations — which the market is fully able to meet with the relatively recent understanding that we have trillions of cubic feet of accessible natural gas.
The idea of a "government mandate" really disturbs some people, although as mandates go, this one is minimal. Private capital can be expected to enter the domestic fuels market, both at the production end and at the pump, creating domestic jobs as well as improving our balance of payments. And people won't be required to put alcohol-based fuel in their cars; they can pay the going rate for gasoline. But given gas at $4.25-4.50/gallon and the differential for methanol and ethanol, it is unlikely that they would.
This is not an experimental technology. Brazil has moved almost entirely away from gasoline-only-powered automobiles, and the same companies that make cars for Brazil make them for the U.S. market. The fuel is here, the technology is proven — what we are lacking thus far is leadership.
This goes back to where David and I agree: some of the world's nastiest people pump most of the world's oil. Our Congress and our president have no greater obligation under the Constitution than to provide for the common defense. In my mind, that means they have to make us independent of Iran, of Saudi Arabia, of Venezuela.
Iran is an apocalyptic country — if they do decide to destroy the tanker passageway in the Strait of Hormuz, Americans will see that our dependence on oil is not only about personal vehicles and paying stratospheric amounts of money to fill our personal gas tanks. Oil is how our food gets to market, how we get to work, how we export our products and import goods from other countries — it is hard to imagine the chaos and dislocation if the transportation industry came to a halt. Our way of life, indeed our very ability to function as a nation depends on the movement of goods, services, and people across a very large country and beyond.
Our way of life depends on our alliances as well.
Right now, our friends in Europe are paying $8-10/gallon for gas (which hasn't reduced their dependence on imported oil despite somewhat greater fuel economy; there is a limit to the relationship between price and consumption). They don't have the resources for methanol and ethanol that we have, but if the United States shows leadership by breaking the link between transportation and gasoline, they will follow us. And interestingly, Israel — our good friend, but one that has mixed relations with the countries of Europe — is sitting on a major, major natural gas find. It doesn't take much imagination to foresee the next energy-based alliance being the U.S.-Europe-Israel.
That works much better for me than Iran, Saudi Arabia, and Venezuela.