Rogue Nation: American Unilateralism and the Failure of Good Intentions (2003) (12 page)

4

Running on Empty

Twelve yards long, two lanes wide Sixty-five tons of American pride Canyonero, Canyonero!

—The Simpsons (parody of an SUV advertisement)

O
n Sunday, March 10, 2002, the lead story in the day’s papers and on the talk shows was Afghanistan. The Taliban had been deposed, and the chase was on to catch Osama bin Laden in the jaws of a giant trap, known as Operation Anaconda, being sprung in the rugged Tora Bora mountains. About half the front page of the
Washington Post
was taken up by a photo showing massive bombing of mountain redoubts, along with a story detailing the progress of the operation and noting that American casualties so far totaled fifty-eight. It was an important, must read, breaking news story.

Less noticed was an article, buried on page A12, about that week’s Senate debate on applying gasoline mileage requirements to sport utility vehicles (SUVs). These requirements had first been introduced for cars in 1975, after the oil shocks of 1973-1974, when the average U.S. auto got 13 miles per gallon of gas. Known as the CAFE standards, they required that the fleet of new passenger cars produced by U.S. makers achieve an average fuel economy of 27.5 mpg by 1985 and that light trucks average 17.2 mpg by 1979.
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The initial result had been dramatic. Within seven years, the average mileage of new American cars climbed from 13 mpg to 25.1 rnpg and hit a peak of 26.2 mpg in 1987.
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Since then, however, sport utility vehicles and pickup trucks had grown so popular as everyday family vehicles that by 2002 they made up more than half the total number of vehicles sold. While very profitable for auto producers, whose profits are much higher on SUVs and trucks than on cars, this change in the market played havoc with fuel economy. By the time the Senate took up the question, the average gas mileage of new vehicles had slid to 24 mpg and American gasoline consumption and oil imports were soaring. In an effort to correct this situation, the Senate was considering a bill to extend application of the standards from cars to SUVs with the goal of increasing total fleet mileage by 3 mpg, to about what it had been in 1987.
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The
Post
article quoted Senate Minority Leader Trent Lott as saying that raising the standard would be unacceptable because ‘this is still America,’ and if it happened he wouldn’t ‘be able to drive my grandchildren around the ranch anymore.’
 4 
This is a tragedy that would tear at the heart of every American were it not shamelessly exaggerated. Still, no one seems to have seen the connection between Lott’s comments and the Operation Anaconda story on the front page. How many lives are we willing to pay for a barrel of oil and a spin around the ranch in an SUV? It’s an unfair question, of course. But it’s hard to escape the conclusion that Lott thinks gas should be cheap because this is America and Americans have a right to cheap gas. That the material and human costs of Operation Anaconda are, in part, a result of that sentiment is kept well hidden.

One sees few SUVs in London or in the rest of Europe and Japan. One major reason is that in all those places gasoline at the pump sells for between $3.97 per gallon (in Japan) and $4.66 (U.K.).
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It costs much less on a pre-tax basis. In fact, the United States has the highest pre-tax price at $1.20 per gallon, compared with an average of about $1.10 in the other developed countries.
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But whereas the United States adds only about 38 cents in taxes, the rest of the developed world imposes a tax over six times larger.
 7 
Not surprisingly, Europe and Japan produce cars that get about 34 mpg – or ten mpg better than the U.S. fleet.
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If U.S. vehicles got the same fuel economy as European and Japanese vehicles, the United States would need to import no Persian Gulf oil at all.

Nor is the difference in energy efficiency limited to cars and trucks. You can go from Brussels to Paris on the TGV (Train a Gran Vitesse, or high-speed train), the European improvement on Japan’s famed bullet trains, in about an hour and twenty minutes. The distance is about the same as between Washington and New York, yet the ride takes about half as long as the Amtrak Metroliner. As a result, many more people take the train from Paris to Brussels and back than fly. By building a modern, high-speed rail system, Europe has dramatically reduced the need for energy-inefficient flight in favor of extremely efficient rail.

