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The Oil Independence Opportunity Lurking in the State of the Union

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The president's reaffirmation of his commitment to action on climate change, action through his Executive Power if Congress won't act, was unequivocal. That's exciting. But it's also clear that no road map has been developed for the kind of progress that is needed -- not by the White House, not by the Democrats in Congress, and, I would argue, not by the climate movement. (Yes, various climate advocates have called for the full range of steps needed -- but there is no obvious summary agenda which has taken the place of pricing carbon -- the option which, at any meaningful level, is currently off the table and which the president did not embrace.)

There are definitely steps that have been flagged. Recognizing that the Keystone XL Pipeline is a boondoggle designed to increase oil prices in the Midwest, use the U.S. as the sacrifice zone for the risks of refining tar sands bitumen, and lock the world into unaffordable $90 dirty transportation fuel should be -- but isn't -- a no brainer.

Obama needs to move ahead with regulating not just new, but existing, coal power plants under the Clean Air Act. The president called for doubling energy efficiency, and the use of revenues from federal oil and gas drilling to reduce our dependence on fossil fuels. He called for a "fix it first" approach to our infrastructure deficits, many of whose components, like broad band wireless access, would also help cut waste of fossil fuels and the resultant carbon pollution.

If all this happens, and states hold on to their commitment to renewable electricity standards, the U.S. utility sector will be on its way to a low-carbon future. But although the newly promulgated efficiency standards for cars and trucks will eventually reduce U.S. oil consumption by 2.5 million barrels a day, that leaves almost 90 percent of our dependence on oil untouched.

Getting beyond oil is the next big challenge facing the American economy. Forgot the glitzy promises of "Saudi America." Even the most bullish projections of increased oil production from tight formations like the Bakken show the cost of imported oil remaining at $300 billion a year indefinitely.

It's not how much oil we import -- it's how many dollars we export that's crippling our economy.

What the president did not offer -- and what we need -- is an ambitious national goal, not just reducing our oil dependence. Let's end it. Let's break the oil industry's monopoly. Let's replace at least another 7 million barrels of transportation energy with efficiency and other non-petroleum sources. That would make the U.S. free from dependence on imported oil -- market forces won't do it.

Such a goal could also unlock an economic and sustainability revolution. It is excess demand which drove the price of oil from $30 only a decade ago to $100 today. Just cutting global consumption of oil by 7 mbd over the next five years would bring that price back down to a reasonable $60/barrel.

The world cannot afford -- and need not tolerate -- fuel prices of $4 gallon. Oil consumers pay this extortionate rate only because oil has a monopoly.

Ending our dependence on imported oil would have the same economic benefits as a permanent stimulus package of $300 billion a year -- without adding a penny to the deficit. Oil imports amount to a tax paid to foreign governments like Iran, Russia and Saudi Arabia. (That's ¾ the size of our fiscal deficit challenge, for the record.)

This benefit results not just from importing less oil, but from reducing the price of the remaining oil we use. That's a factor not commonly taken into account in calculating the benefits of investments that replace oil with renewable fuels, vehicle performance and transportation efficiency shifts like road to rail.

What happens environmentally if we get the price of oil back to $60? Well, the investors in the Keystone Pipeline would thank President Obama for refusing to permit it, because at $60/barrel there is no economic market for new tar sands oil. Nor would Shell keep fighting for the right to bring its badly damaged, unArctic worthy drilling rigs back to the Chuckchi Sea. Extreme oil - more than half of the risk oil poses to the climate - is a threat only when the price of oil remains at or near $90/barrel or higher.

So setting a national goal of oil independence, and meeting it by investing in an All-American, sustainable transportation system, are the biggest steps the president -- or the Congress -- could take to move forward on climate -- and to jumpstart our economy. Implementing that goal would drive the development of low-carbon transportation alternatives. After we have ended the threat of extreme, expensive oil, by cutting global demand by 7 mbd, the U.S. and the world would be positioned to take the next step -- moving beyond cheaper, conventional oil, which amounts to the bulk of the world's transportation fuel.

A veteran leader in the environmental movement, Carl Pope is the former executive director and chairman of the Sierra Club. Mr. Pope is co-author -- along with Paul Rauber -- of Strategic Ignorance: Why the Bush Administration Is Recklessly Destroying a Century of Environmental Progress, which the New York Review of Books called "a splendidly fierce book."

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