A war against OPEC’s influence
In our view, it is a strategic imperative for the US to dramatically reduce its dependence on OPEC oil’s high, manipulable prices (the blackmail potential of an inelastic supply curve of a vital resource), and the resultant political influence of the oil exporters. For one thing, the US must be free to speak the truth about regimes whom we call “friends” but would probably call something quite different if they held no important leverage over the American economy. James Woolsey describes some steps on the road toward this reduced influence of our adversaries over us:
electricity is about to become a major partner with alternative liquid fuels in replacing oil. The change is being driven by innovations in the batteries that now power modern electronics. If hybrid gasoline-electric cars are provided with advanced batteries (GM’s announcement said its choice would be lithium-ion) having improved energy and power density–variants of the ones in our computers and cell phones–dozens of vehicle prototypes are now demonstrating that these “plug-in hybrids” can more than double hybrids’ overall (gasoline) mileage. With a plug-in, charging your car overnight from an ordinary 110-volt socket in your garage lets you drive 20 miles or more on the electricity stored in the topped-up battery before the car lapses into its normal hybrid mode. If you forget to charge or exceed 20 miles, no problem, you then just have a regular hybrid with the insurance of liquid fuel in the tank. And during those 20 all-electric miles you will be driving at a cost of between a penny and three cents a mile instead of the current 10-cent-a-mile cost of gasoline.
Utilities are rapidly becoming quite interested in plug-ins because of the substantial benefit to them of being able to sell off-peak power at night. Because off-peak nighttime charging uses unutilized capacity, DOE’s Pacific Northwest National Laboratory estimates that adopting plug-ins will not create a need for new base load electricity generation plants until plug-ins constitute over 84% of the country’s 220 million passenger vehicles. Further, those plug-ins that are left connected to an electrical socket after being fully charged (most U.S. cars are parked over 20 hours a day) can substitute for expensive natural gas by providing electricity from their batteries back to the grid: “spinning” reserves to help deal with power outages and regulation of the grid’s voltage and amperage.
Once plug-ins start appearing in showrooms it is not only consumers and utility shareholders who will be smiling. If cheap off-peak electricity supplies a portion of our transportation needs, this will help insulate alternative liquid fuels from OPEC market manipulation designed to cripple oil’s competitors. Indian and Chinese demand and peaking oil production may make it much harder for OPEC today to use any excess production capacity to drive prices down and destroy competitive technology. But as plug-ins come into the fleet low electricity costs will stand as a substantial further barrier to such market manipulation. Since OPEC cannot drive oil prices low enough to undermine our use of off-peak electricity, it is unlikely to embark on a course of radical price cuts at all because such cuts are painful for its oil-exporter members. Plug-ins thus may well give investors enough confidence to back alternative liquid fuels…
We would think that a Presidential candidate who promised a new Apollo program to provide “energy independence that’s cheap” would be riding an issue attractive to both the Left and the Right for different reasons. Why has this not happened yet?