On March 27 a panel of senior retired national security officials presented their case at the Methanol Policy Forum for an open fuel standard designed to break the international oil industry’s effective monopoly over the U.S. transportation fuels market.
The Open Fuel Standard Act of 2011 would “ensure that new vehicles enable fuel competition so as to reduce to the strategic importance of oil to the United States.” It would do so by requiring automakers to produce vehicles capable of running on alternative fuels in lieu of or in addition to gasoline.
Among the most economically competitive fuels would be ethanol and methanol derived from domestic feedstocks as well as from hemispheric neighbors such as Brazil, whose transportation sector is fueled by sugarcane-based ethanol.
David Sandalow, Assistant Secretary for Policy and International Affairs at the Department of Energy, highlighted in his keynote address that “95 percent of the energy used to move our cars and trucks in the United States comes from one source – petroleum.”
Robert McFarlane, National Security Advisor under the Reagan administration, noting that demand from China and India is expected to increase by 10 million barrels per day by 2014 according to some experts, expressed alarm that OPEC states are not increasing production capacity to keep up with demand.
“Consequently, nobody in the industry that I’ve heard of can tell you where that additional 10 million barrels a day is going to come from. So simple upward pressure on price from demand outstripping supply could put oil, according to [former Shell Oil CEO] John Hofmeister, at $200 per barrel.”
Ambassador James Woolsey, Director of Central Intelligence under the Clinton administration, estimated the current financial cost of the United States’ oil dependency.
“We borrow $1 billion per day to pay for foreign oil. That is more than $1,000 added tax per American, per year, and it’s paid to the governments of Iran, Saudi Arabia, and the rest.”
“We have got to get competition at the pump. Anything less than that is a real dereliction of duty on all of our parts.”
James Roche, former Secretary of the Air Force, added, “It’s not the government’s role to choose but it is the government’s role to remove obstacles in the way of a market trying to do what it should do.”
Retired Vice Admiral Dennis McGinn admonished that “there are a lot of vested interests that like things just the way we are.”
“We will rue the day that we were complacent enough and so comfortable with business as usual when we have our backs to the wall and the options once available to us are no longer.”
His criticism of political operatives aiming to discredit the science on climate change was particularly pointed.
“The United States is the only developed country in the world [that is still] having a discussion about climate change. And it’s because of wacky science, talk radio, and all of these very polarized political groups that just don’t want to think about another way of doing business.”
“The underlying psychology is that somehow that’s going to hurt our economy, lower our standard of living, affect our quality of life. It’s really ironic because actually the opposite is true. By embracing choice at the pump, by increasing our portfolio of energy choices for both transportation and electricity we create better economy, higher quality of life.”
Transitioning the discussion to ongoing U.S. counterterrorism efforts against Al Qaeda, Ambassador Woolsey contrasted moderate Islamic influences with the more virulent strains propagated by many of the religious leaders in Saudi Arabia, upon which the world has become increasingly dependent to offset oil production lost due to sanctions against Iran.
“Lawrence Wright, in his fine book The Looming Tower about Al Qaeda, says that with between 1 and 2 percent of the world’s Muslims, the Saudis control about 90 percent of the world’s Islamic institutions, including schools.”
Who finances them?
“Next time you’re pulling into a gas station, turn the rear view mirror a couple of inches so you’re looking into your own eyes. Now you know who’s paying for it. Welcome to the club,” Woolsey concluded.
Robert McFarlane was equally frank.
“All of us are concerned about our servicemen and women and the sacrifices they are making. Seldom do we ever hear, however, that they are over there in large measure because of our vulnerabilities and our reliance upon a single, petroleum-based fuel.”
“I think Gary Hart encapsulated it as well as anybody ever has. After a panel I chaired with him about a year and a half ago, a young woman said, “Senator Hart, why can’t our country develop an energy policy?
“He said, ‘We do have an energy policy. We rely on a single fuel, priced by a cartel, and every few years we go to war to maintain that privilege.’ ”
The audience laughed.
McFarlane replied, “If it weren’t essentially true, it would be laughable.”
Image: Niels Quist via Shutterstock