We Need a Long-Term Energy Strategy - CODA Automotive

By -?K. Forrest Beanum

SVP of Government Relations and External Affairs, CODA Holdings

With instability in the Middle East and?refinery disruptions in California causing extreme gas price volatility (prices soared past $5 in Los Angeles this week!), pressure is on the government once again to fix a complicated problem. An oft-touted solution we have heard about for decades has been a release of oil from the nation?s Strategic Petroleum Reserve (SPR) to immediately lower the price of the 130 million gallons of gasoline Americans consume each and every day. Last month, the Obama Administration met with oil market experts to?dust off old plans and contemplate such a move.

As it turns out, we have a different problem from the one the SPR was designed to solve. The SPR, initiated by President Carter after the oil crisis of the early ?70s, is an emergency stockpile of crude oil to be used to address large supply disruptions. But we don?t have a supply disruption problem; we have a price problem. And while an enormous release of oil from the SPR could theoretically increase supply enough to have a minor impact on the price of oil, such an effect would be temporary and short-term, and likely to be discounted heavily in oil commodity markets throughout the world.

Regardless of the immediate decisions made with respect to the SPR, we must not lose sight of the real challenge facing the country. We must not let any ephemeral fix obfuscate the fundamental fact that our dependence on oil weakens our nation, economy and security.

Remember that our entire transportation system ? ships, planes, buses, trains, cars and trucks ? the backbone of our economy, is powered overwhelmingly by oil ? a single, finite energy source found largely outside this country. In an ironic twist, oil has radically transformed from a resource that gave birth to cars and roadways that connected us and built one of America?s strongest industries into one of our biggest liabilities. Consider the fact that a single threat by a foreign adversary to cut off our supply is enough not just to spike prices, but to force the U.S. to consider a military response. It?s no wonder that high-ranking former military officials are?calling for energy independence!

For most individuals and small businesses, fuel represents their single largest variable expense. Profits and expendable income rise and fall in large part based on its price. And the higher the price of a gallon of gasoline, the fewer dollars we have to invest in plants, equipment and jobs.

It?s time to take real, decisive measures to address this issue once and for all. Notwithstanding those who want to release oil from the SPR ? or the perennial urge to investigate speculation in oil futures ? there is nothing that the United States can do about the price of gasoline. The price of gasoline is determined not by any action the President or the Congress can take, but rather by the world-wide supply and demand for oil. And global demand will continue to rise.

We?re finding new oil reserved in harder-to-reach places and competing for it more than ever. It took us all the way to 2010 ? more than a century- ? to reach one billion cars on the planet. But it will only take only another 20 years for a rising middle class and soaring demand in Beijing, Mumbai and Rio Di Janeiro to propel the planet to two billion cars. The real measures that we can take, and must take, are to transform the transportation sector so that it is no longer dependent solely on oil. It?s that simple.

The?recently adopted CAFE standards, which will nearly double fuel economy by 2025 to 54.5 miles per gallon, are a major step in the right direction. But there have been numerous proposals in recent years, from both sides of the aisle, that have stalled. One such proposal would accelerate the deployment of vehicles that use no gasoline by focusing our efforts to completely transform 10 to 15 communities around the country. A proof of concept, if you will.

We need to sober-up and realize that our dependence has become a vital threat to our prosperity and national security. We need to formulate a comprehensive, long-term energy strategy starting with the transportation sector, and we need to make the investments required to accelerate this transformation, because the cost of failure to do so is too great. The solution is right here at our finger tips; we just need to act.

And what action can you take? Well, how about taking the time to buckle up and test drive one of the new electric vehicles available on the market today? It?s a small step, but you may just find your next car ? perhaps your most fuel efficient vehicle yet.

It?s time to put politics aside, ignore the phony quick-fix solutions that politicians might offer, grab hold of the wheel and take personal responsibility for driving the agenda of our nation?s energy future.

(also published at http://www.huffingtonpost.com/k-forrest-beanum/electric-vehicles_b_1966577.html)

Source: http://www.codaautomotive.com/electric-vehicle-blog/we-need-a-long-term-energy-strategy/

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