Oil dependence should be campaign issue

Here are three numbers that ought to matter to you. $2.30. $51. $300 billion.

The first number is what I paid for a gallon of gas Tuesday when I filled up my car.

The second is the record price reached on U.S. markets this week for a barrel of high-grade crude oil.

The third number is a conservative estimate of the bonanza that members of OPEC, the Organization of Petroleum Exporting Countries, will haul in this year. That amount is almost three times what OPEC earned in 1998.

All these numbers add up to a growing energy crisis that is being largely ignored in this smash-mouth presidential election.

“I am astonished that energy has not played a greater role in the debate,” former Colorado Sen. Tim Wirth, the co-author of an article on energy policy in Foreign Affairs, told me.

What makes it even more astonishing is that American dependence on foreign oil has deepened and is certain to grow in the years ahead. The United States imports more than half the oil it uses. Imports have doubled since the oil crisis of 1973, while natural gas imports have grown fourfold.

Pushed by the higher oil demand from North America and China, market speculation and growing insecurity in the Middle East, oil prices seem likely to remain at record levels.

The United States has taken steps to diversify its sources of supply to non-Middle Eastern producers such as Venezuela, Mexico and Nigeria. Russia is making a bid to supply oil and gas beyond Europe.

But in a tight market, the big Persian Gulf producers are the only ones with significant reserves. They are going to dominate world oil markets.

“We are increasingly dependent on the most volatile and unstable region in the world,” observes Wirth. Even worse, we are putting hundreds of billions into the hands of repressive regimes such as Saudi Arabia, which have funded Islamic extremists. “The riches from oil trickle down to those who would do harm to America and its friends,” Wirth and his co-authors wrote.

Yet, there are solutions right at hand. First, let’s get rid of one illusory fix — drilling in Alaska’s wildlife refuge, or for that matter anywhere in the United States. There are simply not enough oil and gas reserves to do more than make a minor contribution. “We can’t drill ourselves out of this,” says Wirth.

Oil mostly goes to make fuel for vehicles, while natural gas (along with coal, hydro and nuclear energy) is used to generate electricity. The quickest road to energy security lies in the fuel area.

The first step is the promotion of hybrid engines. As usual, American car producers are lagging way behind the Japanese on this front, and folks are waiting months to buy one. We need to help Detroit redo its plants and provide tax incentives to consumers to buy their products.

A close second is biofuels — combustible fuel for cars and trucks that is produced from vegetable matter. This is not just ethanol from corn but also, for example, fuel from rice husks left in the fields of California’s Sacramento Valley. According to a recent Senate hearing, biofuels could supply up to a quarter of our liquid fuel needs by 2025.

Hydrogen-fueled cars are a promising technology worthy of support. But it is too far down the line to deal with our immediate crisis.

When it comes to power, the most pressing needs, Wirth and others argue, are to modernize our decrepit power grid to allow smooth and efficient transfer of electricity across regions. The blackouts in California and more recently in New York have prompted much talk about this but not much action, especially from the federal government.

Cleaner burning coal and new generations of nuclear power should also be part of the mix.

Kerry has all of these pieces in his platform, calling for a “Manhattan Project” to make the United States independent of Middle East oil. Bush also embraces many of these ideas but puts more emphasis on domestic production and very little on energy conservation.

Neither man has spent much time talking about this issue. For a start, the moderators for the next two debates need to put this question on the table. Meanwhile, be prepared to dig deeper into your pocket at the pump.

— Daniel Sneider is foreign affairs columnist for the San Jose Mercury News.