A race to the top to cut U.S. oil dependence

Original Article

Last month, bipartisan bills were introduced in Congress designed to cut our nation’s dependence on oil. Called the “Electric Vehicle Deployment Act of 2010,” the idea is to create a competition similar to the recent “Race to the Top” in education.

This is a race we can and should win. Winning will bring economic development opportunities for a technology that Business Week said could rival the Internet in value. It will also help the economy by cutting our huge foreign-oil payments.

Under the bills, the Department of Energy would fund five to 15 regions to develop and showcase the best ideas for a rapid transition from oil to electricity in vehicles. The goal is to electrify half of U.S. cars by 2030 and cut our dependence on foreign oil.

Each day, Americans consume 20 million barrels of oil. We depend on oil for 97 percent of our transportation needs, and we import 60 percent of the oil we use — spending a billion dollars a day on foreign oil. Because oil is a world commodity, some of those oil billions wind up in hostile hands, undermining our national security.

We will spend more buying imported oil than on stimulus spending. Oil imports are the anti-stimulus. To that, add the costs to the environment, including BP’s ongoing, massive oil spill.

Although both political parties recognize the dangers of our oil dependence, it has been difficult to break the Washington, D.C., gridlock. Now with the Gulf oil spill, there may be enough pressure. These bipartisan bills head in the right direction.

Instead of regulatory penalties, they provide incentives modeled on a recent nationwide competition in education. The federal government set up a competition for $4.5 billion in additional education funding. To win, states had to adopt reforms by meeting general guidelines. The idea was to provide enough incentives to break the education stalemate. The result has been more reform in a shorter time than anyone expected.

The oil bills focus on electrification of vehicles, which is the right place to start. As David Sandalow at the Department of Energy has said: “To reduce oil dependence, nothing would do more good more quickly than making cars that could connect to the electric grid.”

Many incorrectly believe that oil is used to generate much of our electric power. But after the Arab oil embargo, we put the power grid on a crash oil diet. Power generated from oil went from 25 percent to 1 percent. We now must make a similar transition from oil to electricity in vehicles.

Senators in both parties are concerned that broad climate legislation would harm the economy, sending jobs to countries without equally strong regulations. The race-to-the-top bills, with their single focus on reducing our oil dependence, would instead help the economy and at the same time cut greenhouse-gas emissions. They would cost less than two weeks worth of buying foreign oil.

What can we do to win?

First, we need to implement the green-highway vision that the three West Coast governors and the British Columbia premier agreed to this year.

We also need reforms in four areas:

  • Reform utility regulation to make sure electric power companies are rewarded, not penalized, for helping to move from oil to electricity;
  • Enact a gas-tax revenue stabilization reform so that state transportation departments will not be deterred by lost revenues as gasoline use drops;
  • Create incentives for public and private fleet purchases, and
  • Work with automakers and software companies to help connect cars to a smart power grid and to a smart transportation system to make the most of a technology that will finally break our oil addiction.

Steve Marshall is a senior fellow at the Cascadia Center for Regional Development and is working with the West Coast Corridor Coalition on a conference Sept. 16-17 at Stanford University called “Climate Policy, Innovation and Transportation: Building a Clean, Green and Smart West Coast Corridor.” See