In the keynote address to the Richard G. Lugar-Purdue University Summit on Energy Security, at Purdue University, US Senate Foreign Relations Committee Chairman Dick Lugar (R-IN) called for a set of immediate actions to address US transportation energy vulnerability, including flex-fuel capability in all new light-duty vehicles, accelerated investment in cellulosic ethanol and the institution of more aggressive fuel economy standards.
Lugar asserted that none of the major stakeholders—the oil companies, the car companies, the Federal government, and US consumers—are taking the necessary, substantive actions to address what he calls a national security emergency.
Neither American oil companies, nor American car companies have shown an inclination to dramatically transform their businesses in ways that will achieve the degree of change we need to address a national security emergency. Most importantly, the Federal Government is not treating energy vulnerability as a crisis, despite an increase in energy related proposals.
...Unfortunately, although many Americans are embracing the idea of changing our energy destiny, they have not committed themselves to the action steps required to achieve an alternative future. This is an important distinction, because although national acceptance that there is a problem is a necessary condition for solving the problem, it does not guarantee that the problem will be solved.
In fact, advancements in American energy security have been painfully slow during 2006, and political leadership has been defensive, rather than pro-active. One can point with appreciation to a few positive trends...but these are small steps forward in the context of our larger vulnerability.
If our economy is crippled by an oil embargo, if terrorists succeed in disrupting our oil lifeline, or if we slide into a war because oil wealth has emboldened anti-American regimes, it will not matter that before disaster struck, the American public and its leaders gained a new sense of realism about our vulnerability. It will not matter that we were producing marginally more ethanol than before or that consumers are more willing to consider hybrids and other alternative vehicles.
Not all indices and measures of energy progress are even moving in the right direction. The American people are angered by $3.00 gasoline, but they are still buying it in record quantities.
Lugar described the energy dilemma in terms of six threats to national security:
The vulnerability of oil supply to natural disasters, wars, and terrorist attacks.
The increasing tightness of supplies and the associated rising cost of oil and natural gas as global consumption increases. “As we approach the point where the world’s oil-hungry economies are competing for insufficient supplies of energy, oil will become an even stronger magnet for conflict.”
The use of energy supplies as a economic weapon by adversarial regimes.
The transfer of energy payments to “some of the least accountable regimes in the world.”
The exacerbation of the threat of climate change, “made worse by inefficient and unclean use of non-renewable energy. In the long run this could bring drought, famine, disease, and mass migration, all of which could lead to conflict and instability.”
The burden of rising energy costs on developing nations, “with negative consequences for stability, development, disease eradication, and terrorism.”
Despite a growing awareness of the scope of the problem, and the shift to a “new energy realism”, far from enough is being done by any of the major actors involved, according to Lugar. Conflicting interests tend to cancel out meaningful progress.
Breaking through a political logjam often requires a crisis that focuses the nation in a way that achieves a consensus. But consider that the combination of September 11, 2001, the war in Iraq, the conflict on the Israeli-Lebanese border, the nuclear standoffs with Iran and North Korea, the Katrina and Rita hurricanes, sustained $3.00 per gallon gasoline, and several other severe problems have not created a consensus on energy policy.
This leads one to the sobering conclusion that a disaster capable of sufficiently energizing public opinion and our political structures will have to be something worse than the collective maladies I just mentioned—perhaps extreme enough to push the price of oil to triple digits and set in motion a worldwide economic downturn. None of us want to experience this or any of the nightmare scenarios that await us. It is time to summon the political will to overcome the energy stalemate.
Lugar outlined a national program that would include:
Making virtually every new car sold in the US a flex-fuel vehicle;
Ensuring that at least 25% of filling stations in the US have E85 pumps;
Expanding ethanol production to 100 billion gallons per year by 2025;
Creating an approximate $45 per barrel price floor on oil through a variable ethanol tax credit to ensure that investments keep flowing to alternatives; and
Enacting stricter vehicle mileage standards.
To break oil’s monopoly on American roads, some experts favor a giant leap in technology to hydrogen. But that will require new engines, new distribution systems, new production technologies, and is decades away from commercialization. Instead, we can start to break petroleum’s grip right now. The key is making ethanol as important as gasoline in our transportation fuel mix.
While Lugar suggested that initially the Federal government should work with car companies on achieving the goal of equipping all new vehicles with flex-fuel technology, he said that a failure to act should result in a Federal mandate.
...if car manufacturers do not respond with a sufficient plan in a short time period, Congress should mandate that all new autos sold in the United States have flex-fuel capability.
I do not suggest this lightly. But my observations of the post-Katrina response by car companies, oil companies, and consumers is that in the short run, the evolution of market forces won’t be capable of producing the progress that we need to achieve our national security goals, particularly since the car fleet turns over slowly.
Lugar also called for much more aggressive support for the development of cellulosic ethanol.
Far in the future, historians may point to the energy policy of the last several decades as the major national security failing of the American government in this era. In the absence of decisive policy changes, historians will rightly ask how the wealthiest and most powerful nation on earth with abundant land, a magnificent industrial infrastructure, and the world’s best universities and research institutions simply would not reorient itself over the course of decades despite repeated warning signs. Our failure to act will be all the more unconscionable given that success would bring not only relief from the geopolitical threats of energy-rich regimes, but also restorative economic benefits to our farmers, rural areas, automobile manufacturers, high technology industries, and many others.
We must be very clear that this is a political problem. We now have the financial resources, the industrial might, and the technological prowess to shift our economy away from oil dependence. What we are lacking is coordination and political will. We have made choices, as a society, which have given oil a near monopoly on American transportation. Now we must make a different choice in the interest of American national security and our economic future.
Full text of Lugar Speech at Lugar-Purdue Summit on Energy Security