Well, we’re facing $3.00/gal prices for gasoline this summer, and the mainstream press and public opinion view this as a disaster. My view is somewhat different; I think that the price is not quite high enough. Our society has been living on borrowed time in terms of its energy budget for at least 30 years. Some of you may be old enough to remember the oil embargo of 1973 and the dislocation and angst it caused among both the citizenry and the government. Well, unfortunately either the shock wasn’t severe enough, or the collective skull was too thick because the message did not get through. The message is this:

1. There is a finite supply of oil

2. Oil is useful for many purposes

3. Burning oil for energy is a low-value use of petroleum

4. Having a transportation sector totally dependent on one source of energy is not intelligent

Interestingly, the electric utility industry learned its lesson after 1973. In that year, petroleum accounted for about 17% of electricity generation. Thirty years later, in 2003, petroleum accounted for a mere 3%.

However, this lesson was manifestly not learned by the transportation sector. Although there were a number of rather wasteful and ultimately unsuccessful government programs researching alternative fuels for transportation during the 1970s, there has been very little substantive effort by the automotive industry to invest in alternative fuels. One of the reasons for this situation is that the federal government is overly sensitive to the political ramifications of high oil prices. Thus, spikes in oil prices are often met with actions like releasing stocks from strategic petroleum reserves and other actions that have distorted the petroleum market and kept gas prices artificially low over the past several decades.

However, there is now a giant factor that will overwhelm the industry’s and government’s ability to circumvent the normal operation of commodity market forces; China, which is in the middle of an unprecedented rapid shift from traditional forms of transportation (e.g. bicycles and public transportation) to the personal automobile. The sheer magnitude of the Chinese market for gasoline and other petroleum products will absolutely ensure that the price for gas will remain high for the foreseeable future. The question is: How will the US react? If we can view this as an opportunity to finally free ourselves from the yoke of a transportation sector almost entirely dependent on petroleum, it could be a most beneficial result for both the economy and the environment.

Unfortunately, I believe that the automotive industry nor the government are not yet convinced that alternative fuels are the only option for our collective future. Rather, we continue to see pressure for such short-term ‘solutions’ as drilling in environmentally sensitive areas and sewing up political support in petroleum-producing regions through alliances with often unpalatable regimes and in essence maintaining a permanent military presence at levels comparable to the height of the cold war. Such policies are incredibly expensive, damaging to the prestige and reputation of the US and ultimately futile. Regardless of how much we drill and how much we spend to prop up oil regimes, petroleum will continue to be an increasingly scarce resource. I do not believe that it will disappear over the near- or mid-term, but the easily- and cheaply-recoverable sources of petroleum are disappearing, and the cost of replacing these sources will essentially guarantee that the days of cheap gas are numbered.

Therefore, I propose that a public/private program of focused research on alternatives to petroleum for transportation would be one of the most important efforts we could undertake at this time for a number of reasons. First, although the rudimentary technologies have been evolving for many years, it will take a great deal of research and development to make such technologies as hydrogen-power, electric powered and other alternatively-powered vehicles practical for large-scale adoption. Such research would have manifold benefits – not only would it help reduce our dependence on other nations for our energy, but it would also positively address major environmental issues, including air quality and global climate change.

Right now, however, nothing of the sort is happening. The automotive industry seems to have settled on hybrid vehicles as ‘the answer’. This technology, while useful, is inadequate in addressing the scope of this problem. These vehicles, although quite efficient, still require gasoline as the primary fuel. Plug-in hybrids, which allow the owner to plug the auto in to recharge it and lessen dependence on the gasoline engine are a step in the right direction, but seem to be facing industry reluctance. Beyond this, the options are more limited. Although there has been a lot of publicity over the concept of fuel cells, my opinion is that this technology is still many years from being practical for automobiles and some of its characteristics (e.g. high amounts of waste heat, environmental issues with substrates, etc.) may not make it ultimately the best choice. We need more research now to develop the motive systems for the 21^st century, and it’s just not happening at a rapid enough pace.

My idea would be to incorporate a tax on gasoline that would directly fund such research. This tax would have two benefits: First, it would raise the price of gasoline and thus discourage the sale of highly inefficient vehicles such as large SUVs. I know that this sort of thing pisses off a lot of people, but I believe that there is no inherent right to drive large, highly polluting, inefficient vehicles, and if you do, you need to pay something closer to the true cost of operating such a vehicle (including the costs to the environment and public health). Second, it would create a more stable source of funding for the necessary research. Although under optimum conditions the automotive industry would perform this research as a regular cost of doing business, the experience of the past 30 years has shown that the interests of the petroleum and automotive industries are much to intertwined and are not necessarily parallel to the interest of the public. Therefore, we need a structured program of public/private research to provide real solutions. I am tired of waiting for industry to ‘do the right thing’, and as a society, we simply can’t wait anymore.