Time to Kill the Oil Beast

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.

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.