‘Addiction to Oil’ Calls For a More Direct Intervention
Let’s say the energy bills in your house are too high. One response might be to start saving for a new, more efficient house you could afford in 10 or 20 years.
Or you could replace the windows and improve the insulation today.
President Bush, in the energy plan he announced in his State of the Union speech last week, chose the first strategy. Bush promised more federal energy research, primarily into technologies that might reduce America’s fossil fuel dependence years from now. But he rejected the common-sense measures that could bring immediate improvements and maximize the long-term benefits of the new research.
The Bush plan did contain environmentally friendly measures that Democrats have ignored in their shrill denunciations of it. The president moved toward them by proposing more federal research dollars for solar and wind energy and next-generation cars that could run on hydrogen fuel cells or “cellulosic ethanol” produced from agricultural waste. These are necessary steps for breaking what Bush called America’s “addiction to oil.”
But they are not sufficient -- not even close. The big flaw is that Bush did not propose any new government action to accelerate the movement of ideas from the lab to the marketplace. The federal government has three principal tools to speed the deployment of new energy technologies. One is a carrot: its own massive purchases of vehicles and electric power. The next is a stick: regulations, such as automotive fuel-economy standards, that require private companies to produce more energy-efficient products or rely less on fossil fuels. The last can be either stick or carrot: tax hikes, or cuts, that steer energy use.
Bush supported some tax breaks for efficiency and alternative energy in last year’s energy bill. But he hasn’t used federal purchasing creatively enough, and he has consistently opposed mandates on private companies. That leaves him with too few levers to drive change.
Higher oil prices are already changing the way America uses energy -- somewhat. Utilities are experimenting with renewable sources. American auto manufacturers are belatedly investing more in hybrids.
Yet higher oil prices, by themselves, are unlikely to spur change on the magnitude needed. The federal Energy Information Administration projects moderate increases in automotive fuel economy over the next 25 years, but not nearly enough to offset more cars traveling more miles: it forecasts that America in 2030 will consume 36% more oil for transportation than it does now (and import slightly more of its oil than today). Likewise, the agency projects growth for renewable energy, but not enough to make it a central source of power.
Even the research breakthroughs Bush is pursuing might not change these equations very much. Auto companies, utilities and the oil industry have massive investments in the energy status quo; the availability of a technologically appealing alternative isn’t always -- or even usually -- enough to spur a fundamental shift. “Pumping money into research is great,” said Nancy Sutley, deputy mayor of Los Angeles for energy and the environment. “But until you give people a reason and a need to jump from research to commercialization, they can spend years and years massaging the technology, trying to make it perfect.”
States around the nation have started nurturing new technologies with the tools available to government. Many are employing their procurement dollars to enlarge the market for fuel-efficient vehicles. New York’s Republican Gov. George E. Pataki recently required that by 2012, state vehicles obtain 10% of their fuel from bio-diesel blends derived mostly from soybeans. The city of Los Angeles is now buying only hybrids for all passenger vehicles except police cars.
Twenty-two states, as well as some cities, have now required utilities to provide a minimum percentage of their electricity from renewable sources. In December, Los Angeles’ Department of Water and Power, under prodding from Mayor Antonio Villaraigosa, said it would obtain 20% of its power from renewable sources by 2010.
Such a mandate, Sutley said, assures manufacturers that a reliable market for renewable technologies will exist. That inspires investment in innovation and improvement. “When we say, ‘We need to buy these renewable technologies, what have you got?’ ... then you get people to seriously push the technology so it is cost-competitive with other types of fossil fuels,” she said.
At the federal level, though, Bush has rejected these tools. The federal government (particularly the Defense Department) does some “green” procurement, but Bush last week let pass the opportunity to set more ambitious goals.
Bush’s opposition last year helped doom Senate legislation requiring utilities nationwide to produce 10% of their power from renewable sources by 2020. His administration has missed deadlines to release 18 appliance efficiency regulations that would cut electricity use. Most important, he has unwaveringly opposed the most effective short-term step the U.S. could take to reduce oil consumption: raising fuel economy standards for cars and trucks.
Relying on the market alone to wean America from oil is like trying to deliver an international letter by dropping it in the ocean, hoping the tide will carry it to the correct address. Washington needs to establish a clear direction, using all the tools at its disposal, from research subsidies to federal procurement and regulatory mandates.
When government demands greater energy efficiency, American engineers have repeatedly demonstrated they can reach the bar. Because of a regulation that became final last month after long opposition from the Bush administration, your next air conditioner will use 30% less electricity. Over time, tougher standards could squeeze mileage gains from cars at least that great. If we require American companies and consumers to do better, they will.
Ronald Brownstein’s column appears every Sunday. See current and past Brownstein columns on The Times’ website at latimes.com/brownstein.