Saturday, October 16, 2004

Presidents have been promising energy independence since Richard Nixon addressed the nation amid the Arab oil embargo more than 30 years ago. For Jimmy Carter — who declared “the moral equivalent of war,” or MEOW, as Russell Baker observed — the path to energy independence led through synfuels, photovoltaic cells and cardigan sweaters. Today, both presidential candidates wax whimsically about eliminating America’s addiction to Middle East oil. But neither has put forward a plan that could achieve this in the foreseeable future.

To his credit, Mr. Bush favors exploiting the nation’s largest untapped oil reserves in Alaska and significantly expanding the role of nuclear energy. To his discredit, Mr. Kerry entered the presidential race by pledging to lead the filibuster against any energy bill that included development of the estimated 10 billion barrels of recoverable oil (each barrel contains 42 gallons) in Alaska’s Arctic National Wildlife Refuge. Moreover, despite embracing the Kyoto treaty’s caps on carbon emissions, which would force drastic cuts in U.S. energy production, Mr. Kerry opposes expanding nuclear power, which generates no greenhouse gases.

With less than 5 percent of the world’s population and 3 percent of the world’s proven oil reserves, the United States consumes about 25 percent of the world’s oil output. After the world oil price recently passed the $50 per barrel level, Mr. Kerry was right to declare that “[t]here is no way for us to drill our way out of this crisis.” On the other hand, it is equally true that America’s oil appetite would easily exceed 100 percent of the world’s oil output if every U.S. household consumed energy the way Mr. Kerry and his wife Teresa guzzle it — five palatial mansions; a Gulfstream II family jet; a 42-foot powerboat; and eight vehicles, including two Jeeps and a Suburban.

So, notwithstanding Mr. Kerry’s environment-friendly $8,000 bicycle, he and his wife need to spare Americans their do-as-I-say-not-as-I-do lectures. Introducing her husband at the Democratic convention, Mrs. Heinz Kerry audaciously spoke about “conservation methods of the future” (conveniently ignoring her excesses of the present) and “alternative fuels.” Meanwhile, her husband refuses to endorse the innovative Cape Wind Project, the first offshore wind park in the United States, which would be visible from her $10 million Nantucket waterfront mansion.

Last year, U.S. petroleum consumption exceeded 20 million barrels per day (bpd). That record level surpassed by 2.7 million bpd (or 16 percent) the amount of oil consumed in 1973, the year Arab members of the Organization of Petroleum Exporting Countries embargoed oil delivered to America during and after the October Mideast war. Within four months, the price of oil quadrupled, soaring from less than $3 per barrel to nearly $12. By November, the oil shock plunged the U.S. economy into its deepest postwar recession up to that point. The 1979 revolution in Iran sent oil prices soaring much higher, precipitating an even deeper recession than the 1973-75 downturn.



In fact, each of the last five U.S. recessions (1973-75, 1980, 1981-82, 1990-91 and 2001) has been preceded by Mideast oil shocks that sent prices skyward. U.S. net petroleum imports, which have doubled since the 1973 embargo, now approach 12 million bpd, or 60 percent of U.S. consumption. Even as both candidates rhapsodize about “the hydrogen economy,” the Department of Energy forecasts that the nation’s oil consumption will increase from 20.4 million bpd this year to roughly 30 million bpd by 2025, when imports will range from nearly 20 million bpd to more than 23 million bpd. According to the authoritative Oil and Gas Journal, five Persian Gulf nations — (Saudi Arabia: 262 billion barrels; Iraq: 113 billion barrels; Kuwait: 97 billion barrels; Iran: 90 billion barrels; and the United Arab Emirates: 98 billion barrels) — control nearly two-thirds (660 billion barrels) of the roughly 1 trillion barrels of the world’s proven oil reserves. Regrettably, neither candidate has offered a plan to deal with America’s increasing dependence upon an exceedingly unstable region for the supply of the world’s most indispensable commodity.

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