THE VINE JUNE 3, 2010
Thanks to the fiasco in the Gulf, there have been more and more discussions lately about how the United States can start weaning itself off oil, and both Craig Severance and the Center for American Progress have some useful, concrete suggestions on this score. One big-picture thing that's worth pointing out, though, is that our crude dependency isn't just a question of our love affair with gas-guzzling SUVs. Here's a chart from Charles Komanoff, based on EIA data, that shows how we actually use oil:
As it turns out, passenger travel—planes and cars, mainly—only accounts for 47 percent of our oil use. This is probably the trickiest item to fix and needs to be attacked from a whole bunch of different angles: ratcheting up CAFE standards, rolling out electric cars, bolstering mass transit, developing alternative fuels like clean diesel or some sort of futuristic and actually sustainable biofuel, plus smart-growth measures that can reduce the number of miles people need to drive in the first place. Higher gas taxes could help, too, though members of Congress act like they'd spontaneously combust if they ever proposed such a thing.
But that's only half of it. There's a lot of other oil use out there that may be easier to tackle in the short run. About eight million buildings, mostly in the Northeast, use oil for heating, and this accounts for 15 percent of the country's crude consumption. Renovating these buildings so that they can get their heat from natural gas or electricity would be a worthy endeavor. And there's no good reason why we should still be burning oil to generate electricity during peak-demand times—smarter grids or even solar power could help whittle that down.
Then there's freight, another 18 percent of oil use. I've noted before that it makes an enormous amount of sense to shift a good portion of freight from long-haul trucks to rail, especially electrified rail. As Philip Longman detailed in this Washington Monthly piece, moving 85 percent of the trucks off the road would U.S. curb oil use by as much as 22 percent while boosting the economy 13 percent by 2030 (thanks to better efficiencies), and lead to fewer traffic accidents and less congestion. What's not to love?
Point is, there's a lot more out there than just cracking down on SUVs. And yes, most of these measures would cost money: shifting all that freight to rail, for instance, would require investments of $250 billion to $500 billion over 20 years. But if the government needs funds, the obvious move would be to repeal some of the tax deductions and preferences that oil companies currently enjoy. Obama's FY2011 budget proposed saving some $45 billion over ten years this way. That wouldn't affect oil production much, as Alan Krueger has argued, but it is money that could be usefully spent elsewhere, and if the White House wants to eliminate those subsidies, now's the time to go for it.