Oil: Who Needs It?

They're Laughing at us. The OPEC countries are laughing up their collective sleeve because they're suckering us and they know it. They ought to be laughing. We don't need their oil. We never did.

Oil was always only a means to an end, one of several possible means. The end was to move ourselves around conveniently and to make our homes and offices comfortable. We used to move ourselves around on horses and in trains. We used to make ourselves comfortable with wood and coal. Oil was easy, so we switched.

Oil's not easy anymore. Last year, we paid out 42 billion dollars for foreign oil. The price goes up. OPEC can cut off the supply whenever it wants. Foreign oil is expensive, inflationary and politically and strategically risky. Sooner rather than later, it's going to run out.

The end hasn't changed. We still want to move ourselves around and to be comfortable. But it's time and past time we switched the means again, away from oil.

Nothing more convincingly demonstrates the bankruptcy of Federal energy policy under at least the past three Presidents--Nixon, Ford and Carter--than our continuing increasing dependence on foreign oil. Nothing more convincingly demonstrates the cowardice and corruption of Congress, its capitulation to the lobbying of Big Oil. If we had started to switch from oil to other liquid fuels at the time of the 1973 Arab oil embargo, we wouldn't be facing potential gasoline shortages now. Instead, domestic oil production has actually declined since the embargo. Remember that the next time you go down to the polls to vote. Energy policy in the United States in the past decade has been a crying shame, if not an outright scandal.

But we can still save the day. It's not too late if we get in gear. The immediate answer is technical fixes, the long-term answer renewable sources of fuel. Technical fixes are ways to improve efficiency that don't change lifestyles. Everybody in the U. S. could start riding bicycles to work, for example, and that would solve most of the oil problem, but most of us don't want to ride bicycles to work. A reasonable alternative, a technical fix, has been to pass laws requiring cars to become more fuel-efficient. A long-term solution must be to find renewable fuels to replace gasoline for running our cars.

Renewable resources--sunlight, wind, garbage and manure, woody materials, to name the most important--have received only token attention from the Department of Energy and from the energy industry. They're what the high-technology fanatics like to call unconventional alternatives. The implication is that they're inadequate and impractical. Don't be fooled. They're completely conventional. They're even ordinary and homely, the common sources of mankind's energy for at least the past 10,000 years. The truly unconventional alternatives are the monstrous, untested inventions that the high-technology fanatics are touting: gasoline from oil shale or coal, both processes fiercely expensive and enormously wasteful of energy; island after three-mile island of nuclear reactors to make electricity we don't need and to waste capital we ought to be investing in plants to make liquid fuels; or such absurdities as giant satellites to collect sunlight and beam it to earth as microwaves, the beam frying every passing bird. Crazy stuff, and unaffordable as well, and unforgiving. Suppose, for example, that the U. S. had gone nuclear as the nuclear-power industry dreamed it would. Suppose in the year 2000 A.D. there were 1000 giant nuclear-power reactors on the land supplying almost all our electricity. Suppose then an accident only a little worse than the accident last March at Three Mile Island in Pennsylvania. What would we do? We'd be stuck, wouldn't we? You see: unforgiving.

We don't need the high-technology solution. (continued on page 212) Who Needs Oil (continued from page 172) We've got better options, options that are cheaper, simpler, more diverse--options that are dispersed, domestic and safe, are renewable forever and that we can get to faster.

Here's how we make the break from Arab oil.

1. Immediately, we crash-program development of gasohol from grain and subsidize its production so that its price undercuts unleaded gasoline at the pump.

Gasohol is a mixture of gasoline and alcohol. The usual mix is ten percent alcohol--commonly grain alcohol, ethanol--and 90 percent gasoline. You can buy gasohol at Midwestern filling stations today. It burns better than unleaded gasoline and any car can run on it without modification. According to Dr. William A. Scheller, professor of chemical engineering at the University of Nebraska and a recognized authority on gasohol, we could fairly quickly convert about 40 percent of U. S. gasoline consumption to gasohol. We'd have to build big new distilleries. We'd grow fuel grains--corn, milo, whatever--on farmland the U. S. Department of Agriculture presently requires farmers to leave unplanted if they want to qualify for Federal price supports on the grains they grow for food. We'd also start using up some of our huge grain surplus, about one twelfth of it each year. If we did those things, we could cut down on our oil imports by half a million barrels a day--about as much as the Iranian shortfall. Gasohol on this modest but quickly achievable scale would improve our balance of payments by about three billion dollars a year. Investment would be a one-time four billion dollars.