Just as gasoline is more expensive outside the United States, so is electricity, and not surprisingly U.S. per capita electricity use is double that of Japan, the next highest user.
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In fact, the Japanese have put such emphasis on energy efficiency that they can produce a dollar of GDP with less than half the energy of the United States.
 10 
Of course, Japan is a small country, with most of its people and industry located in a narrow strip between Tokyo and Osaka, so distances and climate variances are less than in the United States. But in the European Union, a large area with great climactic and topographical differences, a population larger than that of the United States, and a similar-sized GDP, the story is the same. To create the equivalent of $1 of GDP, Europeans use only about two thirds as much energy as the Americans.
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If America had the same energy efficiency as the EU, it could not only do without oil imports from the Persian Gulf, it could do without oil imports period. This would cut $100 billion a year off the U.S. trade deficit, stop the flow of U.S. money that gets recycled through oil-producing countries in the Middle East to fund terrorism and the spread of radical Islam, and greatly reduce the need for U.S. military deployments in the Persian Gulf. These deployments, which cost $60 billion annually, raise the real cost of Gulf oil to about $200 per barrel.
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Many observers around the world wonder why America isn’t more serious about conserving energy purely in its own interest. As I will explain, the reason has to do with America’s sense of entitlement. It also has to do with our love of personal freedom. But the price of that independence is a dependence that has made us vulnerable. In turn the vulnerability Jias led to war, destruction, and death, and finally to a hint of soul searching.

BUBBA’S BIRTHRIGHT

T
he standard definition of a ‘Bubba’ is a man who feels it’s his God-given right to drive his pickup truck down the highway at 80 miles an hour with the windows open, the CD player and air-conditioning both on at full blast, and an open can of beer in his lap. While he’s generally thought of as a white man from the South, the truth is that Bubbas can be found from Connecticut to California among all races and both genders. There’s some Bubba in all of us Americans (full disclosure: I myself drive an SUV). Leave aside the stereotype’s non-essentials for a moment – the music, the beer can, the large dog in the passenger seat, the hunting rifle in a gun rack behind the rear window, the patriotic bumper stickers – and pay attention to the overpowered and over-accessorized vehicle (mostly provided by American industry), the road (provided by American government), and the sense of entitlement (provided by American history). Where do these things come from, and where are they taking us?

We often draw a picture of America as a country that started poor and through hard work and enterprise made itself into the most developed of nations. In truth, however, America was rich almost from the start. The technology of Europe in the seventeenth century was fully available to the settlers in the New World. In particular, the primary sources of energy at that time were wood, wind, and water, and nowhere was there more wood, wind, and water than in the new colonies. The Pilgrims and other early settlers had discovered the Saudi Arabia of their day, for just as Saudi Arabia has the biggest and least-costly energy reserves today, so at that time did North America. So from its birth the nation enjoyed cheap energy, and future generations came to assume that as a birthright.

When joined to the techniques and tools the settlers brought with them from Europe, this cheap, plentiful energy powered a surge of economic growth that quickly enabled living standards in the New World to match or exceed those of the old countries. By 1820, the United States was the fourth-richest country in the world with a per capita GDP (in 1990 dollars) of $1,257. It trailed only the Netherlands at $1,821, the United Kingdom at $1,707, and Belgium at $1,319. France was about the same as the United States, while Germany and Italy were well behind at about $1,100, and Japan was at about half the U.S. level. In average life expectancy, the United States was third at 39 years, trailing Germany’s 41, and the U.K.’s 40.
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As the nineteenth century and the industrial revolution progressed together, the world’s energy sources shifted from wood, wind, and water to a new era of steam, coal, and whale oil. Once again, the United States was the Saudi Arabia of the age. U.S. coal production rose from negligible levels in 1820 to almost 200 million metric tons by 1900.
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The whaling fleet, which began in New Bedford, Massachusetts, in 1755, hit a peak of 329 ships in 1857.
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This plentiful and inexpensive energy was a major factor in giving the U.S. economy the fastest growth rate among the world’s major economies in the mid-nineteenth century. By 1870, the United States, was poised to more than double its standard of living over the next forty years to take over the top spot in per capita GDP.
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Its rise would be greatly aided by what had been found a few years earlier at Oil Creek, near Titusville, Pennsylvania.

