Open Forum

Kerry's Low-Watt Energy Policy


Political speeches are always light on specifics and heavy on catch phrases. But John Kerry’s speech at the Democratic National Convention was remarkable for its near-total disregard for the harsh realities of America’s current energy predicament.

Kerry said that the Democrats “value an America that controls its own destiny because it’s finally and forever independent of Mideast oil.†He sees an America that relies on “ingenuity and innovation, not the Saudi royal family†and one where “new technologies and alternative fuels and the cars of the future†will assure that no American soldier “will ever be held hostage to our dependence on oil from the Middle East.â€

Those statements—particularly the one that smacked the Saudi royals— got big cheers from the crowd. Alas, the harsh realities of the global energy market combined with the woeful lack of new technologies and fuels that can replace petroleum are damn scary. In short, Kerry’s energy plan: ignores history, ignores geography, and doesn’t deal head-on with the need for future energy development in North America.

That said, Kerry’s plan is better than Bush’s, particularly when it comes to renewable energy. Kerry wants to push hard for renewable energy—maybe too hard. By 2020, Kerry wants 20 percent of America’s electricity to come from renewable sources. That’s a far more ambitious goal than the one put forward by green power groups like the American Wind Energy Association, which hopes that wind will provide six percent of America’s needs by 2020. At present, about one percent of our electric power comes from renewables. To achieve Kerry’s goal, would require an investment of more than $200 billion. Kerry hopes to achieve that goal with incentives and tax credits.

There are other good ideas in Kerry’s platform. He advocates spending $10 billion to develop “clean coal†technology—which could be used in electric power plants. He also proposes investments—some $30 billion over ten years—in tax incentives, federal R&D and public-private partnerships that will improve energy efficiency. And he wants to cut the energy consumption of the federal government by 20 percent. All of these are good starts. And over the long term, they will make a difference.

But many of these proposals are similar to the plans put forward by George W. Bush and his fellow oilman, Dick Cheney. They, too, want to fund clean coal, and they favor tax credits for renewable energy, and tax credits for citizens who buy hybrid gasoline-electric cars. In some areas, their proposals are more progressive than Kerry’s.

So why pick on Kerry’s energy plan? Well, let’s start with some history. Shortly after the 1973 Arab oil embargo sent oil prices soaring, Richard Nixon declared his plan for American “energy independence.†Nixon told the American people, “Let this be our national goal: At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving.â€

When Nixon made that pronouncement, the U.S. imported about six million barrels of oil per day. Today, the U.S. is importing nearly twice that much oil. Imports from the Persian Gulf have nearly tripled. Overall oil consumption in America has jumped by 25 percent since 1973 and domestic production of oil has fallen by about 30 percent. It’s difficult to imagine a worse list of ingredients when making a recipe for energy independence.

Second, geography. We may not like the Saudis and their corrupt monarchy. But when it comes to energy, they have the U.S., and the rest of world, over a barrel. (No pun intended). For instance, the Saudis now produce about nine million barrels of crude oil per day. American motorists now consume about nine million barrels of gasoline per day. That fuel is critical to the American economy and there is no ready substitute. The Saudis provide nearly 70 percent of the oil being imported by the U.S. from the Persian Gulf. Nearly 22 percent of all the 20 million barrels of crude oil consumed in America now comes from the Persian Gulf.

Furthermore, over 60 percent of the globe’s proven oil reserves lie in just five Persian Gulf countries: Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates. The unfortunate truths about America’s energy addiction are these: America’s energy policy and its foreign policy have merged; and neither the U.S. nor any other country that consumes large amounts of energy will be independent of Arabian crude anytime over the next 50 years or so. The world energy markets have become too interdependent—and more importantly, too reliant on Basra Light, Arab Heavy, Kuwait Export, and other Persian Gulf grades of crude—to simply forget the oilfields that lie between Mesopotamia and the Strait of Hormuz.

Instead of facing these geographic realities, Kerry hopes to shift imports away from the Persian Gulf and instead rely on “Russia, Canada and non-OPEC countries in Africa.†That’s a fine concept—but only if you ignore the bad news coming out of each of those locales. The oligarchs in Russia can’t decide if they really like this capitalism thing or not. The ongoing struggle over the future of Yukos, one of Russia’s biggest oil companies, is just the latest example of that indecision. In Canada, natural gas production “has plateaued,†according to a report released last year by the National Petroleum Council. Billions of dollars of new investment will be needed to increase Canadian production of oil and natural gas. Meanwhile, the oil-rich countries of west Africa are, more likely than not, corrupt, unstable, dictatorships. The oil industry in Nigeria (a member of OPEC) has done nothing to improve the living conditions or income levels of most Nigerians.

With regard to domestic energy production, Kerry faces tough choices. If the U.S. is going to reduce imports, domestic production will have to increase. And that means lots more drilling for coal-bed methane—a messy process that requires massive amounts of new roads —in sensitive federal lands in the Rocky Mountains and the western U.S.

Further, the Democrats are going to have to get serious about Arctic energy. Their environmental platform says that Kerry has fought “to protect the Arctic National Wildlife Refuge and other pristine wilderness areas.†Protecting ANWR has become the Democrats’ environmental litmus test. Bush wants to drill in ANWR, saying that the refuge “could provide up to 1 million barrels of oil a day for nearly 20 years.â€

The Democrats want it both ways: they oppose the war in Iraq—a conflict whose primary motivation was oil. Yet they don’t want to touch a domestic reserve containing at least three billion barrels of oil, even though it won’t require the deployment of a single American soldier. The Democrats are also split on how to develop badly needed Arctic natural gas. Together, Alaska and the McKenzie Delta region in Canada’s Northwest Territories, contain some 40 trillion cubic feet of natural gas. That’s enough gas to supply all of America’s needs for nearly two years. Kerry favors the construction of a pipeline that would bring that gas to the continental U.S. But picking the right route for the pipeline is essential. And it will have to be built soon in order to deal with a looming natural gas shortage here in the U.S.

So what should Kerry’s approach be?

First, he needs to tell the truth: admit there’s a limited amount of energy on earth. This may be too obvious, but if the U.S. is ever going to get serious about saving energy, consumers must recognize that there are limits to energy production—and thus, energy consumption. Once that hard fact is accepted, then a long-term plan for saving energy becomes more viable.

Second, he’s going to have to admit that there are no silver bullets. America can work to reduce the amount of oil it imports from Arab countries that support terrorism. But—and here’s the key—that effort will take decades of work and hundreds of billions of dollars in new investment. Unless or until those investments are made, the U.S. will continue to depend on the Saudis to maintain stability in the world oil market.

Third, the $30 billion over ten years that Kerry proposes for tax credits to encourage conservation and efficiency is a fraction of what is needed. The U.S. now burns about $3 billion worth of gasoline every four days. The incentives should be several times that $3 billion figure in order to get quick results.

Kerry is right to tout new technologies, conservation, efficiency, and next generation fuels. But repeating Nixon-era pipe dreams about “energy independence†won’t fill our gas tanks. Furthermore, by failing to discuss the obvious: that by depending on Arab states—many of whom fund terrorism —to fill our gas tanks, America dooms itself to fail in the war on terrorism.

Unless or until Kerry—or some other candidate—talks candidly with the American people about our energy addiction, and the huge costs that come with it, we will continue to teeter on the edge of yet another energy crisis.

Robert Bryce, a contributing writer, is the author of Cronies: Oil, the Bushes, and the Rise of Texas, America’s Superstate.