Kicking the Big-Car Habit

By Michael Elliott

THE COMMERCIAL EXPLOITATION OF CRUDE oil has been among the most liberating technologies the world has ever known. When pumped though an internal combustion engine stuck in a metal box, refined oil has given freedom of movement to billions. Before the automobile, the life experiences of most of those who lived in the rich world were limited--as in much of the poor world they remain--to neighborhood and family. When shot through gas turbines on wings, oil has shrunk the planet in a way that was once the stuff of science fiction. Neither of my parents ever flew; both my children had flown 30,000 miles before they were 2 years old.

But on Sept. 11, 2001, the world was reminded that oil is also a dangerous drug. The cheapest, most easily accessible oil reserves are in the Middle East, the most volatile region on earth. Future supplies of oil will be costly not simply in terms of dollars and cents but also in their effect on the environment. As those in poor countries dream of the same freedom of movement that the wealthy have enjoyed for a century, oil's polluting effects will only get worse. The number of cars in Beijing, for example, is growing 15% a year, contributing to the yellowy-gray haze that often envelops the city.

For all these reasons, it makes sense to dream of a world that is far, far less dependent on oil than it is now. Winning the Oil Endgame: American Innovation for Profits, Jobs and Security, written by a team led by Amory Lovins of the Rocky Mountain Institute in Snowmass, Colo., is one of the best analyses of energy policy yet produced. Lovins, who has been preaching the need for fuel efficiency for some 30 years, thinks big. His aim is to promote a set of policies that over the next two decades would save half the oil the U.S. uses, before moving to a hydrogen-based economy that dispenses with oil altogether (save for possible use as a fuel to produce hydrogen.) If that seems hopelessly Utopian, Lovins reminds us that we have done something very like it before. Spurred by the oil price shocks of the 1970s, the U.S. between 1977 and 1985 increased efficiency and cut oil consumption 17% (and net oil imports 50%) while the economy grew 27%. The key to that revolution was a huge increase in average miles-per-gallon of the U.S. automobile fleet. If we had continued to increase energy efficiency at the same rate, the stability of Iraq and Saudi Arabia would by now be of minor concern to U.S. policymakers. Instead, we bought SUVs and wasted two decades.

Those SUVs are no joke. In the U.S., where 70% of oil is used for transportation, any energy policy is necessarily also an automobile policy. The single key insight of Lovins' report is to focus on the need to reduce the weight of cars (without sacrificing safety) by using advanced materials like carbon fiber and composites instead of heavy steel. When powered by hybrid technologies that combine electricity with the internal-combustion engine, such light vehicles will produce enormous oil savings. Lovins proposes a nifty scheme of "feebates," which would reduce the consumer price of such energy-efficient cars while increasing the price of gas guzzlers.

So far, Japanese firms, especially Toyota and Honda, have taken the lead in advanced automobile technology. The Japanese car industry, Lovins said to me last week, has "uninhibited visionary leaders in a country which has no oil and is acutely aware of its oil dependence." If the U.S. automobile industry waits for years to see if lightweight fuel-efficient cars are more than a niche business, Lovins argues, it will one day discover that it has lost another market to overseas firms. There is a need too for political leadership. Lovins insists the study's recommendations require "no major federal legislation." But at the very least, they need a Federal Government prepared to encourage states and localities to experiment with policies that increase energy efficiency.

All reports that promise an easy solution to a complex problem need to be taken with a degree of skepticism, and Winning the Oil Endgame is no exception. The usual pork-barrel politics could quickly bog down some of the policy prescriptions in the book, like loan guarantees for the development of new energy-saving technologies. But in a sensible presidential election, the recommendations of Winning the Oil Endgame would be discussed and debated from now through November. Don't hold your breath.