
This is another post that I did a few years ago on my former blog. I think most of it is still germane today so I decided to repost it....
Every now and then, I need to put something on this blog that is secular in nature but still very important to me. As we all know, the price of energy the past two to three years has risen sharply. We have heard all the reasons (China growing, India growing, nervous about Iran, Iraq war, hurricanes and so on), but no solutions. The only thing that we can do well is blame each other for what we have done or not done to get us into this mess.
First, a bit of history to set the stage. On October 6, 1973, the Jewish holy day of Yom Kippur, Egyptian forces attacked Israel from across the Suez Canal, while at the same time Syrian troops were flooding the Golan Heights in a surprise offensive. After early losses, Israeli counterattacks quickly pushed into Syrian territory in the north, as troops outflanked the Egyptian army in the south. Israel, with help from the U.S., succeeded in reversing the Arab gains and a cease-fire was concluded in November. But on October 17, OPEC struck back against the West by imposing an oil embargo on the U.S., while increasing prices by 70% to America's Western European allies. Overnight, the price of a barrel of oil to these nations rose from $3 to $5.11. [In January 1974, they raised it further to $11.65.] Even though the U.S. and the Netherlands, in particular, were singled out for their support of Israel in the war, the embargo affected most of the western world as the price of oil went up for everybody.
This is now a tale of how two different growing economies dealt with this history changing event – the United States and Brazil. At the start of the embargo, the United States, which was far more dependant on foreign oil for our economy than Brazil was, took one approach. Brazil took quite another.
On August 4, 1977, President Jimmy Carter signed the U.S. Department of Energy (DOE) Organization Act (Public Law 95-91), centralizing the responsibilities of the Federal Energy Administration, the Energy Research and Development Administration, the Federal Power Commission and other energy-related government programs into a single presidential cabinet-level department.
Since the time of the inception of the DOE to the present, we (the American people) have spent over ¼ of a trillion dollars ($250,000,000,000) on this newly created cabinet post. In 2006, we are over the same barrel (of oil) that we were over in 1973. Most of our imported oil still comes from unstable, unfriendly countries that would like to see our wealth and power transferred to them.
Brazil on the other hand, did not create a new multi billion dollar cabinet post to take up space and tell the population bad news about how they were driving. Instead they decided to create a synthetic fuel out of sugar cane waste that could be used to augment the oil they could get domestically or from friendly, stable countries. Last month they announced that after three decades of research and focused retooling, Brazil would be 100% free of OPEC oil in 2007. In short, they have been able to tell OPEC to stick their oil back in the sand.
When Ronald Reagan was president, he caused a huge fire storm by suggesting that three of the cabinet posts could be eliminated due to redundancy or not serving an end item purpose to the American People. One of those cabinet posts was the DOE. Think of the billions of dollars we could have saved if we had taken President Reagan’s advice.
In 2006 during the State of the Union, President Bush (43) stated that we need to develop better synthetic fuels like corn and switch grass to take the stress off of our oil imports. Our government has finally admitted for the first time in three decades that we are addicted to oil. Now that is news!
What do we really do now that will make a difference to our children and grandchildren? First, admit our mistakes. The last 30 years have been a disaster from an energy standpoint. We can’t change the past, we can only learn from it.
If we are going to keep DOE, retool it immediately. Have the main focus fuel cell development (I know fuel cells have been around for years – I mean a “go to market” fuel cell), synthetic fuels, renewable energy and internal combustion efficiencies.
We need to do as Brazil did and establish energy independence as a national priority. Just as we did in World War II with the Manhattan Project or in the 1960’s with going to the Moon, we need to set energy independence up as a priority, get our best minds on it, offer tax incentives for new energy developments, AND THINK OUTSIDE THE BOX. We need to set a date certain and drive towards that date. We are only one hurricane, terrorist attack or embargo away from a real mess where price will not be the issue – supply will.
This is a crisis that is real and will not go away. As China and India continue to grow their populations and economies, our finite sources of fossil fuels will become scarcer and thereby more expensive. We need to stop looking like a herd of “deer in the headlights”, come out of our stupor and do something! We are Americans! We know how to solve big problems, win big battles, and work together for victory and success. We need to stop blaming each other, admit the blame belongs to all of us, and then move on. We owe this not only to ourselves, but to the generations that will follow us.