Is this a "Nixon goes to China" moment?
For five years, President George W. Bush has pushed relentlessly for new domestic oil drilling. He's resisted tough measures to improve automotive fuel efficiency. For many Americans, these policies and others were symbolized by the picture of the President strolling hand-in-hand through the garden of his Crawford ranch last year with Saudi Crown Prince Abdullah.
So when President Bush declared in Tuesday's State of the Union address that "America is addicted to oil" and insisted the United States "break this addiction," Washington was thrown into one of its occasional paroxysms of confusion. Did the President mean it? What did these strong words imply? Why was a Texas oil man urging Americans to "move beyond a petroleum-based economy"?
Without doubt, the President's rhetoric went beyond any he'd used previously. The President has often called for reducing dependence on foreign oil, but his exhortations on energy policy had never included the term "addiction," with its powerful emotional resonance and strong association with tobacco and drug use. The phrase "addicted to oil" is not new, but it implies a judgment about the dangers of oil use that has—historically—prevented most oil state politicians from uttering it.
Indeed, a decade ago the phrase "addicted to oil" was used mostly by those on the political left. In the past few years, a growing number of national security hawks have also begun speaking in such terms. Polling data suggests that large majorities of the American public believe the United States is too dependent on foreign oil—in particular oil from the Middle East. The President's rhetoric in large part reflects this consensus.
Yet the President's strong words were not matched with bold policies. After the attention-grabbing sound bite on oil addiction, the President called meekly for a "22-percent increase in clean-energy research at the Department of Energy." Seldom has soaring rhetoric been deflated so quickly with budget specifics.
Indeed soon after the President's speech, the White House released a fact sheet explaining the elements of its new "Advanced Energy Initiative." This Initiative, according to the White House, will consist of $236 million in proposed increases for six clean energy programs in FY 2007. This is hardly a transformational new program.
Furthermore, three of the programs in the Advanced Energy Initiative relate to electricity generation and are therefore essentially irrelevant to the problem of oil dependence, since only a tiny fraction of our electricity (less than 3%) comes from oil. A fourth program focuses on hydrogen fuels, with a payoff several decades away.
It turns out that only two items in the "Advanced Energy Initiative" will help to break our oil addiction in the next generation—a $59 million proposed increase for a Biorefinery Initiative and $6.7 million proposed increase for research on batteries. These proposals are fine as far as they go, but utterly unequal to the task.
Unfortunately, the President further signaled a lack of seriousness with his choice of a goal—"to replace more than 75 percent of our oil imports from the Middle East by 2025." Persian Gulf countries provide roughly 12% of the petroleum consumed in the United States. So, the President's goal seems to be to replace roughly 9% of the oil used in the United States today within 20 years—hardly ambitious or enough to "break this addiction."
More fundamentally, changing the flow of oil from one region to another will do little to reduce the strategic vulnerability created by our oil addiction. Oil is a fungible commodity, traded globally. Our vulnerability is created by the near-total reliance of our transportation system on petroleum-based fuels, tight global markets and lack of significant excess capacity anywhere in the world but Saudi Arabia.
Consider, for example, the current Iran crisis. The United States imports no oil from Iran, but our strategic options in responding to Iran's nuclear ambitions are severely limited by Iran's role in global oil markets. Iran is OPEC's second largest oil exporter, and experts predict that interruptions in the flow of Iranian crude to world markets would send prices above $100 per barrel. That has left political leaders around the world weak-kneed in confronting a dangerous situation.
A better metric for evaluating success in overcoming our oil addiction would be the percentage of oil used by the U.S. transportation fleet. Today, that figure stands at roughly 97%. It could be cut to half within a generation, with an aggressive set of policies related to automotive fuel efficiency and alternative fuels.
This brings us to the strongest part of the President's remarks on energy—those relating to ethanol. Certainly the President's reference to ethanol from "wood chips, stalks or switchgrass" was head-turning, and not just because such words rarely find their way into State of the Union addresses. The President gave a full-throated endorsement of "cellulosic ethanol"—a promising biofuel that takes much less energy to produce than traditional corn-based ethanol and, therefore, offers particular promise in helping to replace oil and protect the environment. Cellulosic ethanol has historically been quite expensive, but the President seems to want to change that. His goal—"to make this new kind of ethanol practical and competitive within six years"—is aggressive but achievable with the right government policies and market players.
Fortunately the political coalition behind cellulosic ethanol is broad-based—with farmers, national security hawks and environmentalists, among others, embracing the cause.
Indeed Bush's bold words on oil addiction may be explained more by a desire to make politically popular pronouncements than a desire to lead the nation through fundamental change of its energy use. Bush came to this State of the Union address a weakened President. His goals for the speech seemed to include reassuring his right-wing base and reaching out to centrist voters who will determine his party's fate in the mid-term elections. Strong statements on foreign oil dependence—supported by large majorities of the American public—help him reach out to the center.
Of course more may be at play. The President is plainly animated by a desire to transform the relationship between the United States and Arab world. Breaking the U.S. addiction to oil would do so. It won't be as quick as shock and awe over Baghdad, but the dividends will be real.
For more than 30 years, Richard Nixon's trip to China has been the standard for bold Presidential action that seizes the initiative, surprising allies and opponents alike with a visionary change in direction. It's too early to say whether President Bush's focus on America's oil addiction meets that standard. (As Tom Friedman quipped in the New York Times, it "was more like Nixon goes to New Mexico.") Words in the State of the Union are a start. Now serious and sustained policies must follow.