Oil Conservation

President Bush noted in the State of the Union that he wants to reduce America's oil consumption by 20% over the next decade.

Unfortunately, if this happens (highly unlikely in my book), it will be the result of inefficient subsidies and grants to well-connected lobbying groups - much like the Clean Air Act focused lots of attention on expensive requirements for vehicles like the catalytic converter, disallowing the new cleaner engines produced by Honda.

One reason I do not like heavy-handed government interaction is that it tries to accomplish in a single stroke what may best be accomplished along a variety of paths. The 20% target is not likely to be much different. The government inherently can only focus its efforts in so many directions at once, and it will do so here through inefficient means of using tax revenue to provide grants and subsidies to those who lobby to spend it on them - while spending still more of that revenue in the administration of the new programs.

May I make a suggestion? If you want oil consumption to go down - raise the price. First, eliminate any subsidies given to oil producing companies, refineries, gas stations, etc. If resulting price increases are insufficient to raise the price enough to cut consumption, then levy a tax on oil.

As we observed during 2006, even short-term jumps in the price of oil modify the behavior of millions of Americans without a single person having to tell them to consume less. Some will buy more efficient cars. Some will decide that the bus or a bicycle isn't such a bad alternative.

If it is clear that such increases are long-term, some may make bigger decisions with those prices in mind. I might move 30 miles closer to work, saving 2 gallons of gasoline each day, 10 per week, 43 per month and 520 per year.

Car companies will invest more into efficient and/or plug-in Hybrid cars, because there will be a huge demand for them. They would need no government tax incentives to do so - because the force of the market would move them that direction.

Solar, Wind, Biomass, Nuclear, Geothermal, and Hydro power would become more attractive, not because of any heavy-handed system of incentives and reimbursements - but because they would be more cost-competitive.

The consumer would (I suspect) save more in this path because while oil would be more expensive, the consumer has the ability to choose how best to respond to that cost. The government does not need to waste millions creating a new bureaucracy to administer or police its new programs.

Final concern, almost tangential. Hydrogen and ethanol are highly desired fuels because they emit no/less CO2 as a result of combustion. But they do emit something. Right now we consider it harmless. But H2O is a decidedly more potent greenhouse gas than CO2. My long-range prediction? CO2 controls won't do squat to address global warming, because we will trade a lesser problem for a greater one.