Recession, Energy Crisis, and high Inflation are the best time for dramatic Change

We all know how much it costs to fill up the gas tank. We are frequently shaking our heads when we buy groceries and realize that a sparsely filled basket now costs as much as a bursting full one used to cost. We stay at home instead of going on vacations and we don’t go to restaurants as much anymore to stretch the dollars we have available for living.

Around us we see houses fall into foreclosure, people moving away, banks closing or being taken over by the federal government. In this environment a certain paralysis is growing, and the media keep increasing the fear by constant reporting of bad news.

When we look at one of the biggest issues in this mess, we come to see that the dependence on foreign oil is causing high fuel prices, and the suggested solution of more ethanol derived from corn is causing higher grocery prices. What can be done?

Normally I like to write my own posts and articles, but when one of my favorite authors tackles this situation, I think it is appropriate to let the masters words usurp my own. I don’t like to misuse these issues of highest importance as a forum to voice political opinions. That’s the reason I took as much of those references out of Thomas Friedman’s article (New York times 7/27/2008). I believe the message doesn’t suffer for it.

Friedman writes:
After 9/11, President Bush had the chance to summon the country to a great nation-building project focused on breaking our addiction to oil. Instead, he told us to go shopping. After gasoline prices hit $4.11 last week, he had the chance to summon the country to a great nation-building project focused on clean energy. Instead, he told us to go drilling.

Neither shopping nor drilling is the solution to our problems.

We don’t have a “gasoline price problem.” We have an addiction problem. We are addicted to dirty fossil fuels, and this addiction is driving a whole set of toxic trends that are harming our nation and world in many different ways. It is intensifying global warming, creating runaway global demand for oil and gas, weakening our currency by shifting huge amounts of dollars abroad to pay for oil imports, widening “energy poverty” across Africa, destroying plants and animals at record rates and fostering ever-stronger petro-dictatorships in Iran, Russia and Venezuela.

When a person is addicted to crack cocaine, his problem is not that the price of crack is going up. His problem is what that crack addiction is doing to his whole body. The cure is not cheaper crack, which would only perpetuate the addiction and all the problems it is creating. The cure is to break the addiction.

Ditto for us. Our cure is not cheaper gasoline, but a clean energy system. And the key to building that is to keep the price of gasoline and coal — our crack — higher, not lower, so consumers are moved to break their addiction to these dirty fuels and inventors are moved to create clean alternatives.

I understand why consumers think we have a gasoline price problem — because they are immediately hurt by higher gas prices, and the pump is where most people touch our energy system. They tend not to see the bigger picture. But that is why you have a president: to explain that and lay out a response.

Alas, we have a president and a vice president who deny that climate change is hurting our environmental body, who refuse to see the connection between the dollars we are shifting abroad and the rise of petro-dictators, who do not care about biodiversity loss and who are apparently untroubled by the sharp decline in the dollar, partly because of all the money we are paying for oil imports. So, they have chosen to define this as a “gasoline price crisis” — not an-addiction-to-a-fuel-that-is-badly-hurting-us-as-a-nation crisis.

On 7/17/2008 Al Gore delivered  a speech including a plan to the bipartisan Alliance for Climate Protection. Gore, the alliance’s chairman, called for a 10-year plan — the same amount of time John F. Kennedy set for getting us to the moon — to shift the entire country to “renewable energy and truly clean, carbon-free sources” to power our homes, factories and even transportation.

Gore proposed dramatically improving our national electricity grid and energy efficiency, while investing massively in clean solar, wind, geothermal and carbon-sequestered coal technologies that we know can work but just need to scale. To make the shift, he called for taxing carbon and offsetting that by reducing payroll taxes: Let’s “tax what we burn, not what we earn,” he said.” (Friedman, 2008)

I felt it was worth learning a few more details about this speech and the plan, again removing as much of any political retoric (there wasn’t much in it actually) and providing the core points here, to keep the integrity of the argument:

Among other things, Al Gore said: “We’re borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that’s got to change.

Today I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free sources within 10 years.

When President John F. Kennedy challenged our nation to land a man on the moon and bring him back safely in 10 years, many people doubted we could accomplish that goal. But 8 years and 2 months later, Neil Armstrong and Buzz Aldrin walked on the surface of the moon.

To be sure, reaching the goal of 100 percent renewable and truly clean electricity within 10 years will require us to overcome many obstacles. At present, for example, we do not have a unified national grid that is sufficiently advanced to link the areas where the sun shines and the wind blows to the cities in the East and the West that need the electricity.

Our national electric grid is critical infrastructure, as vital to the health and security of our economy as our highways and telecommunication networks. Today, our grids are antiquated, fragile, and vulnerable to cascading failure. Power outages and defects in the current grid system cost US businesses more than $120 billion dollars a year. It has to be upgraded anyway.

We could further increase the value and efficiency of a Unified National Grid by helping our struggling auto giants switch to the manufacture of plug-in electric cars. An electric vehicle fleet would sharply reduce the cost of driving a car, reduce pollution, and increase the flexibility of our electricity grid.

At the same time, of course, we need to greatly improve our commitment to efficiency and conservation. That’s the best investment we can make.

We must now lift our nation to reach another goal that will change history. Our entire civilization depends upon us now embarking on a new journey of exploration and discovery. Our success depends on our willingness as a people to undertake this journey and to complete it within 10 years. Once again, we have an opportunity to take a giant leap for humankind.” (Gore, 7/17/2008)

Long standing statistical research has shown that the American public is interested in the environment and willing to change. In 1988 63% of respondents said they want the environment to be protected and reduce the human impact. This year, the percentage was 65%. A veto-breaking majority wants change even though our current leaders have done just about everything to avoid it.

In the past we could argue that the alternatives are too expensive. With oil at $125/barrel that is no longer true. If we want to act, we can. The recession, the energy crisis, and rising inflation have brought long overdue focus to these issues.

That’s why they are the best thing to start dramatic change for a better, more prosperous future.

Axel Meierhoefer, AMC LLC