Energy independence: it’s our choice

Automobile fuel economy standards are under review right now.   Pressure to lower them will grow with some arguing that consumers will no longer want fuel-efficient automobiles.  Let’s remember that we have relaxed these standards before with dire consequences to the economy.  We can not make the same mistake again.  

Indeed, right now everything about oil is coming up roses. Oil prices, oil consumption, and oil imports are low – all at the same time.  Low prices are good for the economy. We each have more money to spend. Low consumption is good for the environment since oil accounts for 30 percent of greenhouse gas emissions.  Low imports are good for national security because the Middle East cannot hold us hostage with an oil embargo.  But three times over the last 40+ years we have been here, only to kill the rose bushes through our complacency. 

{mosads}I was 28 years old in 1973, when OPEC embargoed the oil slated for the US, in retaliation for US support of Israel during the Yom Kippur War. The embargo produced high gasoline prices and shortages, with lines at gas stations as long as four miles.  Inflation skyrocketed, the stock market crashed and a recession ensued.  People wanted fuel-efficient cars but Detroit did not make them.  So Imports of Japanese cars skyrocketed and people in Detroit lost their jobs. The motor city began its long decline. President Nixon announced Project Independence.  We learned that we imported 30 percent of our oil, mostly from the Middle East.  Suddenly, we understood our economy and national security were tied to our use of oil. 

Congress responded with something called Corporate Average Fuel Efficiency (CAFÉ) standards.   CAFÉ standards are mandatory goals for the average efficiency (in miles per gallon) of the fleet of cars manufactured by each automobile corporation. The first ones required automobile fleets to average 18 miles per gallon (mpg) by 1978 and 27.5 by 1985.  

Back then I was a newly minted Ph.D. and professor doing research on energy options.  I was certain we would become energy independent in a few years.  I was wrong.  

The 1973 embargo was lifted early in 1974. A new normal soon emerged.  America became accustomed to higher prices.  Complacency set in. Oil consumption increased again.  By 1977 imports had climbed to 40 percent of consumption. 

Then, in 1979, it happened again following the Iranian Revolution. The price of gasoline jumped 108 percent in a few months.  Another recession ensued.  Inflation went through the roof.  Surely we would act now, I thought.

Again things settled down. Prices stabilized.  We grew complacent.  The CAFÉ standard was relaxed to 26 mpg.  By 2005, oil imports had climbed to a whooping 60 percent of consumption and total consumption hit an all time high.  

Then it happened again.  Between 2005 and 2008, oil prices climbed steadily, peaking at $4.41 per gallon.  This time the cause was traditional supply-demand economics.  Demand was high. Supply could not keep up, so prices climbed, a painful situation as we confronted the 2008 recession.  But, because of advancements in drilling technology, America now had home grown oil to fill the gap in supply.  As supply increased prices dropped rapidly, reaching $1.25 last fall.     

Today, even at $2.50 per gallon, prices are lower in inflation-adjusted dollars than in1918, the year of the first record.   Consumption is 12 percent lower than in 2005.   Oil imports are only 20 percent of oil consumption and only half of that is from the Organization of Petroleum Exporting Countries (OPEC).   OPEC is on its heels and in an economic mess itself.     

I am now 71 years old.  It took 43 years but America is finally energy independent. I want to keep it that way for my grandchildren.  Our Nation cannot be held hostage again – unless we become complacent again. It is our choice. 

Two actions are essential and two more would help.  First, and most importantly, we must hold fast on the Corporate Average Fuel Efficiency (CAFÉ) standards. The standard for 2016 is 34.1 miles per gallon (mpg). The goal for 2025 is 54.5 mpg.  The Environmental Protection Agency (EPA) is gathering data now for a review of this goal. It could be relaxed.  We cannot let that happen. Automobile manufacturers believe they can meet the standard and are on track to do so.  We must stick with it.   

Second consumers must act with knowledge of consequences.  We can take our road trips in our SUV’s this summer, but when we buy a new car, we must make certain its efficiency is better than our old one.  Today’s technology allows us to choose a safe car, one that accommodates the family, and one that is highly efficient.  Pay attention!

Two additional federal policies are in the talking stages.  Neither is likely to gain traction until after the Presidential election. Obama has proposed a 24¢ per gallon tax on oil to be phased in over five years.  The money is earmarked for mass transit including high-speed rail between cities and light rail within cities.  Even with a 24¢ increase today, oil prices would be lower than in 1918.     

Last month the Panhandle Producers and Royalty Owners Association offered up aproposal to limit oil imports. This worked well when Eisenhower did it in 1950 and it can work well again.   

Our economy, our national security, and our environment depend on us staying the course.  We can have low oil prices, low oil consumption, and low oil imports all at the same time – good for the economy, the environment, and national security all at the same time.  I want my children and grandchildren to say we finally learned our lesson.

Martha W. Gilliland is retired, having been a professor of environmental engineering at the University of Arizona, Provost at Tulane University, and Chancellor of the University of Missouri-Kansas City.  She has published widely on energy policy and is a public voices fellows with the Op-Ed Project.