Friday, January 20, 2006

The New Sputnik

Tom Friedman of the New York Times is widely regarded as one of our most astute observers of global trends, a view I share. In today's op-ed (subscription required) he suggests that Iran's nuclear threat, climate change, and the shrinking of Detroit's auto industry are all aspects of a multi-faceted wake-up call to America--the Sputnik of our era--and all share energy as a common denominator. I agree. Our response to these challenges will largely determine our future success and prosperity as a nation. Unfortunately, I'm skeptical about his prescription that all this can be addressed by a gasoline tax fixing the price of the fuel between $3.50 and $4.00 per gallon, regardless of fluctuations in global oil prices.

Toyota has received a lot of media coverage recently for its past success and the prospect that it could overtake GM as the world's largest auto maker this year. Some commentators have cited Toyota as the best American carmaker, with US auto plants every bit as good as those in Yokohama or elsewhere. This year Toyota will roll out its newest Camry, the best-selling car in America, and one of its versions will be a hybrid estimated to get 43 miles per gallon. If Toyota thought US buyers wanted them, they have the technology and wherewithal to make every Camry a hybrid within a few years. I know Ford takes this possibility seriously, but I'm not sure that GM or Daimler-Chrysler do.

However tempting they might be as a way to nudge us in this direction, gasoline taxes can't substitute for informed consumers who value energy efficiency at least as highly as they do power windows and cupholders. It's worth reminding ourselves that decades of extremely high fuel taxes have not freed Europe, where gasoline currently sells for $5-6 dollars per gallon, from dependence on Middle East oil.

Advanced technology and alternative energy sources, including biofuels, wind, solar and clean coal, hold great potential for shrinking our need for oil in the future. But we will burn a lot more barrels of oil and a lot more cubic feet of natural gas before those alternatives can grow enough to become entrees, rather than mere appetizers in our 100 quadrillion BTU per year energy menu. Getting to that point will require all of our discovered-but-off-limits natural gas reserves and the Alaskan gas pipeline and LNG and Canadian tar sands and--in my view--ANWR's oil, in addition to clearing away the NIMBY obstacles that block many of these as much as they do the wider development of wind and solar power.

Meanwhile I hope Mr. Friedman will continue to remind us that many of our worries--high oil prices, Islamic extremism, increasingly unpredictable weather, and our trade deficit--are truly connected. We have more control over these factors than we give ourselves credit for, not at the ballot box, but in the choices we make as consumers every day.

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