2. While rushing to gasohol, we go all out to build a massive industry for the production of fuel ethanol from woody materials and wood. (Woody materials include cornstalks and straw, waste biomass today.) Such an industry would require facilities perhaps 14 times as extensive as our present beer-and-wine industry--well within the range of possibility, especially since fueling all U. S. automobiles with ethanol would allow us to shut down permanently half of our oil refineries.

Ethanol from wood isn't quite commercially feasible. Process efficiency needs improving. The Department of Energy, dulled to the point of severe retardation by its bias toward high-technology mega-gadgets, hasn't seen fit to invest more than a pittance in development of this ever-renewable option. The Germans ran their war machine on gasohol and alcohol during the Second World War, and two of their plants stayed competitive until low-cost Arabian oil shut them down in 1958. Brazil, which has no oil to speak of, is moving rapidly toward an all-ethanol economy. So should we. We need our oil for petrochemicals.

3. While we're developing ethanol, we should also be developing automobiles adapted to burning it. It's pure 106octane alcohol and it's far less polluting than gasoline. An alcohol-fueled car needs a preheater and a carburetor with different-sized jets. For full efficiency, it needs a higher-compression engine to take advantage of the higher octane of the fuel. You can retrofit an existing Detroit engine for alcohol, but it won't get as many miles per gallon as it would with higher compression. Ethanol could phase in just as unleaded gasoline is phasing in, new cars beside old. When we're fully converted, we'll have a liquid-fuel source that is perpetually renewable, a fleet of cars at least as fuel-efficient as today's, a nation of prosperous, happy farmers and a vastly reduced demand for foreign oil. Thirty-one percent of U. S. energy today goes to vehicles.

4. This step involves potential lifestyle changes, but many of us would probably find them to be changes for the better: We Federally fund low-cost--possibly even free--mass-transit systems for all major U. S. cities and restore full-scale, clean, prompt, efficient, low-cost, Federally subsidized railroad passenger service.

The point is to give people alternatives to private automobiles and to improve transportation efficiency. Under 500 miles, starting and finishing as they do from stations within central cities, trains are probably faster in most cases (counting airport-travel time) than airplanes. If they were clean, efficient and available, people would probably use them, especially if they knew they'd find convenient mass transit at the other end. People might use mass-transit systems more extensively for daily commuting to and from work if such systems were low-cost or free; they could still drive their cars for shopping and for pleasure. Aircraft serve best for long-distance travel.

5. We're also dependent on foreign oil because we use it to heat homes and offices, a use that is not only expensive but absurdly inefficient. To end this dependency, we go directly solar. If every new home built in the United States in the next 12 years were designed for passive solar heating, we would save almost as much energy as we expect to recover from Alaska's North Slope. Passive solar heating is designed into a home. It's sophisticated, but it's simple--glass walls on southern exposures and some intelligent ductwork inside. We ought to program for passive solar with generous tax credits or even direct subsidies. It ought to be cheaper to build solar than to build fossil-fuel-heated. In the long run, it will be, anyway--for all of us.

Most oil-heated homes are existing older homes located in the northeastern United States. It would be prohibitively expensive to convert them to passive solar heating, but they could be converted to active solar heating by retrofitting rooftop collection systems. They ought to be, massively, the conversion funded by tax credits or direct subsidies.

6. Every building in the United States ought to be properly insulated and sealed. Tax credits already on the books encourage this obvious and painless conservation measure, but they're inadequate. They ought to cover a larger share of the cost. Utilities should be required to bank-roll the homeowner's insulation investment. They'd see a better return on their capital if they did, and they'd be too profitably tied up in home-insulation loans to invest in any more unneeded nuclear-power reactors.

