WHAT MATTERS WEBLOG

Currently I’m working on a research paper with the title “On the Threshold to a New Energy Age - America’s shift towards renewable energy as a consequence of the energy crisis and climate change” and as part of my research, I conducted a poll to find out how prepared people are for the New Energy Economy.

I handed out questionnaires in Singapore, Tokyo, Lisbon, New York City and Honolulu. On one of the questionnaires I had distributed in Honolulu, I found a few interesting comments.

To question #14 (Oil is….?), the respondent did not tick one of the three answer choices (expensive, cheap, neither) but wrote on the side:

Oil is....

I couldn’t agree more. What is important to understand is that we’re not paying an honest price for oil / gasoline. The nominal price of a gallon of gasoline in dollars or of a barrel of crude does not include the cost of the military and intelligence efforts to secure our access to oil reserves and protect ourselves from the dangerous consequences of American petrodollars funding radicalism and potentates around the world. The cost of dealing with the consequences of climate change - which are unpredictable at this point but potentially devastating - is not included either.

The United States of America in particular and generally most industrialized countries are paying a high price for consuming huge quantities of fossil fuels. According to my calculations (-> it’s time to become energy independent, overhaul the entire economy and infrastructure), the United States must have spent more than $ 700 billion on fossil fuel imports in 2008 alone. In addition, the U.S. is very vulnerable when it comes to disruptions of oil supplies. As you can read in my previous post (-> on the unequal consumption of oil & the resulting risks), Iran could easily block the Strait of Hormuz, a very narrow seaway through which roughly 40% of seaborne oil shipments pass every day, and destroy oil production facilities in several oil-rich Persian Gulf countries - including the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Bahrain and Iraq. I’m not saying this is going to happen or likely to happen, but it is a possible scenario which puts the United States in a strategically disadvantageous position.

Whether you’re concerned about global warming, the health of the economy or national security, you will agree that it should be a number one priority for the U.S. to reduce its oil consumption and thereby ween itself from its dependence on Middle Eastern Oil, spend the money rather on domestic energy generation and keep carbon dioxide emissions from rising.

Much of this can be achieved through increased energy efficiency - the so-called “fifth fuel” after coal, oil, gas and uranium. 

Higher energy efficiency can only be achieved with higher compulsory standards for buildings and cars. Requiring U.S. auto makers to develop automobiles with better fuel economy will not only increase their products’ competitiveness but help decrease demand for foreign oil.

If efficiency standards were increased drastically and policies implemented to make oil reflect its true cost, the economic benefits over the long and medium term as well as the environmental and security benefits were undeniable.

This entry was posted on Saturday, January 9th, 2010 at 3:40 PM and is filed under Economy, Electric Cars & Auto Industry, Energy, Environment, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.