If you had to name the foreign-policy heavyweight who has brought more political muscle to the energy-independence crusade than any other, it would be Dick Lugar. Republican from Indiana and chair of the Senate Foreign Relations Committee, Lugar is no stranger to superlatives: Named one of the “10 Best Senators” in a recent issue of Time Magazine, he is also widely considered one of the most influential moderate Republicans in Washington.

Hailing from an agrarian state, Lugar naturally considers homegrown biofuels the best weapon in the battle against dependency on foreign oil. In March, he partnered with Sen. Barack Obama (D-Ill.) to introduce the American Fuels Act, which would create mandatory targets for the use of renewable automotive fuels and offer incentives for ethanol fueling stations. He has also partnered across party lines with Sen. Joe Biden (D-Del.) on climate and conservation initiatives, and backed bipartisan bills such as the Vehicle and Fuel Choices for American Security Act, which would commit the White House to substantial reductions in oil demands. Last year, he voted in favor of boosting auto fuel-economy standards, reversing a long pattern of opposing stricter mile-per-gallon requirements.

But Lugar does not vote the environmental line on every issue. He’s been a longtime proponent of drilling in the Arctic National Wildlife Refuge, supported a rollback of Clean Air Act rules that would let power plants pollute more as they expand, and does not believe the U.S. economy is ready for a mandatory cap on carbon emissions.

Lugar spoke recently with Grist‘s Amanda Griscom Little from his tree farm in Indiana about the looming energy crisis, his affection for ethanol, and President Bush’s record on energy issues.


In a recent speech, you said that “energy is the albatross of American national security.” Can you elaborate? Would you say that America’s addiction to oil is our single biggest geopolitical vulnerability?

Well, I still believe that the problems of weapons of mass destruction, proliferation, and the growth of terrorist networks — at least in terms of immediate crises — are horrendous prospects. But in terms of the overall welfare of Americans, energy vulnerability may be the most significant strategic crisis that we face. It appears to me, bit by bit, as I hear Secretary [of State Condoleezza] Rice saying that energy issues warp foreign-policy considerations, that the new battle lines may very well be drawn around energy.

You also said that by the time a sustained energy crisis fully motivates the market, we’ll likely be past the point where we can save ourselves. How do you define a sustained energy crisis? Is $3-a-gallon gas merely the tip of the iceberg?

Yes, it is. It’s simply another price indicator of shortage. The amount of production appears to be declining worldwide. In part it’s because state governments sometimes do not operate their facilities adeptly. But I think the world has to understand that there may or may not be reserves out there. And even if there are, they clearly are not at our disposal. The fact is that American oil companies don’t have control over this situation. That’s why I am such a strong advocate of a shift to energy independence: We’re going to come into a different bargaining relationship vis-à-vis everybody else in the world when it is very clear that we have some [energy] alternatives.

In March you introduced legislation designed to preempt an energy crisis — the American Fuels Act of 2006. What, if implemented, would this bill accomplish?

It aims to coordinate the tremendous amount of enthusiasm we’re beginning to see for production of ethanol. The legislation would spur investment in alternative fuels by setting production targets for biofuels including ethanol and alternative diesel. It would also help increase consumer demand by offering a 35-cents-per-gallon tax credit for E85 fuel, and provide automakers with a tax credit for producing flexible-fuel vehicles, and create a director of energy security to carry out the goal of energy independence.

Corn-based ethanol requires substantial fossil-fuel inputs, while cellulosic ethanol demands far less. How do you propose to shift the focus from corn-based ethanol to cellulosic?

It’s true that right now we’re not getting much in the way of cellulosic except rhetoric. And there’s no question that cellulosic is far preferable to corn in terms of oil savings. In 1999, Jim Woolsey and I in an article in Foreign Affairs magazine pointed out the vulnerability, strategically, of energy and talked about the promise of cellulosic ethanol. President Clinton praised it and said this is the way of the future.

But the fact is, the implementation of all this didn’t happen then and it isn’t happening now. The corn-based ethanol facilities are technologically several steps ahead of the cellulosic, but I have no doubt that the market will select for cellulosic in the long term, and I believe we have to incentivize it in that direction. Our ethanol targets in the American Fuels Act are weighted toward cellulosic.

How essential should efficiency and conservation be in the effort to cut oil dependency? Isn’t it cheaper and easier to reduce energy use than find new sources?

Yes. Obviously my own enthusiasm for doing this in automobiles is manifested by the joy of having my Toyota Prius, watching the mileage gauge and so forth. I don’t know whether that change is going to come very easily to people, even at $3 gas or $4. But what is occurring obviously is that the same companies that produce these huge and inefficient cars that are manifestations of wealth and prestige and power are heading toward Chapter 11.

But do we need to mandate conservation? Do fuel-efficiency standards need to be raised?

Yes, I believe that is probably going to be required. I think we’re on the threshold of a pivotal CAFE [corporate average fuel economy] standard debate. I doubt whether the large changes that need to occur in production of energy-efficient automobiles will happen without that.

