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May 9, 2005
With gas prices at their highest levels on record and oil company profits soaring, the White House continues to push energy legislation that rewards bad behavior and encourages even more destructive use of fossil fuels. A 2004 analysis by the administration's own Energy Information Administration (EIA) found that the energy bill backed by the administration will actually raise gas prices and increase oil demand nearly 14 percent by 2010. It is time to move forward with a better alternative that reduces demand for oil while creating good, high-paying jobs that can develop the cars and fuels of the future.
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First step: Americans need to recognize that we cannot drill our way to a better energy future. World oil reserves are being used up at three times the rate they are being replaced with new discoveries. According to the International Energy Agency, demand rose faster in 2004 than in any year since 1976 despite $50 per barrel oil prices. The producing countries, especially Saudi Arabia, are investing in upgrades to expand their extraction capacity, but this will take time, during which global demand will continue to rise. Since U.S. oil represents only 2 percent of world reserves, our production capacity provides no oil price leverage in the face of OPEC's overwhelming capacity. While there is no consensus as to when world oil extraction will peak, some investors and governments are beginning to recognize that we can not drill our way to a better future.
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Second step: We must reduce our demand for oil. There are several things we can do right now to reduce our enormous appetite for oil including: new incentives to help low-income families get more fuel efficient cars; increased carsharing efforts in major cities; higher fuel economy standards; expanded "feebates" that reward energy efficient cars and assess fees for gas guzzlers; and increased efforts to shift to new tires that reduce gas usage.
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Long term solution: America must foster innovation in the automobile and transportation sectors and invest in renewable energy sources. Along with efforts to expand new hybrid and hydrogen-based cars, the federal government should invest more in innovative biofuel technology. A broad coalition of business, labor, environmental groups, and farmers has embraced a robust commitment to domestic biofuels research as a cornerstone of reducing our dependence on oil. Conversion of crops and agricultural waste to fuel would provide a double dividend to farmers and boost rural economies, while providing the country with an immediate, domestically sustainable, low-carbon fuel alternative to oil.
Click here to read more about progressive ideas for lowering gas and oil prices.
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