The open secret is that most Americans still can afford to fill their tanks. At current prices, it costs a typical driver just $430 more a year to travel 15,000 miles, compared with the price 12 months ago, says Jim Kliesch of the American Council for an Energy-Efficient Economy. Light-truck and SUV drivers pay $584 more. New surveys say that it might take $4 gas to get people to change their driving habits much. And even that won’t have much impact on the looming fuel crisis.
At bottom, the oil story is pretty simple. The world is swilling petroleum faster than new fields are being discovered. For now, enough is still being pumped to meet the growth in demand–but just barely. The United States can drain Alaska dry and dot the ocean with oil rigs, but we can’t drill our way out of this global hole. Production is declining in most of the countries outside the OPEC cartel, even with new sources such as Canadian tar sands. At some point–perhaps in the next few years–OPEC will also be pumping at diminishing rates. “There may be a limit to supply,” U.S. Energy Secretary Samuel Bodman told an international forum last month. “There is a perception of concern about what’s going to happen in the future.”
I’ll say. The world relies on liquid fuels to carry food to markets, heat homes, power national defense, ferry workers to jobs and move families through their lives. When shortages develop, prices rise–hurting personal budgets and the national balance of payments, too. There’s no reason to think we’ve seen the worst.
To protect ourselves and our economy, the order of business should be: sound a national call for conservation, invest heavily in energy efficiency, drill for any oil we’ve got and embark on crash programs (with tax incentives) to manufacture petroleum alternatives on a large scale.
But we’ve been mostly diddling around. The private investment going into new energy sources is baby stuff compared with the spending on oil. The government upped its research grants and loans for energy alternatives, but not for conservation, where results come fast. President George W. Bush’s 2007 budget cuts spending on projects to improve energy efficiency, BusinessWeek reports. Gasoline taxes are off the table, politically.
Individuals can cut costs a bit. Tighten up your house to lower your bills for oil or natural gas (your local utility might offer free “energy audits” that show you how). Telecommute for part of the workweek. Do the week’s errands all at once.
When buying your next car, put fuel efficiency first. Already, sales of large SUVs are on the decline in favor of smaller ones that get more miles per gallon. You might make your second car a high-mileage, four-cylinder sedan and use it as often as you can. When you drive, don’t speed. The Department of Energy says that each 5 miles per hour you drive over 60 is like paying an extra 20 cents per gallon of gas.
Among pricier cars, hybrids are getting a bit more attention (they run partly on electricity generated by the engine). Hybrids come with a tax credit ranging from $1,150 to $3,150. The credit phases out, however, as a company’s sales rise. Toyota’s cars are so popular that, starting Oct. 1, it can offer customers only half the credit. You’ll get the full amount, however, from Honda and Ford.
Another option is diesel cars, which get 20 to 30 percent more miles to the gallon, according to the research firm J.D. Power. Americans haven’t liked them much, not to mention their sulfurous emissions. By October, however, diesel fuel will have to meet stringent new clean-air rules. In 2007, models with clean-burning European engines will start cropping up–although, like hybrids, they’ll cost more.
Choosing biofuels may be good for the atmosphere but won’t necessarily reduce the nation’s petroleum use. Tax-subsidized ethanol is produced from corn; biodiesel comes principally from soybeans. Depending on which expert you consult, biofuels either (1) take much more petroleum to produce and transport than they save or (2) save a little energy but not a lot. They’re not a way out of the oil hole. In fact, they may dig us in deeper.
If not ethanol, what? Today, the only practical, large-scale source of fuel is coal, says David Pimentel, an agricultural expert at Cornell University (the tight natural-gas supply has to be saved for electricity and heat). The process of turning coal into oil pours carbon dioxide into the air, making global warming worse. Technology exists to strip off the carbon and sell or bury it, says Andrew Weissman of FTI Consulting. “We could solve the problem,” he says. “The issue is the will to act.” On July 4, we smiled and drove away.
