Energy efficiency expert Amory Lovins, co-founder of a Colorado-based think tank whose vision is a world without oil by 2025 and co-author of Winning the Oil Endgame: Innovation for Profits, Jobs and Security, believes the United States can reduce, even eliminate, its escalating consumption of oil.
Lovins, in speaking at the Division of Environmental Geosciences luncheon at the recent Annual Convention in Houston, said it’s possible by building energy efficient, ultra-light automobiles and aircraft, by substituting biofuels for oil, by retrofitting the electrical power industry and its gas end users, and by redesigning its key industrial sectors.
Lovins challenged the DEG audience to picture an American economy in 2025 that’s not held hostage by the global commodity price of oil or by the handful of countries that produce that oil. Further, he described how the United States could prosper on all fronts – corporate profits, jobs and national security – while eliminating its geopolitical dependence on oil.
“The prize is enormous,” Lovins said of the potential change, “a world that doesn’t depend upon or fight over oil. Public policy must support – not distort – this change.”
How Big Is the Prize?
Americans have doubled the efficiency of using oil by a factor of two since the oil crisis in the 1970s, which equates to a two-fold increase in the GDP per barrel.
According to Lovins, an investment of $180 billion over the next decade will eliminate the United States’ oil dependency, revitalizing its key industrial sectors and saving $130 billion gross ($70 billion net) every year by 2025.
While this investment is not insignificant, Lovins suggested the United States’ economy easily pays that much – with a zero rate of return – every time the price of oil rockets upwards, money that goes to OPEC nations instead of into infrastructure at home.
Lovins questioned the wisdom of purchasing oil from countries that spawn terrorist activities against the United States.
But Lovins doesn’t believe that national oil security requires new exploration and development activities on the home front. Oil and gas development of the Arctic National Wildlife Refuge, situated on Alaska’s environmentally fragile coastal plain, he said, “is a complete show stopper with terrible economics and ugly geology.
“The Trans-Alaskan Pipeline is a national security risk,” he added, “vulnerable to accident, malice and terrorist attack.”
Lovins pointed to technological developments in energy efficiency in China, India and elsewhere in Asia.
“Energy is the top priority in China’s development strategy,” he said. “If you don’t make energy efficiency the cornerstone of your development strategy, then the supply chain will kill you and the capital requirements will kill you.
“Our (the United States) energy policy is 180 degrees off of market principles – we need to let energy compete fairly,” he said. “We’re spending our technology efforts on the wrong stuff. Unfortunately, our country keeps setting the wrong example.”
That said, George W. Bush may have recently taken a page from Winning the Oil Endgame … In his State of the Union Address last January, Bush said:
“We have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.”
Added Bush, “By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy, and make our dependence on Middle East oil a thing of the past.”