I have little quarrel with your comments about Congress’s failure to address oil supply, but you continually amaze me with your stubbornly consistent line on conservation. You say that alternative energy sources and conservation “can in no way displace meaningful amounts of oil, gas, or coal-especially in a market that will expand as long as the economy grows.” If you mean that these sources are not likely to actually reduce oil use, I would agree...at least for a number of years. But oil use will continue to grow without significant conservation measures. Here such measures certainly can “displace meaningful quantities,” reducing the rate of growth of oil use and eventually achieving a decline (and a decline in coal and natural gas use as well).
For oil, the most obvious policy measure is increasing automobile fuel economy standards. The domestic automakers argue that new standards will cause adverse safety consequences and are economically inefficient. I would respond that recent studies by Honda and others have shown that reducing vehicle weight, a potential (though not necessary) consequence of new standards, need not compromise vehicle safety. Further, the market for higher fuel economy is stymied by the relatively small net “personal” benefits to auto purchasers (the curve of “fuel savings minus higher vehicle purchase price” versus vehicle fuel economy is relatively flat), and the high risks to automakers trying to introduce high-fuel-economy (thus more expensive) vehicles when they don’t know that their competitors will do the same.
New standards demand that all manufacturers must follow the same general market path, reducing market risk. And reducing the rate of growth of oil use will benefit all consumers by taking pressure off of refinery expansion and new oil-field development requirements (and reducing greenhouse emissions, though I know you think global warming is a hoax), even though individual vehicle purchasers won’t take this into account in their buying decisions. New standards must take careful account of technology costs and vehicle development schedules, and the structure of new standards could do with a reworking (as the National Highway Traffic Safety Administration is already doing with their proposed standards for light trucks), but intelligently designed new fuel economy standards certainly can “displace meaningful quantities” of oil.
A policy that addresses both supply and demand is required for this country. I don’t understand why OGJ maintains such a one-dimensional viewpoint about this critical issue.
Steven E. Plotkin
Transportation energy consultant
Washington, DC
