Reform Required to Halt Wide Spectrum of Woes

Posted April 20, 2008 at 11:00pm

Revolutionary changes in U.S. energy policy are required if we are to avoid multiple hazards that could threaten our living standards, undermine U.S. foreign policy goals and leave us extraordinarily vulnerable to economic and political disasters.

We maintain a massive military presence overseas, partly to preserve our oil lifeline. One conservative estimate puts U.S. oil- dedicated military expenditures in the Middle East at $50 billion per

year. But there is no guarantee that even our unrivaled military forces can prevent an energy disaster. We have lost leverage on the international stage and are exacerbating the problem daily by participating in an enormous wealth transfer to authoritarian nations that happen to possess the commodity that our economy can least do without.

Complicating our efforts is the International Energy Agency’s prediction that global energy demand will increase 50 percent by 2030. Some oil industry insiders are skeptical that meeting the demand for the projected 116 million barrels of oil per day will even be possible. Three-quarters of the new energy demand will be in the developing world, with 45 percent coming from China and India alone. Eighty-four percent of the demand growth projected by the IEA is expected to come from fossil fuels (again, predominantly in emerging economies), translating into a 57 percent increase in carbon dioxide emissions.

Put bluntly, people serious about U.S. national security and people serious about climate change have to be serious about a new energy policy for America.

These challenges are not insurmountable. But it is unlikely that we can address them within the prevailing political mindset that has proven to be incapable of more than incremental action on energy security. The December 2007 energy bill made some progress. In fact, Corporate Average Fuel Economy reform and an expanded renewable fuels standard are two goals that I have long supported. But those are small steps compared to the challenges before us. Mass deployment of new technologies — such as plug-in hybrid E85 vehicles and advanced biofuels from specialty energy crops, municipal waste and crop residue — will make the 35 miles per gallon of gasoline goal look archaic. The development and deployment of new technologies and sources of energy will require both research support and public policy to shape markets.

Our current energy position is intolerable for a superpower, and suppressing partisan divisions is necessary to developing a credible energy security agenda. Such an agenda requires dogged devotion to solving specific energy deficiencies and not just pursuing an ill-defined state of “energy independence.” Most importantly, it requires tremendous leadership from the next president.

Three factors lead me to the conclusion that energy is the most vital topic of this presidential election. First, energy is the issue with the widest gulf between what is required to make our nation secure and what is likely to be achieved through the inertia of existing programs and Congressional proposals.

Congress and private enterprise can make evolutionary energy advancements, but revolutionary national progress in the energy field probably is dependent on presidential action. Our energy dependence is perpetuated by a lack of national will and focus. Only the president has the visibility to elevate a cause to national status, and only the president can leverage the buying power, regulatory authority and legislative leadership of an administration behind solving a problem that is highly conducive to political procrastination and partisanship.

Second, transformational energy policies are likely to be a requirement for achieving our economic and social aspirations here at home. Our ability to address Social Security, health care, education and overall budget problems will be heavily encumbered if we do not mitigate our energy import bills. Many of the most severe recession scenarios involve sustained energy disruptions because of terrorism, war, embargo or natural disaster. Any plan to turn around a recession will be encumbered by the constant flow of dollars from Americans’ pockets to oil producers overseas.

Third, energy is the underlying condition that exacerbates most major foreign policy issues. We pressure Sudan to stop genocide in Darfur, but the Sudanese government is insulated by oil supply relationships. We pressure Iran to stop its uranium enrichment activities, yet key nations are hesitant to endanger their access to Iran’s oil and natural gas. We try to foster global respect for civil society and human rights, yet oil revenues flowing to authoritarian governments are often diverted to corrupt or repressive purposes. We fight terrorism, yet some of the hundreds of billions of dollars we spend each year on oil imports are diverted to terrorists. We seek options that would allow for military disengagement in Iraq and the wider Middle East, yet our way of life depends on a steady stream of oil from that region.

Vigorous energy diplomacy of the type that only a committed president can ensure is required around the world. A top priority in our relations with China and India should be working with them to avoid replicating U.S. dependence on oil and conventional coal usage. As countries from Indonesia to Egypt to Chile are considering new nuclear power programs, leadership is needed to meet risks that enrichment technology might proliferate. Management of energy relations with Russia will remain difficult for our NATO allies, as we saw again at the summit in Bucharest, Romania. And any strategy for resolving the situations in Iraq and Iran must include a plan for stability of Persian Gulf oil supplies.

We must be very clear that energy security is a political problem. The United States has the financial resources, scientific prowess, productive land and industrial infrastructure to address our energy vulnerability. The question is whether we will heed abundant warning signs and apply the political will to deal with this problem in the present rather than suffering grave consequences in the future.

Sen. Dick Lugar (R-Ind.) is a member of the Agriculture, Nutrition and Forestry Committee.