How America will achieve energy security
GOP presidential candidate Jon Huntsman commits to U.S. energy independence. Some advice for how he can succeed in that goal
Jon Huntsman unveiled his economic program Wednesday. At the center is a commitment to U.S. energy independence.
Yeah, I know, you've heard it before. Perhaps you saw the Jon Stewart bit where he edits together every U.S. president since Richard Nixon saying the same thing.
But the real news about energy independence is that the U.S. has in fact made great progress since the 1970s. Through the 1980s and until 1995, the United States actually burned less oil per year than it burned in the 1970s. Not until 1996 did the U.S. again consume as much oil as in 1978.
And while oil use has climbed since 1996, it has climbed by less than you might think: Only about 10 percent.
By other measures, the U.S. looks even better. The United States burns only half as much energy today to produce an additional inflation-adjusted dollar of output as in 1980. Progress.
Reducing oil use is simultaneously good for the environment, good for national security, and good for the long-run growth of the U.S. economy.
But understand how that progress was achieved:
Americans did not invent some alternative new engine or motor fuel. The cars of 2011 run on gasoline just as they did in 1971.
Instead, Americans did the following things:
* They used oil for fewer purposes. They substituted natural gas for oil as a fuel for heating homes. Electrical utilities retired oil-fired generators.
* They reorganized their society to use energy more efficiently. Hyper-energy-efficient freight rail regained its dominance over trucking.
* They devised incremental improvements in existing products. One example I discovered in my research from the 1970s still astonishes me: A fuel-efficient contemporary car uses less gasoline while driving than a typical 1960s car used while parked — because back in the 1960s, gasoline tanks were not air tight and allowed evaporation.
Perhaps our next chapter of energy progress will feature some over-the-horizon new engine or alternative fuel. But more likely, we'll achieve the next generation of efficiencies the same way as we achieved the last — more by changing the way we use fuel than by changing the fuel we use.
Here are some of those changes already becoming visible:
* After the SUV craze of the 1990s and 2000s, consumers are opting again for fuel-efficient cars. Seven of the top 10 vehicles of 2010 were fuel-efficient models, including the Toyota Camry, the Honda Civic, and the Ford Fusion.
* Car ownership is declining. In 2009, 14 million more people sold cars than bought them — the first decline in car ownership on record. U.S. passenger miles driven appear to have peaked in 2007. The bad economy surely explains much of this flattening. People out of work don't need to commute. But there has also been an apparent shift in style and sensibility. The car-sharing service Zipcar now boasts more than 500,000 subscribers: Urbanites who choose fractional ownership as their response to the $7,000 per year average cost of owning and operating a car.
* Consumers are accepting smaller homes in order to gain shorter commuting times. In 2006, when gasoline prices broke past $3 a gallon, a survey for the National Association of Realtors found that "proximity to work" had surged to the number-one consideration among home buyers. The average size of a new American house has dropped by almost 170 square feet since 2006, according to the National Association of Homebuilders. The trend toward downtown living is being remarked by brokers not only in older cities, but in places like Tampa, Florida; Davenport, Iowa; and Louisville, Kentucky.
All these trends started before the recession. Some — like the trend to downtown living — even predate the rise in energy prices of the 2000s. One factor may be explained by the emerging field of happiness research: Setting aside shocks like divorce and bereavement, the single most powerful predictor of unhappiness in American lives is length of commute.
So here's a suggestion for candidate Huntsman. His big economic plan promises reductions in income and capital gains taxes, a reduction in the debt, and a move away from reliance on oil. Here's one idea that can help him realize all three goals at once:
Set a national goal to reduce oil use back below its 1995 level. That's not a heroic change, and it can be encouraged by announcing a standby tax on oil, to go into effect if and when the price of oil falls below a pre-set level: say, $75 a barrel. The proceeds from such a tax, if triggered, can be used to offset the increase in the deficit resulting from Huntsman's tax cut pledge. Meanwhile, the knowledge that oil prices will remain high will assure Americans: Today's decisions in favor of efficiency won't feel wasted tomorrow.
Jon Huntsman has grasped something that too often eludes policymakers: Reducing oil use is simultaneously good for the environment, good for national security, good for the long-run growth of the U.S. economy and — to the extent that it shortens commutes — good for individual human happiness. Win, win, win, win.