Goldman: On Energy Independence

Thursday, May 03, 2012
By: Marc Goldman

Energy independence is one of the most misunderstood topics in the United States. Most people immediately picture solar panels, windmills or perhaps nuclear plants. However no amount of solar panels or windmills even nuclear plants will help alleviate our dependence on foreign oil. The fact is, the United States already produces our electricity from our own domestic sources. We use our own coal, natural gas, nuclear and hydro-electric to produce 100% of our electricity. The entire issue of dependence and security is about transportation fuel. In a word, OIL. America, as well as the rest of the world, imports its oil from some of the most hostile and aggressive regimes on the planet.

As long as OIL is the only fuel that propels cars and trucks, ships and planes we will be subject to OIL pressure. Fuel cells, electric cars, and other technologies may one day give us vehicles that operate differently. And we should work to continue to develop them. But right now we have a proven technology that will break the link between transportation and oil by adopting open fuel standards.

Cars account for approximately 50% of our current oil usage. Two bills before Congress (HR-1687 and SR-1603) would require new cars that run on gasoline to also be able to run on alcohol-based fuels – methanol and ethanol. The additional cost to a new car would be about $100 primarily for better gaskets and hose material; the engine is the same. You can get more information at

There are already some flex-fuel vehicles, of course, and they function just fine. But this legislation will open new demand for alcohol fuel and alcohol pumps at fueling stations – a demand which the market is fully able to meet with the relatively recent discovery that we have trillions of cubic feet of accessible natural gas which is easily turned into liquid methanol.

The idea of the "government mandating fuel choice" really disturbs some people, although as mandates go, this one is minimal. Private capital can be expected to enter the domestic fuels market, both at the production end and at the pump, creating domestic jobs as well as improving our balance of payments. And people won't be required to put alcohol-based fuel in their cars. For the first time since the early 1920s people will have fuel choice. The Model T Ford was a flex fuel vehicle, until prohibition made alcohol illegal.

Brazil has moved almost entirely away from gasoline-only-powered automobiles, and the same auto companies that make cars for Brazil make them for the U.S. market. The fuel is here, the technology is proven – what we are lacking thus far is leadership.

Under the constitution the primary obligation of the government is to provide for the common defense. That ought to mean true energy independence, where we needn’t fund the regimes of Iran, of Saudi Arabia, of Venezuela and the rest of the OPEC cartel.

One of these OPEC countries, Iran, promotes an apocalyptic worldview – if in furtherance of their goals they interfere with the flow of OIL, America will see that our dependence on OIL is not only about how much it cost to fill our cars with gasoline. We depend on OIL to get our food to market, to get to work, to export our products and to import goods from other countries – Imagine the chaos and dislocation if the transportation industry screeched to a halt. Our very ability to function depends on the movement of goods, services, and people across a very large country and beyond.

Our government’s obligation is to protect us against such threats. The government has seen fit to impose endless rules and laws requiring us to wear our seatbelts, take off our shoes at the airport or in fact prohibit directly funding terror-promoting groups. At the same time our elected representatives are in effect requiring us to fund those who actively seek our destruction by keeping us dependent on OIL.

Today, Europeans are paying $8-10/gallon for gas and are even more dependent on OIL imports than we are even though their cars are more fuel-efficient and they have more trains. If the United States shows leadership by breaking the link between transportation and OIL, the Europeans as well as the rest of the world will follow us. And interestingly, Israel – our good friend, but one that has mixed relations with the countries of Europe – is sitting on a major natural gas find. It doesn't take much imagination to foresee the next energy-based alliance being the U.S.-Europe-Israel.

I think most of us would agree that the world will be a much better place under that very doable scenario than we are under our current dependence on the likes of Iran, Saudi Arabia, Venezuela and their allies. And no amount of solar panels, windmills or nuclear plants will help. It’s all about OIL.

Marc Goldman is a member of the RJC Board of Directors.