Energy Truths

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Energy Truths

By: Pete Geddes
Posted on June 27, 2007 FREE Insights Topics:

Most Americans are conflicted and inconsistent regarding their energy preferences and priorities. They tell pollsters they want to stop global warming and reduce dependence on foreign oil. Yet they squeal bitterly when energy costs rise, balk at views spoiled by wind farms, are leery of nuclear power (the only alternative that can really make a difference), and cringe at the thought of offshore oil development.

Why don’t our political leaders explain why we can’t have it all? Because they lack the courage. They don’t understand, or are too weak to tell us, that there are no cost-free solutions. If we expect them to hold an honest discussion about energy tradeoffs, we are like those entering a fourth marriage—hopes triumph over experience. Instead, expect our politicians to offer “solutions” that are both complex and ineffective. One pundit observed, “S. 1419 [the current energy bill] is so counterproductive it would need substantial improvements just to be ineffective.”

Here’s a great truth they won’t tell: the only way to curb demand for gasoline is to make its consumption more expensive. Politicians know this is politically costly. So instead, they dodge and weave, blaming “big oil” and pretending ethanol is a serious alternative fuel, rather than a sop to mid-west corn growers and the politicians they rent.

It’s easy to understand why they take this approach—it insulates them from the wrath of their constituents. As a result, we get policies that sabotage stated goals. The latest effort to increase automobile mileage standards is but one example.

I celebrate energy efficiency. Not only is it more elegant, it reduces waste. But increasing the distance a car goes on a gallon of gas will not decrease fuel consumption. This is counterintuitive, but true. The National Research Council of the National Academy of Sciences explained that, “[fuel economy standards] reduce the fuel cost per mile of driving, thereby encouraging faster growth in vehicle travel….”

Since fuel economy standards were introduced, U.S. consumption of imported oil has increased from 35 to nearly 60 percent today. (It’s startling to recognize that Canada and Mexico are our largest suppliers of oil. Only about 12 percent of U.S. imports come from the Persian Gulf.)

Pollution from cars increases with the number of miles driven. Since fuel-efficient cars are cheaper to drive, people drive them more. Thus, we’ll likely see a rise in both traffic congestion and fine particle pollution, especially in urban areas.

Mandates, whether for fuel economy or ethanol production, provide information and incentives upon which people will act. For example, the original fuel economy law is responsible for the rise in popularity of gas-guzzling SUVs. In order to meet corporate average fuel economy (CAFE) rules, U.S. carmakers made their vehicles smaller and lighter. This led to the extinction of the family station wagon. (Remember them?) But big families didn't go away, nor did their desire for vehicles that carry lots of people and stuff, soccer teams for example.

In 1984, Chrysler exploited a loophole in CAFE and introduced the “minivan.” Because it was regarded as a light truck, it had a lower fuel standard than a car. At the time, this seemed insignificant because light trucks only made up a small percentage of the vehicle fleet. However, today SUVs and light trucks account for nearly half of all U.S. auto sales.

Consumers have revealed their preference for large vehicles. A Geo Metro gets over 40 highway miles per gallon. Despite this, none of my friends own one. Not even those without kids. (It was discontinued in 2001.) Today, consumers can pick from ten cars that get over 30 miles per gallon. I don’t know anyone who owns any of them either.

Here’s something else to celebrate. Over the last 50 years, U.S. per capita energy consumption has increased, while energy consumption per dollar of GDP has decreased. Since efficiency reduces the cost of operating everything from jet engines to Jacuzzis, energy demand grows. As we save energy in one area we tend to use it somewhere else. The historical record is so clear and compelling, I wonder why anyone but politicians dispute it.

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