Seepages of a gooey black substance from the earth had been recorded as far back as 3000 B.C. in Mesopotamia, at Hit on the Euphrates, not far from Babylon and present-day Baghdad. Known as bitumen, it was used as a building mortar in the walls of Jericho and Babylon and very likely covered the seams of Noah’s ark and Moses’ basket to make them waterproof. It was also used for road building, lighting, medicine, and, of course, war. Homer notes in the
Iliad that
the Trojans shot unquenchable flames over the ships of the Greeks. The Persians used fire in their conquests, and the Byzantines used Greek fire, a mixture of bitumen and lime that caught fire on contact with water. Petroleum and its applications were largely forgotten in the West after the fall of Rome. By the 1850
s
, however, kerosene derived from crude oil found in Galicia and Rumania was used for lighting in Vienna and just being introduced in the United States.

It was this development that made the seepage of oil into the springs and salt wells around Oil Creek so interesting to the New York lawyer George Bissell and a small group of investors he had gathered. For some time the oil that coated the creek’s surface had been gathered by skimming or by wringing out rags that had been soaked in the oily waters. The tiny supply of oil thus gathered was used mostly to make medicines, but Bissell’s group saw their fortune in selling it as a competitor to kerosene and whale oil for lamps. Skimming and soaking could not produce nearly the volume of the product they envisioned selling, however, nor would digging do. To get at the source of the oil economically, they decided to adopt the techniques then in use for drilling salt wells. Work began in the spring of 1858, and after a year of exhausting work, there was absolutely nothing to show for it. With growing despair, the group pushed the work through the summer until late August. Then, with money running out, the investors sent a final money order to their drilling overseer, ‘Colonel’ E.L. Drake, along with instructions to halt operations. By Saturday afternoon, August 27, 1859, when the drill fell into a crevice, Drake had not yet received the letter and work was halted only for the rest of the weekend. On Monday, still without the letter, Drake arrived at the site to find his drillers standing over tubs and barrels filled with black liquid. The age of oil had dawned.
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The extent of the American energy bonanza was not clear at first. For a quarter century the industry was fragile, uncertain, and wholly dependent on the oil fields of Pennsylvania. In 1885 the Pennsylvania state geologist warned that oil was ‘a temporary and vanishing phenomenon,’ and a top executive of Standard Oil became so concerned about declining production that he sold some of his shares in the company at a discount of 25 percent. No sooner had he done this than new oil was discovered at Lima, Ohio, in an oil field that straddled the Ohio-Indiana border. This field was so productive that by 1890 it accounted for a third of total U.S. production.

For the next sixty years, all concern about adequate supplies vanished as more giant oil fields were discovered. In 1893, the citizens of the small Texas town of Corsicana began drilling new wells to augment their dwindling water supply. Instead of water, however, they hit oil. This was just a prelude. In the fall of 1900, drilling began on top of a salt dome hill near Beaumont, Texas, called Spindletop. By Christmas, some oil had showed, and it was estimated that the well might produce fifty barrels a day. Not bad, but nothing like what was about to happen. After taking off for Christmas, the drillers resumed work on New Year’s Day and on January 10, 1901, the earth exploded, sending the drill pipe, rock, and oil hundreds of feet into the air. It was the first gusher in the United States, flowing at a phenomenal seventy-five thousand barrels a day. Others followed: Signal Hill in California, Greater Seminole in Oklahoma, and then the granddaddy of them all, Dad Joiner’s Black Giant in east Texas. America was truly the Saudi Arabia of this era. How could anyone doubt that cheap energy was indeed an American birthright?

The trouble, in fact, was too much oil. Every time a new gusher came in, prices collapsed and threatened producers with bankruptcy. This problem had arisen soon after the first strikes at Oil Creek. Oil that was selling for $10 a barrel in early 1861 was down to 10 cents by the end of the year.
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By gaining control of distribution and transport through his Standard Oil of New Jersey trust, John D. Rockefeller was able to take advantage of low prices to make huge profits and also to bring a measure of order to the market. But the vast Texas fields, particularly the Black Giant, overwhelmed even Standard Oil. Oil that had sold in Texas in 1926 for $1.85 a barrel was going for as low as 6 cents a barrel by the end of May 1931. Even the largest producers could smell bankruptcy, and they cast about for a way of limiting production and stabilizing prices.