Transportation sector lies at the root of U.S. energy problem
This is a guest essay from Jack D. Hidary, chair of SmartTransportation.org and the Freedom Prize Foundation. It was originally published on the Huffington Post and is republished here with the author’s permission.
The price of oil struck an ominous chord for the U.S. economy with yesterday’s record trade of $147 per barrel. At these prices we are sending more than $1 million every minute of every day to oil rich countries. As oil hits a new high the dollar has hit a record low against the euro. Our equity is draining away and flowing to foreign hands.
How can we get ourselves out of this mess? This crisis will take nothing short of a restructuring of our core industrial and transport sectors. Just as a turnaround CEO comes in to fix a troubled company, we need a retooling to rid ourselves of oil dependency. We do not need politicians looking for fake fixes such as a summer gas tax holiday.
We do not need the President of the United States of America to beg sheiks for a bit more of the black gold. Keep your dignity, Mr. President.
The problem is clear — 55 percent of all the oil we use in the U.S. is guzzled by cars and SUVs. Not planes, not trains, not big trucks. To find the problem look no further than your driveway. Yes, the fleet of 245 million cars and SUVs that we drive in the US — that is the main problem.
To address this crisis we should partner with automakers, utilities, and public transport and create millions of jobs in the process. We need to move immediately to high-mpg cars and the electrification of transportation. We must upgrade to a smarter electric grid and build out public transport to handle the increased ridership from high gas prices.
To deal with the oil crisis, T. Boone Pickens envisions an increase in wind power to offset the use of natural gas and direct that to the transportation sector. While more renewables are absolutely desirable this plan would take years to stabilize the economy and make a dent in oil use.
To decrease the use of oil in our cars we need the kind of retooling we did for World War II. In 1941 we asked Detroit to refit all their factories from pumping out cars to manufacturing planes and tanks.
Now we are in another war. A war against this debilitating addiction. We must ask Detroit and all automakers in America, foreign and domestic, to retool immediately to make cars of more than 30 mpg, hybrids of 40+ mpg and the mass scaling of plug-in hybrids that connect to our electric grid.
We must give the automakers the means to do this. Automakers are in trouble and cannot retool on their own. We should offer them loan guarantees and give incentives to private capital to invest in an immediate restructuring of all car plants.
If there is any tax reduction we should consider it is a capital gains discount for investment funds that pour significant dollars right now into reorganizing automakers around the new order of high oil prices. This could unleash tens of billions of dollars immediately at no cost to the U.S. Treasury.
We can put Detroit back to work and get off oil at the same time. In fact, we can only get off oil by getting auto workers back to work and replacing our addictive fleet of guzzlers.
We must also pull cars off the road at much faster rates. We currently have tens of millions of cars getting less than 18 mpg and stay on the road for more than 14 years. The average mpg of the fleet has stayed at 21 mpg for more than a decade.
We can use the same incentive structures that we successfully deployed to accelerate the retirement of old refrigerators and air conditioners in favor of energy star appliances. Now with the price of scrap auto steel through the roof at $560 per ton, we can afford to junk the worst offenders in low mileage. These tend to be heavier cars that can be worth thousands of dollars in scrap metal and reusable parts.
Second, let’s partner with our utilities and create new jobs in this sector. Most utilities are looking for more demand for electricity at night and to cut demand during peak daytime hours. Plug-in hybrids offer utilities that very opportunity to gain new demand at night while we charge up and to shave off the peak by taking back electrons during the day from those same vehicles.
Our national energy labs have concluded that we could replace more than half of all cars in the U.S. with plug-in hybrids and not have to add even one power plant. There is plenty of spare capacity at night.
We should give the utilities the ability to make the same profit off of efficiency gains as generating electrons and give them the capital to upgrade our to a smart network. This will create millions of high and low-tech jobs as we move to a 21st century bit-enabled electricity grid.
Third, let’s leverage private capital to build out public transport. While replacing cars is critical, we must move more Americans around using shared systems. High gas prices have already pushed public ridership to new highs. Let us meet this demand by putting at least $100 billion of public and private money into this infrastructure.
This stimulus will create millions of additional jobs at all levels of skill. In particular, the construction workers so hurt right now in the housing crisis will get right back to work on a sustainable asset for this country.
Back in 2005, the Congress passed the Energy Policy Act. Title X of that law calls for the Freedom Prizes — a set of prizes that raise awareness of our enslavement to oil and promote alternative solutions. The White House and Congress should focus more on tools that we have to address this problem than trying to convince OPEC countries to play nice.
We need to get U.S. workers back on the job and retool our economy now for this new reality. We are up to this challenge, but we must act now.