America finally has a smart leader, not a good old boy from Texas and his sidekick who were in the hip pockets of the Saudis and oil interests at home and abroad. Yesterday's announcement of dramatically enhanced fuel efficiency standards on vehicles recognizes that environmental, economic, trade and foreign policies converge and can be addressed all at once.
To wit, curb America's oil addiction, and you balance the books, trade, save the environment and, possibly, Detroit from itself.
Here's what President Obama announced yesterday and below that is what I wrote last summer which includes important background to this issue.
"In the next five years, we're seeking to raise fuel-economy standards to an industry average of 35.5 miles per gallon in 2016, an increase of more than eight miles per gallon per vehicle. That's an unprecedented change, exceeding the demands of Congress and meeting the most stringent requirements sought by many of the environmental advocates represented here today," he said.
"As a result, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. Just to give you a sense of magnitude, that's more oil than we imported last year from Saudi Arabia, Venezuela, Libya, and Nigeria combined," he added.
The usual suspects from the right dubbed this a US$1,300 car tax, the estimated increase in costs for a small efficient car - totally ignoring the US$2,800 in fuel costs saved based on current gasoline prices.
Here's my 2008 blog/column on the issue:
"America's oil addicts need rehab now.
"The United States is the world's third biggest oil producing nation behind Saudi Arabia and Russia, but you wouldn't know it given its huge oil import tab. This year, at $130 a barrel, oil imports could total $578 billion, equivalent to 81.5% of 2007's trade deficit of $708.5 billion for imports of every kind.
"The Saudis produce 10.72 million barrels daily, Russia, 9.67 and the U.S. 8.37 million. But consumption is 20.59 million barrels a day, making net imports 12.2 million a day. This is more than Germany, Japan, France and Italy import.
"We [I'm Canadian and American] Americans are spoiled and greedy oil users and spill or waste more than any 20 undeveloped countries. Despite the whining about $4-a-gallon (at peak oil prices), Americans pay dramatically less for gasoline than do Canadians at $6 a gallon or Europeans at up to $11 a gallon.
"Instead of seeing our wasteful ways as the problem, the public and politicians are externalizing blame and looking for scapegoats.
"But the Bush regime's intelligence has been about as smart when it comes to comprehending the global supply-demand issue for oil and all commodities as it was unearthing weapons of mass destruction in Iraq.
"So America needs an energy intervention right now which will have added benefits such as helping to clean up the environment, slash trade deficits, reduce dependency on nasty foreign regimes and finance research into new technologies.
"Here is a simple, sensible 21st Century energy policy:
1. Mandate increased fuel efficiencies of at least 10 miles per gallon for every vehicle and within two years require all new cars sold in the U.S. to be hybrids. Measures should be considered, such as subsidies, to help retire the nation's gas guzzlers more quickly. Why? If all vehicles in the U.S. were 10-miles-per-gallon more efficient, the country would cut oil consumption by four million barrels daily, eliminating $189.8 billion, or 27%, from the total trade deficit.
2. But another measure is essential in tandem with fuel efficiencies: an increase in gasoline taxes. This is because studies show that fuel efficiencies don't necessarily decrease consumption but increase it because the same money can buy more tankfuls. So the combination of fuel efficient cars, and more expensive gasoline, would result in lower consumption.
3. Higher gasoline taxes, call it a n energy research levy, could be earmarked for research into alternatives.
In other words, all Americans have to do is live like Europeans who use smaller, lighter and more efficient vehicles less often.
These prices are not temporary nor are they a conspiracy or a bubble. Supplies from Alaska, the North Sea, Mexico and China have been declining dramatically as demand around the world soars.
John McCain's remedy is to chop gasoline taxes which will make matters worse. Plentiful and relatively cheap gasoline has led the United States into this predicament in the first place by allowing Detroit to hook the nation on SUVs, pick-up trucks and heavy luxury vehicles.
Obama has a grasp of what's needed. He's rejected the tax cut gimmick, recognizes the need for revenue to do research and connects cheap oil with pollution and the dangerous dependency on hostile and rogue regimes around the world."
Add to that zoning that dramatically enhances urban densities and stops sprawl; better public transportation and a program to subsidize people to trade in their guzzlers for fuel efficient vehicles, underway in many European countries. These and other measures may help cure what ails America and, indirectly, Canada too.
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