Petroleum Bomb

I'm at a conference, so today's posting will be brief. Former Secretary of State George Schultz and former CIA Director James Woolsey have put out a clearly-articulated op-ed on the need to reduce our dependence on oil from the Middle East. It's worth reading, particularly since it anchors one end of the Geo-Green alliance that I've mentioned in a number of previous postings. Unfortunately, the crucial element missing from this article is the time required for the strategies these gentlemen propose to have a meaningful impact on world oil markets. There are no quick fixes to these problems.

Relying on the penetration of efficient cars into the vehicle fleet, and the development of new technology for producing biofuels more efficiently than crop-based processes can deliver, the proposed transition would take more than a decade to put a real dent in our oil demand, particularly if it did not include measures to reverse the existing trend in increasing vehicle miles driven. Europe's shift to diesel, discussed here last week, provides a baseline for comparison; it took more than a decade for diesel cars to reach 50% of new car sales, and with the slow fleet turnover rate, it will be some time before they account for half of all cars in the EU.

I am not saying that Messrs. Shultz and Woolsey's idea shouldn't be tried, but in practice this strategy would not achieve its desired geopolitical impact until well into the next decade or beyond.