Every president since Richard Nixon has touted energy independence; however, neither presidents nor Congress had the fortitude to require the sacrifices from the American people necessary for a rational energy policy.
Politically, even today, it is not feasible because it would require an energy policy that takes into account all costs for energy, new regulations and taxes that would require a major change for business and consumers.
Business entities always couch their concerns in terms of economics ("the bottom line"), but there are different types of economics: pecuniary (ordinary economics, dollars), social and physical. Social costs (externalities) are those borne by everybody, and they may be negative or positive.
A major problem is that the negative externalities for burning fossil fuels are not included in today's prices, so it is difficult for renewable energy to compete in that market. For those large cities on the coast, who will pay if there is a rise in the sea level of 20 feet?
From the standpoint of physical laws, lack of political foresight only means the crisis will arrive earlier. Finally, Mother Nature always wins, and generally, we must pay now or we are going to pay more later.
There is not an energy crisis because energy is conserved; however, there is an energy dilemma in the use of finite resources and their effect on the environment. This is primarily due to the burning of fossil fuels. Even though we have had cheap energy from fossil fuels, this will not continue for the long term.
A rational energy policy has to have the following components in this order of priority:
1. Conservation and energy efficiency.
2. Substantial increase in the use of renewable energy during the next 25 years.
3. Reduction in the dependence on oil and natural gas during the coming transition period and continued use of U.S. natural gas with the realization that it is finite.
4. Nuclear energy for the production of electricity (waste disposal is primarily a political problem).
5. Clean coal (we have to reduce or sequester carbon dioxide emissions). However, the cost of using coal has to include all social costs (externalities).
Since the first energy crisis in 1973, conservation and energy efficiency have been the most cost-effective modes of operation. It is much cheaper to save a barrel of oil than to discover new oil or import oil.
Over the years, my students in solar and wind energy classes have consistently stated that gasoline has to be $3.50 to $5 per gallon before they would consider buying fuel-efficient vehicles. If all the costs for imported oil were included, including military costs of Oil War I (Gulf War), Oil War II (Iraq war), our continued military presence in the Middle East, and the cost for borrowing money from China and Japan to pay for imported oil, that cost would add around $1 per gallon.
An order-of-magnitude estimate clearly shows the dilemma in our use of imported oil. The United States uses around 7.3 billion barrels of oil a year, and around 5 billion barrels are imported. At $50 per barrel (today's price is around $70 per barrel) that is a transfer of $250 billion a year overseas. We cannot control our national debt until we change our habit of promoting cheap energy with borrowed dollars.
A rational energy policy will affect everybody, and that policy needs to start today. So along with conservation and efficiency, we need to do the following:
• Increase the tax on gasoline so people will purchase fuel-efficient vehicles (40 mpg by 2020, a standard that Europe and Japan already meet today). A federal tax of 50 cents per gallon should be added to today's taxes, and the variable tax should be set to place a price floor for gasoline at $4 per gallon during periods of cheaper oil.
The 50-cent-per-gallon tax on gasoline would about pay for Oil War II and Afghanistan.
• The national speed limit should be 65 mph, and for those highways that now have a 65 mph limit, it should be reduced to 60 mph so that everyone bears part of the burden.
This means it will take more time for trips, especially in the West, where there are 75 mph speed limits — and even an 80 mph speed limit on a stretch of highway in West Texas.
• When oil reaches $150 per barrel, open up offshore areas (East and West coasts) for drilling for oil and gas, and when oil reaches $200 per barrel, open up the Arctic National Wildlife Refuge. This should only be considered after vehicle fuel efficiency achieves 40 mpg and the minimum price for the cost of gasoline is $4 per gallon.
• Vaughn Nelson is the director of the Alternative Energy Institute at West Texas A&M University. Mr. Nelson has taught an online course about solar and wind energy for a number of years, and he is the author of "Wind Energy, Renewable Energy and the Environment."