You long opposed increases to CAFE standards, but last year voted in favor of a bill that would have raised the requirements to 40 mpg. Will you continue to support such bills?

Those that propose reasonable increases, yes.

What about the notion of a gas tax? Wouldn’t higher gas prices encourage conservation, even if they’re not politically convenient?

Philosophically I would be in favor of just the point that you made. But my economic philosophy is mitigated slightly by the fact that this does not hit all people in our society quite equally. Very frequently low-income people are going to be hit abnormally. So I’m trying to wrestle with this problem of how in fact our economy continues to work, how there is a certain degree of equity and humanity in the process even as we work out philosophically the high-price element which does probably bring about conservation.

Perhaps we need more sophisticated public transportation systems.

Yes, but there are limits there, too. I struggled with this problem as mayor of Indianapolis. The city was not structured with corridors down a canal or a coastline or some such that really efficiently bring in a high percentage of persons to their work.

You and Sen. Biden introduced a resolution last November that calls for U.S. participation in international climate-change negotiations. Do you think the Bush administration’s decision to reject Kyoto was a blunder?

Well, the Congress rejected Kyoto long before Bush came into the picture. There was good reason to be concerned that Kyoto left out China and India — the areas of the world where greenhouse gases will likely be growing most quickly. So on the face of it, it wasn’t going to work.

But from a diplomacy standpoint, don’t you think it’s critical for the U.S. to demonstrate a willingness to cooperate in an international climate treaty, given that all our allies have made this a priority?

Yes. That’s why Sen. Biden and I proposed our climate resolution in November, when the Montreal conference was going on. The United States was participating, but only nominally, and we felt a greater display of interest was required. I want to encourage our administration to do this. And I think they are catching on, as evidenced in Secretary Rice’s observation that energy warps diplomacy. She understands that climate is a part of diplomacy that is extraordinarily important if the warp is to be taken out of the picture.

Another climate proposal you and Biden released last year calls for flexible solutions to climate change. Do you think that mandatory controls are needed right now?

I think we at least better start with a flexible cap-and-trade mechanism before instituting a mandate, so that when we do it’s not a cataclysmic shock to the economy.

In your opinion, is the Bush administration headed in the right direction on energy issues and moving America toward energy independence?

When the president talked about addiction to oil and all that sort of thing, that was a sea change. He has said he didn’t feel that it was that much of a sea change, but when he’s in good humor he has admitted that a number of his oil friends have felt that it was. Now the problem is rallying support. After you have made the ship turn around and head in that direction, now getting all the details and getting the bureaucracy, the secretaries, all the rest of them on board — that’s going to take some doing.

Is it difficult to be a moderate Republican in a time of heightened partisan tensions?

Oh, no. This is my 30th year, and Providence willing I will have six more. Phases of discord come and go. The critical thing in moments like these is to keep on themes that you believe are valid and build on them, build coalitions, build support. That’s exactly what’s happening in the area of energy security — growing bipartisan collaboration.

Many critics argue that some of your more extreme Republican colleagues are responsible for the stalemate on climate policy and energy-independence policies. Is that unfair?

Well, some of them really are opposed to change. They see the world in a different way.

How do you try and steer them toward change?

You just keep indicating as persuasively and calmly and diplomatically as possible why you believe that the facts and the trends are as you see them. I’ve seen some turnarounds, but they don’t happen dramatically.

You have been a strong supporter of drilling in the Arctic Refuge in the past. Why is that necessary given that it would only satisfy oil demands for six months?

First of all, I don’t know how many months it would satisfy. ANWR has become such a symbolic issue, we’ve almost lost track of whether there’s any supply there at all, quite apart from how much. I’ve consistently supported additional supplies, because it’s consistent with my argument that we need to move toward energy independence and illogical to deny that we have an ability at least to bring about some supply. So I’m going to continue to be in favor of extension of our supplies where that is possible and is not environmentally destructive. And I’m convinced that the footprint has been reduced and reduced and reduced, and probably can be reduced some more, to make the environmental hazards in ANWR negligible.

Beyond your Prius, what lifestyle decisions have you made to lessen your energy footprint?

I recently began selling carbon credits from our farm to the Chicago Climate Exchange. We have a 604-acre farm — about a third is in trees, a third in corn, a third in beans. I’ve been planting black walnut trees and other hardwood trees for 20 years or so to increase the amount of forest that I had. I consider these trees not only extraordinarily beautiful, but a big part of my life and my heritage. So it was a delight to discover that the Chicago climate folks have instituted a system in which they can evaluate the carbon-sink value of my trees. I’ve signed a five-year agreement to leave those trees soaking up carbon. Now each of my credits is worth about $3.40 — that’s up from $2 not so long ago.

It’s sort of a little-known fact how ingenious and inventive our market people are. I believe there is huge promise in this system — not just for companies trading pollution credits on a grand scale, but for individual landowners. Which is to say that America is already in very, very limited situations headed toward the Kyoto Protocol model.