7. A Federal task force should begin immediately to identify every Federal, state, county and city law and ordinance that might bar or inhibit the development of soft-energy alternatives. Access to sunlight should be guaranteed; plumbing and building codes keyed to fossil-fuel construction modes should be changed.

8. You're probably wondering how we'll pay for all these programs. One immediate source of tax income should be the repeal of the foreign-oil tax credit, which gives oil companies dollar-for-dollar credit on their U. S. income tax for money they pay to foreign governments for the right to extract oil. This dinosaur tax loophole was installed in the mid-Fifties when the U. S. State Department wanted to win the loyalty of the new oil nations of the Middle East. Over the years, it has cost the U. S. Treasury some 15 billion dollars. It has been responsible in part for the decline in U. S. domestic oil production.

9. But the most important source of funds should be a new kind of tax. Not the oil and gas deregulation and windfall-profits-tax mechanism that Jimmy Carter proposed last April. That mechanism gives the profits from oil-price increases to the oil companies and then tries to snatch half of them back with a loophole-ridden windfall-profits tax. Rather than so indirect and easily jimmied a mechanism, the American people should demand, and Congress should shake off its cowardice long enough to pass, a direct replacement-value tax on fossil fuels, a sort of oil-depletion allowance in reverse, that would slowly increase the cost of depletable fuels such as oil and natural gas to the ultimate cost of their replacement. If it will cost $40 a barrel, say, to extract oil from oil shale, then the oil we pump right now ought to cost some increasing fraction of that amount as it depletes, or we're kidding ourselves.

A tax on fossil fuels will increase the cost of gasoline at the pump and of fuel oil and natural gas at the supplier. Some oppose any such increases on the grounds that the poor can't afford them. The argument is well meant but misguided. The primary cause of inflation in recent years has been the increasing cost of oil. Inflation robs the poor far more insidiously than a graduated tax would, and without any recompense in the form of tax rebates or progress in developing steady-state, renewable alternative energy sources. A tax would cost no more than inflation has cost. It would slow and eventually even halt inflation; in the long run, it would unquestionably cost less. The champions of the poor should champion it.

The return from a replacement-value tax would pay for all the programs we've planned in points one through seven and many more besides. It would also allow adjustments to ease the burden on the poor of increasing energy prices. We wouldn't be paying any less for energy in the short run, but when we were through with our conversions, we'd still have our oil, we'd no longer need foreign oil, the money would have been plowed back into the American economy, into American jobs and American investments, and we could tell OPEC to get lost.

10. The final point, crucial to all the others, is the removal from office of U. S. Energy Secretary James R. Schlesinger, the man who told the Mexicans to keep their natural gas and the man who said that the nuclear accident at Three Mile Island in Pennsylvania last March just showed how safe nuclear power had been. Schlesinger, a pipe-smoking Harvard Phi Beta Kappa of truly monumental ego, is a good example of the diehard high-technologists who have misled U. S. energy policy nearly to ruin. They mean to see us go hard and high, even if it bankrupts and ruins us, which it would. We can't afford them. They need to be rooted out of government before they bollix up the works any worse than they already have.

These ten steps are only a beginning. There's much more that we could do to improve our energy future with technical fixes and alternative energy sources. If we were only as efficient as the Swedes, we would use one third less energy than we do. With technical fixes, we could nearly double our efficiency in the next 20 years. With renewable fuels, we could sustain ourselves through the centuries.

The most intelligent single book about energy matters written in the 20th Century is Amory B. Lovins' Soft Energy Paths. If you haven't read it, you should. Lovins is a brilliant young American physicist and international energy consultant. He writes:

So great is the scope for technical fixes now that the U. S. could spend several hundred billion dollars on them initially, plus several hundred million dollars per day--and still save money compared with increasing the supply! And one would still have the fuel (without the environmental and geopolitical problems of getting and using it). The barriers to far more efficient use of energy are not technical, nor in any fundamental sense economic. So why do we stand here, confronted, as Pogo said, by insurmountable opportunities?

Why, indeed? Ask your President. Ask your Senators and your Congressmen. Kiss off, OPEC! Take that, Big Oil!

"We could cut oil imports by half a million barrels a day--about as much as the Iranian shortfall."