Energy Conservation: An Idea Whose Time Has Come Again

By Robert Kuttner

Gasoline prices are down, largely because of the recession, but enjoy the bargain while you can. The next major economic shock could well be an energy crisis. Some 21% of U.S. oil consumption comes from the Middle East. If the war in Afghanistan drags on or widens, the Middle East could become more unstable and with it the short-run supply of oil. The Saudis have been reluctant to cooperate fully with U.S. intelligence, in part for fear of terrorist reprisals against their pipelines and refineries. Energy production and distribution are also vulnerable to the risk of further terrorist attacks at home. This is a crisis the country could face in the months ahead.

But a far more serious energy problem looms just beyond the horizon--the dwindling of worldwide oil reserves. From 1980 to 1990, new discoveries increased world petroleum reserves by over 60%. From 1990 to 2000, however, reserves increased by just 4%. A new book, Hubbert's Peak: The Impending World Oil Shortage, by the oil geologist Kenneth S. Deffeyes, calculates that world oil production will peak sometime in this decade and then, slowly and irreversibly, decline.

Deffeyes is no tree-hugger. At Shell Oil's research facilities in the 1960s, he worked with the famed geologist M. King Hubbert, the man who correctly forecast, in 1956, that U.S. domestic oil production would peak in the early 1970s. Today, the U.S. produces just 38% of the oil it consumes. Deffeyes, using Hubbert's methodology, shows that the trajectory of world reserves is closely following the pattern of U.S. discovery and depletion, with just a few decades' lag. Drilling deeper, in more remote locations, and with more elaborate technologies won't tap reserves that don't exist.

Short-term events and long-term prospects both cry out for a very different energy policy from the one being proposed by the Bush Administration: a policy that emphasizes conservation and a shift to renewable sources of power. Unfortunately, the Bush Administration's energy policy stresses new drilling rather than technology and conservation. The entire reserves in the Arctic National Wildlife Refuge, where Bush wants to drill, would yield only about 2% of U.S. annual consumption at its peak output in 2027, and hardly make a dent in total energy needs.

A quarter of a century ago, during the first U.S. energy crisis, a visionary named Amory Lovins burst upon the national scene with an article in Foreign Affairs, making the brilliantly simple observation that the cheapest source of "new" energy is to use less of it. If you consume one less barrel of oil, that's one less barrel you need to drill for. (Not surprisingly, oil companies were less than enthusiastic.) Lovins' other big idea was that "soft" energy--renewable and decentralized sources such as solar power--was both more reliable and less damaging to the natural environment than extracted carbon-based fuels.

Lovins hasn't gone away. Today, his Rocky Mountain Institute, based in Snowmass, Colo., consults for large corporations that share his insight that using less energy is the most efficient way of saving on energy bills. Lovins also invokes the current war emergency to promote decentralized and renewable modes of power, as well as the need to develop more energy-efficient technologies to stretch the supply of oil. Toyota Motor Corp.'s (TM ) midsize Prius car already offers 48 miles per gallon, using a self-charging hybrid gas-electric engine. Lovins is developing a variant of Prius technology that gets 100 mpg.

CRYING WOLF? The Administration likewise has had little interest in the global-warming problem. But reducing worldwide oil consumption for the sake of the environment also would reduce our dependence on imported oil and give scientists more time to develop practical alternatives before the oil ran out.

America made a false start at pursuing a different energy policy in the mid-1970s, using regulations, subsidies, and tax incentives to promote conservation and alternative fuels. But the energy crisis of that era was the artificial result of OPEC's temporary manipulation of oil prices. When oil prices receded after the 1980-81 recession, America returned to its love affair with gas-guzzling cars. Conservationists seemed like the boy who cried wolf.

Now, however, we face a real wolf. The world is truly running out of oil, and we face a political adversary far more serious than OPEC. The oil industry has never had a better friend than the Bush Administration. But George W. Bush needs to remember that he is now America's commander-in-chief, not Big Oil's. Policies that seem utopian and improbable suddenly look like common sense when national security demands them.

America's energy policy needs to tilt away from oil and in favor of conservation, new technology, and domestic renewables. The time to act is now, before the next wave of gas lines and rationing is upon us.

Robert Kuttner is co-editor of The American Prospect and author of Everything for Sale.

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