?The natural gas boom has led to cleaner power and greater energy independence?much of our newfound energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let?s take their advice and free our families and businesses from the painful spikes in gas prices we?ve put up with for far too long.? ? President Obama?s 2013 State of the Union address.
Amen?the president got it right. Recent data indicates the reduction of GHG emissions and other environmental benefits of using natural gas (as well as other alternative fuels) and recent analyses show a significant reduction of expensive oil imports into the nation, based in part on the production and increased use of natural gas. Obama, as a result, will speed up authorization for drilling, consistent with soon-to-be announced, federal regulations to assure that fracking and horizontal drilling won?t harm the nation?s environment, air and water. As important, the president will create an Energy Security Trust to fund research and technology that will help natural gas burn cleaner and to ?shift our cars and trucks off oil for good.? Americans may soon be able to choose between cleaner-burning, environmentally better, safer and lower-cost alternative fuels, including natural gas, its derivative methanol and gasoline.
Immediately following the president?s speech, American Petroleum Institute leaders, including my friend (just kidding ? I don?t know him) Jack Gerard, head of the group, were critical. Why not? It?s understandable and predictable. They represent the oil industry and many are lobbyists. It?s their job to criticize when a president, any president, proposes initiatives that might negatively affect oil production and distribution. Obama was very blunt. Paraphrasing, the president indicated that the country would be better off if we got off of oil (gasoline) to fuel vehicles.
Although the president indicated that with the proper protection, he will increase drilling on public lands, he also appeared to recognize that ?drill, baby, drill? will not end oil dependency, given the global oil market and the desire of U.S. producers to sell to the highest bidder. What I found interesting about the speech is the decoupling of alternative transitional vehicular fuels, in this case natural gas and methanol, from ?not-yet-ready-for-prime-time? electric cars and other renewable sources of fuel. I think the president and his colleagues, like most Americans (including this columnist), hope that electric cars and hydrogen fuel-cell cars will be in our future. Implicit in the president?s speech is the fact that their ability to scale up and reach mass markets probably remains at least a decade away ? even further perhaps for the hydrogen fuel-cell vehicles. Why not start now through significantly increased use of alternative transitional fuels to reduce oil dependency and improve the environment?
State of the Union speeches are not supposed to be big on specifics, and certainly President Obama?s speech did not break from the past on its presentation of detailed strategies. As noted earlier, he did mention creation of a security fund from revenues associated with oil and natural gas drilling?a mild way to say modest taxes or fees. This was sort of a nondescript statement to respond to his own stated ground rule that new programs will not have a negative impact on the budget and budget deficit. I suspect that the idea may fall by the wayside, given the divide in the Congress. But others will replace it.
What was left out in the speech, I assume because of time limits, was the mention of the mostly non-budgetary steps the administration could immediately take to move his ?off oil? agenda. For example, the president could have said, ?I will ask EPA to work with a bipartisan coalition of business, industry and environmental leaders to amend current regulations restricting conversion of existing cars from gas-only cars to flex-fuel cars ?ethanol and methanol.? This would cost each of us who desire to do so only about $200-300. He could have indicated that he will ask Congress to vote up or down (but urge up) on open fuel standards legislation, legislation which has already been introduced in past Congresses. Further, he could have said, ?Sometime in the next two months or so, I will invite Detroit automakers to the White House to discuss the need to increase the production of flex-fuel automobiles.? Finally, he could have announced support for the many leaders around the nation, like, Gov. Hickenlooper (D) and Gov. Fallin (R), who are leading efforts to expand the use of alternative fuels such as natural gas and methanol, and Mayor Bloomberg (I) and developer George Mitchell (R), who have jointly funded a study involving many states to respond to drilling issues in a fair and effective manner.
But the president?s speech, even absent of my suggestions, provides a good, first-time, political and normative base to build a set of initiatives that would allow Americans more fuel choices at the pump. As the president suggested, less reliance on oil and gasoline would likely flatten out price spikes, reduce dependency on imported oil, lower the price of fuel and generate a healthier environment overall. Whatever one might think about the other parts of the presentation, the president deserves credit and applause for pointing us in the right direction concerning the opening up of restrictive, almost-monopolistic, oil markets. Paraphrasing the poet Robert Frost, we should take the road less traveled, which is the road to reducing oil dependency. The president has been joined in this important journey by many republican, independent and democratic leaders, state and local government officials, business and nonprofit leaders and American citizens. It?s a journey, which at its core, is a free market one. Borrowing from E.F. Hutton and Co., when the president talks, we should listen, think and,?hopefully,?respond in a bi-partisan manner. Amen again.
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