How America Can Quit Its Oil Addiction

If the recent Presidential campaign demonstrated anything, it was that Americans want and expect the next president to make dramatic changes in U.S. energy policy. Americans want to see a substantial reduction in their country's reliance on imported oil— especially from hostile countries or those perceived as posing a significant security threat, such as the nations of the Middle East or Russia and Venezuela. With concern over global warming growing, Americans also want to see a large increase in reliance on renewable energy sources, such as wind and solar power. And they want any progress on the energy front to create jobs and economic opportunities at home, rather than in foreign countries. (Story continued below...)

All summer and fall, the two candidates spoke time and again about energy as a transcendent issue, one that affected national security as well as economic affairs and that would demand special attention from the next president. As a result of such rhetoric, voters will expect substantial progress—and fast. Achieving the goals listed above, however, will require major social, economic and political adjustments, as well as unbelievably complex legislation. Billions—perhaps trillions—of dollars in new federal subsidies, loans and tax breaks will also be needed to jump-start the development of new energy systems. The next president risks devoting weeks and months to promoting a bold energy plan only to run into gridlock as key components get bogged down in congressional squabbling. High expectations could turn to bitterness as the optimists are forced to confront political and economic realities.

To prevent that, it's essential that the next president focus less on the nuts and bolts than on the overall objective of the new energy plan: namely, where it should lead. Although both candidates talked about energy reform with great passion, neither offered a clear answer to that question. But the next president should boldly announce that the United States will begin moving in the next few decades from a petroleum-centered energy system to one that is diversified, technology-driven and climate-friendly.

America didn't always rely on imported oil. Back in the '50s and '60s, the United States was virtually self-sufficient and produced vast quantities of relatively inexpensive crude. Around this cheap and versatile fuel, the United States built an impressive civilization—one featuring universal car ownership, highways stretching to the horizon, endless suburban tracts, affordable airline travel, malls, Disneyland and other aspects of the American Dream. But the United States no longer produces enough oil to sustain this civilization—yet it continues to rely on petroleum for a huge proportion of its energy needs. According to the U.S. Department of Energy, the United States gets 40 percent of its total energy from petroleum, about 23 percent each from coal and natural gas and much smaller percentages still from nuclear, renewables and hydropower. This dependence on oil is much higher than that of any other major country—France, Germany and Japan, for example.

Such an overreliance on oil has led to virtually all of America's energy problems. Many aspects of the American Dream have become unattainable to ordinary citizens. Gasoline has grown expensive. Green energy development has moved far too slowly. And America has had to turn more and more to foreign imports to satisfy its energy cravings. An overreliance on foreign oil is a symptom of this overall dependence on petroleum. The United States has become increasingly dependent on imports since 1970, when domestic oil output reached a peak and began an irreversible decline; today the country obtains about 60 percent of its oil from foreign suppliers.

It would be one thing if those suppliers were all friendly, stable, law-abiding neighbors like Canada, but this is not the case. Because most of the reserves in the countries the United States once relied on have now also been exhausted or soon will be, it must rely increasingly on supplies from unstable, unfriendly suppliers in the Middle East, Africa and Central Asia, where it faces both recurring conflict and growing competition from other oil consumers, including China. No matter how hard America tries to ensure its access to these supplies—by military means or others—it is unlikely to find a steady, reliable source of oil.

Both presidential candidates spoke of their desire to reduce U.S. reliance on imported oil, but it is not really practical to distinguish between foreign and domestic supplies in the marketplace. The only way to sever ties with foreign oil producers is to use less oil, period. In pursuing this goal, the next president should not aim at securing modest incremental gains, but should set an ambitious goal: reducing oil's role as America's primary energy source (from 40 to 25 percent) and increasing the share obtained from renewables and hydropower to the same percentage (up from 6 percent) by 2030.

To get there, the new administration will have to consider many initiatives at once: accelerating the development of advanced biofuels using nonfood crops, and of "plug-in" hybrid cars and advanced automotive designs; expanding public transit options; and persuading Americans to drive less, drive slower or carpool more often. Since none of these initiatives are likely to succeed by themselves, all will have to be promoted with equal vigor.

Many such options will be costly and contentious. The development of climate-friendly coal, entailing the separation of carbon from the fuel mix and burying it underground, will no doubt prove expensive and difficult. Likewise, any increase in nuclear power will have to address the problem of what to do with leftover radioactive waste. And a substantial increase in wind and solar power will require stringing high-tension wires across the countryside. Yet without more electricity, it will not be possible to begin mass-producing plug-in hybrids and expanding the reach of rail transportation, thus reducing petroleum use.

These steps will require presidential decrees, legislative initiatives, budgetary allocations and so forth—each step inviting resistance from special-interest groups. Advocates of accelerated domestic drilling will clash with those who seek to protect pristine wilderness areas; proponents of wind and solar power will clash with those who favor nuclear power. To work out the details of which specific steps to take to reduce reliance on foreign oil and which types of renewable energy deserve the greatest support, the president in his first days should convene a committee of experts for systematic scrutiny and evaluation. The American public and members of Congress should also be invited to submit their views on the relative merits of competing proposals. But the ultimate objective of these efforts should remain clear: to diminish U.S. dependence on oil and increase America's reliance on climate-friendly alternatives developed with American skills and technology.

Such a vision would have numerous attractions. First, if the country could reduce its petroleum consumption by approximately two fifths, it could give up on oil supplies from the Middle East, Russia and other precarious sources, relying instead on domestic oil for the bulk of its needs and turning to friendly suppliers like Canada for the rest. Second, a substantial increase in renewable-energy sources would reduce emissions of the greenhouse gases responsible for global climate change. And because these renewable systems are not yet available in anything approaching the necessary numbers or levels of efficiency, Washington would have to invest in American products and technology to achieve its targets—generating new jobs and economic opportunities.

A transformation of this sort would allow dramatic changes in foreign policy. Instead of competing with China for access to oil, the United States could cooperate with the Middle Kingdom in developing alternative-energy systems. Reduced reliance on Middle Eastern oil would also allow the United States to scale down its military profile in the region, undercutting the appearance of militant anti-American organizations like Al Qaeda.

This is a vision that the American people could rally around. Although they will have to iron out many differences over the best ways to achieve this grand objective, Americans can do it—and do so in a spirit of amity and compromise—if they know where they are headed and have a bold president ready to lead them there.