Lurking behind the historically high price of oil now placing a damper on our entire economy is the real problem: the sheer volume of oil that we have to import from other countries to keep our wheels turning.
After 30 years of crises and warnings, we still depend on the kindness of others for our basic fuel. And instead of ending that threat, our policies are extending it to another vital energy source —- natural gas.
Natural gas has become America’s fuel of choice throughout our economy —- factories, office buildings, industrial processes, even the production of electric power. We are using it much faster than we are producing it. As a result, we are having to import more and more of it from other countries —- including the same unpredictable Persian Gulf states that supply our foreign oil.
This suggests that we are mortgaging our future to Saudi Arabia, which holds two-thirds of the world’s oil reserves and enormous supplies of natural gas that can be liquefied and transported by tanker. The Saudi royal family doesn’t just control the world’s price and supply of oil; increasingly, it has a say in the price of liquefied natural gas (LNG).
Although imports of LNG account for only 2 percent of the natural gas Americans consume, the United States is now on its way to becoming heavily dependent on LNG. By 2010, imports of LNG from Saudi Arabia and other distant countries will provide 10 percent or more of the natural gas we use for home heating, industrial processes and electricity production, according to estimates made by the U.S. Energy Information Administration.
Yet the presidential candidates are assiduously avoiding the thorny security issues related to our continuing dependence on the Middle East for our energy supplies. They should not be so complacent. As events are showing us almost every week, the Saudi rulers are coming under attack and might not be able to avoid the upheavals that are roiling much of that region. Investors on Wall Street rightly fear that terrorism or even a political revolution in Saudi Arabia could drastically change the international relationships that precariously balance the world’s demand and supply of petroleum products. Even a single terrorist attack on Saudi oil fields or distribution channels could have disastrous effects on the economies of oil-importing countries.
The future need not be this way —- but we have to act. A sensible energy policy would encourage the increased use of clean electricity to provide large amounts of reliable power for electrified rail and rapid transit, limit the use of natural gas for electricity production and establish a timetable for replacing the internal combustion engine with hydrogen-powered fuel cells.
One key to this policy is the generation of large amounts of electric power needed to produce the hydrogen fuel that does not add to our pollution and further threaten global climate change. That means we will need a growing amount of nuclear power, based on new reactor designs that are simpler and less expensive. Nuclear plants do not emit air pollution or greenhouse gases.
If we care about our heavy dependence on Saudi Arabia and other unpredictable countries for oil, if we truly care about protecting our society from serious economic disruptions, we must now begin to take steps toward reducing our energy imports and to focus our efforts on expanding and creating meaningful alternatives.
A transition will take many years —- we need to begin now.
Sullivan S. Marsden is professor emeritus of petroleum engineering at Stanford University.
