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Oil amnesia

Will interest in alternative fuels stick around this time?

Chicago Tribune
December 18, 2008 at 10:07PM
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WASHINGTON - Breaking America's foreign-oil addiction was all the rage on Capitol Hill when gasoline cost $4 a gallon. Now that it's under $2 and falling, history suggests that enthusiasm for alternative fuels and more-efficient cars will subside. It did that in the mid-1970s and again in the '80s and '90s.

But this time could be different. A confluence of factors that didn't exist or played lesser roles in previous "energy independence" efforts has congressional leaders and environmental groups thinking that major action to reduce oil imports and replace fossil fuels may still be possible. The new elements in the equation include increasing public anxiety over global warming, broad enthusiasm for making sure the coming stimulus package has a "green" tinge and repeated vows for action from President-elect Barack Obama.

Also this time, many consumers and oil company executives appear convinced it won't be long before high fuel prices come back to stay.

"In the past, when the [prices] of oil and gas have dropped, it has caused us to lose our focus" on energy independence, said Sen. Jeff Bingaman, D-N.M., who heads the Senate Energy and Natural Resources Committee. "I don't think that'll happen this time."

Recent opinion polls and exit surveys from the November election back him up, but perhaps nothing illustrates the change in attitudes better than a survey of 52 high-level oil and gas executives released last week by the auditing and consulting firm Deloitte.

It found that less than a quarter of those executives expect oil and gas to be Americans' cheapest energy source in 25 years, and three-quarters say it's a good idea for the country to turn away from fossil fuels for transportation.

That's a "sea shift" for the industry, said Joseph Stanislaw, a Deloitte senior adviser and longtime oil and gas analyst. "People are saying, 'prices go up and prices go down,'" he said, "but something's broken here, and we've got to fix it."

Americans have worried about their dependence on foreign oil since the early 1970s, when Arab oil producers stunned the developed world by halting oil shipments.

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President Richard Nixon offered a plan for freeing the nation from dependence on imports within a decade. But when the embargo was lifted a year after it began, supplies picked up, prices fell and Nixon's Project Independence faded with a whimper.

The cycle repeated for the next 30 years. When oil prices spiked, lawmakers tried to boost wind, solar and other alternative power sources. When prices fell, so did the support.

Today the United States imports nearly two-thirds of its oil, a 50 percent increase from the Nixon years, even though every president in that time has pledged to wean the nation from foreign energy.

Obama, in announcing his energy policy team Monday, noted how presidents for decades had failed to curb the nation's oil addiction.

"This time has to be different," he said. "This time we cannot fail. Nor can we be lulled into complacency just because, for now, the price of gas has fallen below $4 a gallon."

Oil prices hit records over the summer, fueled in part by explosive demand in nations such as China and India. Americans cut back on driving, and small-car sales rose. Then the global economy slipped rapidly into recession, energy demand ebbed and prices sank again.

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Instead of backing off his alternative energy push, though, Obama doubled down. Since the November election he has promised to make so-called green projects a cornerstone of the massive economic stimulus plan that will anchor his early agenda. And he repeatedly pledged swift action to curb greenhouse gas emissions.

His concern over global warming is increasingly shared by voters, a big change from previous decades.

Many Republicans warn that the recession could make climate change legislation -- which analysts predict would increase energy costs -- a tough sell.

Rep. John Shadegg, R-Ariz., who sits on two key energy committees, cautioned Obama to focus on plans to increase efficiency and boost alternative fuels, which would combat warming and oil dependence. "We ought to be looking for strategies that give us a dual benefit," he said.

Environmentalists say the opposite: that lower fuel prices weaken the argument against a cap-and-trade plan for greenhouse gas emissions.

Lawmakers and analysts agree that even with cheaper gasoline, cash-strapped Americans aren't likely to immediately splurge on SUVs or resume the driving habits they learned to curb over the summer. They also agree that prices aren't likely to stay low for long. Once the world economy speeds up, oil demand almost certainly will surge again. As the International Energy Agency declared in a November report: "The era of cheap oil is over."

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about the writer

Jim Tankersley

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