The United States is confronting a looming crisis in the Persian Gulf. Iran, its economy hurting from international sanctions aimed at thwarting its nuclear ambitions, threatens to close the Strait of Hormuz should the West place a full embargo on Iranian oil. Since closing the strait would cut off 20 percent of the world’s tanker-carried oil supply, oil prices have already shot up to over $100 a barrel. They will undoubtedly rise far higher if the Iranians follow through on their threat.
Rather than speculate about the suggested scenarios for resolving the crisis, it may be worthwhile to look at what got us into it in the first place—our dependence on foreign oil.
America’s oil addiction is an old problem, first coming to our attention in the form of the 1973 oil embargo that led to sky-high prices and long lines at the gas pump. Unfortunately, several of the countries that get huge amounts of our petrodollars because they are blessed with the largest oil reserves are hostile to the United States or are led by potentially unstable regimes. Every president since Richard Nixon has promised to push through legislation to cure our addiction but none has succeeded.
We need, first, to conserve energy by vastly increasing the fuel efficiency of American vehicles. Current law is moving in the right direction, mandating a 54.5-miles-per-gallon standard for cars and light trucks by 2025. There should be no delay or backtracking on this standard, and, if anything, it should be raised even higher.
Second, we must develop alternative fuel options. One way is by passing the Open Fuel Standards Act, currently before Congress, which would require that by 2014 half of all new automobiles (80 percent by 2016 and 95 percent by 2017) be capable of operating on something in addition to gasoline—which would include electric and hybrid-electric vehicles as well as the traditional “flex-fuels,” ethanol biodiesel, and methanol. The manufacturing cost of making a car flex-fuel capable is only $100 per vehicle. Another promising approach is the provision of federal subsidies and tax credits for the purchase of plug-in electric and natural-gas-powered vehicles. Congress is considering such legislation.
A third step is to encourage the use of, and investment in, public transportation.
Fourth, foreign oil from a friendly source can be made available through approval of the Keystone XL pipeline project, which would transport Western Canadian Sedimentary Basin crude oil from Alberta, Canada, to points in Oklahoma and Texas. Overland pipelines from Canada are far safer than African or Asian shipping routes, Canada is a democratic ally and, at a time of high unemployment, the project would produce thousands of jobs for American workers—which is why it is supported by the American labor movement.
Finally, our nation must locate and develop new domestic sources of oil and gas. In an understandable reaction to the disastrous Gulf oil spill, there was, for a time, a government ban on offshore drilling. More stringent safety and environmental regulations are now in place, and the Administration has lifted the ban. Nevertheless, action is needed to expedite the issuance of more drilling permits.
None of these steps will be easy. Some will require Americans to sacrifice personal comfort and change their accustomed way of doing things. But the standoff in the Persian Gulf shows just how vital it is for the United States to guarantee its energy security by weaning itself off oil from overseas. If we manage to do so, no oil-producing state will ever have us “over a barrel” again.