The Nation with the (Black) Golden Arm

So apparently we're addicted to oil and the solution is to eat more corn or grass or something. Old Georgie made a toothless call to eliminate our reliance on oil in the SOTU and hopes no one realizes how empty the promise is. Mere words are not policy, that requires action to compel the forces involved. In this case more extreme actions than asking pretty please will be needed to change the American auto industry's focus on the immediate future to the long term.

This is something I've been saying for years: since fossil fuels are a finite resource, now is the time to develop the next generation of energy production. When we get to the point where oil cannot fuel our economy, we better have improved our technology to the point where we won't even notice it's no longer there. Getting to that level of technology takes a hell of a lot r & d and whichever nation can accomplish it first is going to be in a position of power. That said, the US transportation industries should devote more of its resources to becoming leaders in alternative fuel technology in order to reclaim its position as leaders in the worldwide industry.

Given the relative gas prices due to direct taxes and income differences, Europe and Asia have more incentive to develop this sort of stuff before us. While we drive our SUVs around the corner to get a loaf of bread, they are driving smaller little cars when necessary and walking, taking mass transit or whatever when possible. They are the ones who are taxing petroleum use to create a demand for more efficient engines. They are the ones who will beat us to it unless we create incentives for our industries to change. Given Exxon Mobil's record profits and their cozy relations with Detroit, we are in deep doo doo.

I wrote a version of this in an opinion paper about 5 years ago when the Kyoto Protocol was the big issue of the day. Some snooty business type(it was published by a biz school student paper) wrote back that I didn't know what I was talking about, and that it's not practical due to economics, markets, blah blah blah. He tried to pass me off as some tree hugging opponent of business. He had was thinking short term, I was talking long term. Which nicely demonstrated my point, the people who are in a position to initiate this sort of development are looking at either their bottom line for the next few years or at the next election cycle.

The best thing to happen to the US auto industry was the energy crisis of the 70's when oil shortages compelled the development of more fuel efficient engines, more practical cars and a general awareness of the finite nature of petroleum. At first it sucked--the cars were very small and kinda crappy compared to the boats and muscle cars we were used to. eventually, the technology caught up and we were driving large, comfortable vehicles that were faster and more powerful as the pre-crisis models but twice as efficient. We had developed technology to maintain our standards of comfort and performance. Then we got complacent, mileage improvements hit a peak and the average national mpg declined as development of mileage imporvements gave way to giving soccer moms more room and power than they'll ever need. We had forgotten that there may not always be a cheap, plentiful supply of gas. It took 9/11, Iraq and 60 bucks a barrel to open our eyes again.

Which brings us back to the SOTU. George did good to mention the problem but it was little more than a headfake. Without real incentives to change, we won't. Without the Federal gov't providing those incentives or worse, a new energy crisis driven by external factors, we're going to continue cranking the heat up to the mid 70's, driving stupidly large cars and sooner or later we'll find ourselves a has-been world power.