1825 K Street, NW, Suite 400, Washington, DC 20006
202-955-5665 (tel) | 202-955-5606 (fax) | www.ourfuture.org
Brian Siu is an energy policy analyst at the Apollo Alliance .
While it is difficult to see beyond the incalculable suffering caused by Hurricane Katrina, the impact on U.S. fuel supply is undeniable. For days, we watched the storm move toward Louisiana’s oil and natural gas operations. As feared, the storm disrupted a tenth of U.S. refining capacity and 25 percent of oil production. Now, analysts expect gas prices to squeeze to $4 per gallon. At this time, it is difficult to assess the price spike’s duration because the extent of structural damage is unknown. What is absolutely clear, however, is that too much reliance on a single energy source is a dangerous thing. As Katrina illustrated, supply interruptions are beyond our control, and without alternative options, there is no safety net to suppress price movements. Instead, we’re given pronounced volatility and an economy that is vulnerable to natural or man-made disruptions.
Unfortunately, threats to America’s oil interests extend far beyond the Gulf of Mexico. As a nation that imports roughly 60 percent of its oil, we spend untold amounts each year securing our foothold in oil-producing regions. Even so, unfettered access to foreign reserves is doubtful given the emergence of competitive economies such as China, India and the European Union.
There is nothing new here. The United States has watched these events unfold in a state of political paralysis. In July’s 1,724 page energy bill, for instance, Congress had the opportunity to decisively address runaway oil consumption. Astonishingly, it did nothing. In fact, it systematically voted down measures that would have signaled a meaningful shift in U.S. energy policy. In June, Sen. Maria Cantwell proposed an energy bill amendment requiring the United States to reduce its imported oil by 40 percent over 20 years. At 7.64 million barrels per day, the savings would be significant. Ultimately, her proposal was rejected. In its place, the Senate adopted a weaker provision requiring U.S. oil consumption to decline by 1 million barrels per day. In the end, even that was perceived as too risky. Now, in the wake of a natural disaster, the real risks have become obvious.
If Congress really wants to limit risk, it will break with conventional oil policy. This means diversifying our transportation fuels and improving vehicle performance. There are many possibilities. New breeds of ethanol, for example, could function as a supply cushion, absorbing the impacts of petroleum disruption. And because these fuels are harvested and refined domestically, they would strengthen the U.S. trade position. In fact, agricultural fuels could function as a potent economic development tool for struggling rural economies.
Nationally, rural poverty rates exceed urban poverty rates by 25 percent. A closer look, however, reveals that extreme poverty is concentrated in rural areas. Of the 500 poorest U.S. counties, more than 90 percent are rural. And of the 382 counties where poverty rates exceed 20 percent, 95 percent are rural. Developing the nation’s untapped rural energy can channel new revenue streams to farmers. The Oak Ridge National Laboratory estimates that harvesting and marketing switchgrass for ethanol production could provide $6 billion in annual net farming income. Selling corn stover and wheat straw for the same purpose could generate an additional $2 billion.
Even so, U.S. energy security can not rest on alternative fuels alone. It requires us to become less sensitive to supply interruptions by using less energy overall. Efficient vehicles like hybrids would go a long way toward limiting energy consumption. And like alternative fuels, efficient vehicles would benefit the U.S economy by giving workers a role in this growing market segment. The Apollo Alliance, a coalition of labor, environmental, community and business leaders, estimates that a meaningful commitment to efficient vehicles could secure more than 128,000 jobs for U.S. workers.
These fuels and technologies already exist—but are disadvantaged by petroleum’s century long dominance. The strong public interest behind a stable fuel supply justifies equally strong government intervention. While it is too late to protect ourselves from the present catastrophe, we can protect ourselves from future events.