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After 50 years of OPEC, it's time to wean the U.S. economy from oil dependence

By: Steve Marshall
The Seattle Times
September 13, 2010


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OPEC, the oil cartel whose members control most of the world's oil reserves, celebrates its 50th anniversary Tuesday. In September of 1960, the governments of Iraq, Iran, Kuwait, Saudi Arabia and Venezuela met in Baghdad to discuss ways to increase the price of the crude oil they produced. They ended up creating the Organization of Petroleum Exporting Countries. But for the United States, it is nothing to celebrate.

That year, the United States was the strongest creditor nation in the world and had a relatively small need for imported oil.

But by 1973, our rising demand for oil meant we had to import 34 percent of the oil we used. That year, following the Yom Kippur War, Arab members of OPEC led an oil embargo against America. Long lines formed as service stations rationed gasoline, and the economy suffered. Every president since then vowed to end our dependence on foreign oil.

The result? We now import 60 percent of our oil. In 50 years, we have gone from being a strong creditor nation to a debtor nation sinking into deeper debt with every month of oil imports.

A major cause of our currently stalled economy is the vast amount we spend importing oil, averaging a billion dollars a day over the past three years. In June alone, oil imports accounted for $27 billion of the $47 billion trade deficit.

Most members of OPEC are undemocratic, hostile to our interests or both. If trends continue, OPEC will increase in power and revenues as the oil output of non-OPEC nations decline. We are at risk. Abundant, affordable energy is a fundamental requirement for a strong economy and a high standard of living, including the ability to fund government services.

After the Arab oil embargo, we made some changes. In 1973, we generated more than 20 percent of our electric power with oil; now it's less than 2 percent. But in transportation, we still live in an OPEC dream. About 97 percent of our transportation depends on oil.

Last week, President Obama called for a $50 billion investment in the nation's roads, railways and airports. But if our cars, trains and planes still depend only on oil, we will have just made it easier to transfer more wealth to OPEC. (We will spend more than $50 billion in just two months worth of oil imports). At the top of the infrastructure checklist should be measures to cut our dependence on oil.

In April, the U.S. adopted new rules for fuel economy and emissions. By 2016, cars will have to get 37.8 miles per gallon; 28.8 mpg for light trucks.

But this won't be enough to break our dependence. To do this, we need to move much faster to electricity and alternative fuels in our vehicles, and we need to transform the systems for moving people and goods.

We will need regulatory reform for electric utilities as well as vehicle innovation. Advances in communication and software are creating remarkable opportunities for coordination between vehicles and transportation systems as well as with utilities. The transportation and energy systems of the future can be clean, green and smart — and increasingly oil free.

In May, the president ordered a technical assessment on incentives and reforms needed to encourage new and emerging technologies and the "infrastructure for advanced vehicle technologies." Those assessments should be used to direct the priorities for spending the $50 billion in new transportation infrastructure.

Thanks to grants from the U.S. Department of Energy working with the Idaho National Laboratory, by this time next year, charging infrastructure for advanced electric vehicles will be in place in major metropolitan areas along the Interstate 5 corridor. The president's new transportation plan should build on this West Coast work to help end our oil dependence. That would be a good start to ensure that OPEC won't be around to celebrate another 50 years at our expense.

Steve Marshall, a senior fellow at the Cascadia Center for Regional Development, is working with the West Coast Corridor Coalition on a conference this week at Stanford University called "Climate Policy and Transportation: Building a Clean, Green and Smart West Coast Corridor" (westcoastcorridors.org)







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