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Iranian warship shadows US Navy vessel in the narrow Straits of Hormuz separating Iran and the Saudi Arabian peninsula. Military conflict here could cut off the supply of oil to both the West and the developing economies of Asia-Pacific. Photo courtesy of Eddie Miller and Midwaysailor.com.

Out Foxed: Is Energy Independence a Bad Idea?

A measured response to Justin Fox's article in Fortune Magazine.

By Marc Franke

Marc Franke read the recent arcticle in Fortune Magazine by Justin Fox entitled, "Energy independence is a disaster in the making" and felt compelled to issue the following rebuttal, which he graciously permitted EV World to reprint.

Dear Mr. Fox,

Your is interesting, but misses some highly important points. You ask, "Why exactly would we want to punish ourselves by cutting ourselves off from the cheapest oil?"

Why indeed? We have already cut ourselves of from the "cheapest oil" by burning that "cheapest oil" right up the tailpipes of our SUVs. It has happened. That boat has already sailed.

The oil we can get from now on is the oil that is being provided at the level where demand is beginning to outstrip supply. Working for Fortune, I know you must understand what happens when demand outstrips supply; "cheap oil" is already and will increasingly be just a memory in the history books. Sure, the price will bobble up and down. As the price shoots up, demand will fall (we saw that during Katrina) and then the price will fall some. But... the huge increases in demand coming from China and India will only serve to keep driving up that baseline price; higher and higher every year.

A better question might be: "Why would we want to keep paying that big price for expensive, imported oil when we could switch to cheaper, domestically produced energy that doesn't put our environment, our economic and our national security at risk?"

What?, you say, domestically produced energy is cheaper... and renewable? Yep.

Here is a thought experiment for you.

Our electric utilities are saying that the electricity to move a Plug-in Hybrid Electric Vehicle (PHEV) down the road costs about one third the cost of the equivalent gasoline at today's prices. Let's say for the moment that their calculation is correct; electricity motion is one third the cost of gasoline motion. Sure, the vehicle itself might cost more. You've got the hybrid drive train ...and the cost of the batteries for a modest, 20-mile all-electric range. But you get paid back by that two thirds savings in energy costs. In the 100,000 mile life of a minivan, if you got 25 mpg and gasoline cost you $2.50/gal, you'd spend $10,000 just for the gasoline. Two thirds savings is $6,500. Seems like that extra vehicle cost might just save some money or at least break even by switching out gasoline for grid electricity.

How about the effect on our economy?

Well, new vehicles sales for those PHEVs might go up quite a bit as gasoline begins to go up past $2.50 to $3.00 and on up from there. That's probably good for the economy. Heck, if we have any more fuel disruptions from hurricanes or foreign difficulties (like if the recent terror attack on Saudi Arabia's largest oil tranmission facility had succeeded), Americans would be thrilled if they could "Plug-in" each night and charge their PHEVs for tomorrow's commute. I know during the oil shocks of the 70's (when we only imported 28% of our oil) with their long gasoline lines and shortages, we'd have been highly relieved to have a source of fuel at home in our garages!

How about the effect of changing out that $300 billion that currently goes outside of our country and keeping it here instead? $300 billion is the equivalent of 3 million new jobs that cost $100,000/yr for salary and benefits. Seems like keeping that much money IN our economy instead of sending it out would also be good for us. I'd even say it would "hugely stimulate" our economy instead of creating a disaster.

Now, you might be thinking, "Wait a minute! Isn't about half our electricity now made from coal?!!". Well, if you thought that, you'd be right. However, it doesn't have to stay that way! Wind energy in the windy areas of our country (West Texas on up through the midwest to the Dakotas...and off-shore sites along the coasts) is already cost competitive with coal for electricity. How about a government works program to build high capacity electric grid feeds from those windy areas to our population centers? Think that would stimulate the economy? Did the Interstate Highway system stimulate the economy? You bet it did! Anybody want to go back to the days when there was no Interstate Highway system? I don't think so.

For years, the American public has lived under the cloud that clean, renewable energy will ruin our economy and eliminate jobs. It is simply wrong. In fact, just the opposite is true. When you are importing over 60% of your oil, switching to domestic renewable energy will hugely benefit the economy, the environment and free our foreign policy from the need to "stabilize" the middle east in order to ensure the continued flow of oil from areas with repressed populations and political unrest.

Help spread the word! The time has come for our economy to shake off the shackles of expensive, imported oil!

Marc Franke
Ely, Iowa

Times Article Viewed: 7417
Published: 03-Mar-2006

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