If I may be blunt myself, of all the fears concerning climate change and addiction to oil, the fear of wrecking our economy is most paralyzing but least substantial. Even if the costs were greater than they actually are, for America to turn away in fear from the challenges of climate and addiction would dishonor our heritage and lay our own responsibilities at the feet of future generations.
The irony of America’s recent energy policy is that, by taking little responsibility for our energy use, we have once again handed the power of the oil market to the Organization of Petroleum Exporting Countries (OPEC). The connection is straightforward. The Kyoto Protocol calls on nations to reduce their use of fossil fuel, mainly coal and oil. Reducing the use of oil makes oil less scarce and reduces its price. In fact, as I mention in the previous chapter, a reduction in the world’s use of oil was what crushed OPEC’s market power for eighteen years.
Our choice is not between a wrecked economy and economic growth. It is between controlling our own energy policy and letting OPEC’s high prices force upon us an energy policy of its own design. Theirs is a poor policy indeed, as OPEC profits from our addiction and dislikes policies that stop global warming. But its policy is forcing us to conserve oil. By 2007, our rising oil use leveled off, and in the first half of 2008 U.S. oil use was down over 2 percent from a year earlier and oil imports were down 2.5 percent. Compare this with an annual growth rate in oil use of 1.5 percent in the decade before 2005. President George W. Bush claims credit for reducing energy intensity—energy use compared with gross domestic product (GDP). But the reality is that OPEC’s high prices are making us conserve—just as they did in the 1980s—while the economy continues to grow. While conservation is a benefit, when administered by OPEC, it comes at far too high a price.
Instead of idly waiting to see what OPEC had in store for us, we could have chosen our own destiny. Our own market-based policies could have guided the use of better technology to reduce our dependence on coal and oil. According to the Department of Energy (DOE), this would have reduced the world price of oil—just as it did in the 1980s. The DOE discovered this in 1998 when Congress asked it how signing on to the Kyoto treaty would affect our economy. The DOE also discovered that implementing the Kyoto Protocol, flawed as it was, would not wreck our economy.
It is too late to avoid paying the present round of tribute to those powers both foreign and domestic that control the world’s oil. But we can, in a few years, regain control of our energy destiny by heeding the advice of a president who presided over some of the most perilous times in U.S. history. Even before confronting the perils of World War II, Franklin D. Roosevelt faced the dangers of the Great Depression. He did not flinch, saying, “Only a foolish optimist can deny the dark realities of the moment.” But he also warned of the greater danger of being ruled—and paralyzed—by fear, famously declaring “We have nothing to fear but fear itself.”
Just as it was seventy-odd years ago, fear itself is again our greatest enemy. That’s why I begin this book by dispensing with the exaggerated predictions of economic ruin, catastrophic shortages, and unstoppable climate change. And although the book is motivated by the real dangers of global warming and the dependence on foreign oil, I do not dwell on these. Instead, I present a plan to improve our chances against both threats, without wasting money and at a surprisingly low cost. Although no panacea exists, what we need as a nation is courage, cool heads, and a clever, low-risk plan of action.
