America Wins: Fuel Prices

Dealing with high fuel prices isn’t going to be easy, but it can be good.

Getting the answer right will set up the triple play of this American century.

Breaking our addiction to oil can:

• Improve the national security of the United States as we stop funding terrorists with our gasoline purchases.
• Create jobs in South Carolina as we develop and deploy fuels of the future.
• Clean up the air as we switch to the clean fuels of the future.
  

It’s not going to be easy. It’s as though we’ve been on the couch for 35 years since the 1973 Arab oil embargo, and we’re thinking about getting up and exercising American creativity. Painful? Yes. Profitable? Amazingly.

Here’s a plan:

1. Reinvent the Car

a. Start by conserving fuel with higher fuel efficiency standards.

• Deploy technology like low rolling resistance tires, a Michelin invention that saves gas.

b. Use clean diesel.

• BMW will soon be making cars in Spartanburg with 35 mile per gallon clean diesel engines.

c. Expand tax incentives for gas-electric hybrids.

• BMW has announced that its first gas-electric hybrid will be made in Spartanburg!

d. Create incentives for plug-in hybrids.

e. Develop cellulosic ethanol, moving away from corn-based ethanol which has fuel competing against food.

f. Make a moon shot, within-the-decade commitment to:

• Better batteries that charge within minutes; hold charge for hundreds of miles; and are made of elements found within the U.S.
• Better solar panels that more efficiently convert sunlight into electricity.
• Hydrogen – the most magnificent portable fuel.

2. More Electricity

a. Extend President Bush’s renewable energy tax credit.

• If the renewable energy tax credit is extended, we will overtake Germany as the No. 1 producer of wind energy by the end of 2008.
• GE is the No. 2 installer of wind units in the world. Much of that work is done at their Garlington Road plant in Greenville.
• GE is looking for 200 more engineers to work at their Greenville facility. Eureka! There’re jobs in the wind!

b. Build more nuclear power plants.

• Coal-fired plants belch carbon dioxide 24/7.
• Nuclear plants have a waste issue, but they produce no greenhouse gasses.
• Advanced nuclear reactors may be the most efficient way to split water to create hydrogen for transportation.
• Construction power houses like Fluor Corporation will construct some of those plants. Stainless steel welders (you need lots of those to build a nuclear power plant) can make $150,000 a year.

c. Continue to develop solar energy.

• Fully implement net metering so that homeowners and commercial building owners can profit from installing solar units.

d. Develop clean coal technologies.

• Deploy clean coal processes that burn hydrogen separated out of coal. Capture and sequester the carbon.
• Because sequestration is not possible everywhere, continue research on other ways to capture the carbon. South Carolina firms are studying ways to feed carbon dioxide to algae and then use the algae for biodiesel.

3. More Oil and Gas

a. Drill safely for oil and gas offshore.

b. Build more refineries.

c. Save some oil for when we really need it. Some pharmaceuticals and plastics can only be made from oil. Rather than just burning up reserves in special places like ANWR, why not hold on to those resources for when oil is really hard to find?

• After a 10-year construction/drilling project, ANWR may produce 1 million barrels of crude oil per day. By then, the U.S. will be consuming 27 million barrels per day. So it would constitute 1/27th of our supply. That’s why T. Boone Pickens, the Texas oil tycoon, says it’s “ridiculous” to think that ANWR can solve our problem.

4. Better Buildings

a. Buildings use 40% of the energy we consume.

b. Act locally to require better insulation and better design in new buildings.

5. Avoid quick, easy and wrong solutions

a. After sitting on the couch for 35 years, there’s no pill we can take to cure our problems. We’ve got to get up, shake-a-leg and stop eating so much fuel.

b. Examples of quick, easy and wrong solutions (what not to do):

• Not! Suspend the gas tax for the summer – just means we deficit finance road construction and repair.
• Not! Stop filling the strategic reserve. During Hurricane Katrina gas was almost gone in the Upstate. The reserve is there to keep us ready for natural storms and oil storms (the kind caused by terrorists).
• Not! Just drill more holes. (Bring me some more nachos. Don’t forget the cheese.) We have only 2% of the world’s known oil reserves, but creativity is our stock-in-trade. “Get me more oil” just prolongs our addiction. As the former head of the CIA told the Foreign Affairs Committee a while back, if we want to ruin the day of the Iranian oil minister, we’d have GM announce that it’s bringing to market a 500 mile per gallon plug-in hybrid.
• Not! Excess profits tax on the oil companies. Re-live the 70s; make Jimmy Carter Secretary of Energy in a Clinton administration. He’ll bring back platform shoes, disco dancing and excess profits taxes!