NEAL CONAN, host:
This is TALK OF THE NATION. I'm Neal Conan in Washington.
Last night in his State of Union address, President Bush said that U.S. reliance on foreign oil threatens our national security and economic interests. He called for the U.S. to slowly wean itself off imported oil with investments in clean, alternative energy and stepped-up domestic oil production. Today Speaker of the House Nancy Pelosi upped the ante and called for energy independence within 10 years.
Democrats and Republicans differ on how to get there, but the goal is almost universal. But many economists say the goal is both unachievable and unnecessary. As energy independence takes on the mantle of conventional wisdom, we ask experts today what that means, what kinds of benefits it might bring, what kinds of sacrifices it might cost, and whether it's a practical goal or popular rhetoric.
Later in the program, historian Henry Louis Gates Jr. joins us to explain how he traced Oprah Winfrey's roots back to Africa and why that matters.
But first, a look at the importance and prospects for energy independence. If you work or invest in the energy industry, do you think the U.S. can achieve energy independence as a practical goal? If you're a consumer, what sacrifices are you willing to make for U.S. energy independence? Our number: 800-989-8255. That's 800-989-TALK. E-mail is email@example.com.
And joining us first is Vijay Vaitheeswaran, a correspondent for The Economist magazine and author of the book "Power To the People: How the Coming Energy Revolution Will Transform an Industry, Change Our Lives, and Maybe Even Save the Planet." He's with us from The Economist studios in New York City. Nice to have you on TALK OF THE NATION.
Mr. VIJAY VAITHEESWARAN (Correspondent, The Economist): Great to be here.
CONAN: And let's begin with the president. A year ago, President Bush said the U.S. needs to end its addiction to oil but not a great deal happened in the aftermath of that. Energy independence got more time in the speech this year. Do the president's ideas that he spelled them out last night, do they look realistic to you?
Mr. VAITHEESWARAN: Well, certainly in terms of aspirations we're seeing loftier goals. The real question will be implementation. Will the president work with Congress to put some teeth on some of his goals, such as changing the fuel economy rules for cars, trying to reduce gasoline consumption going forward. And also the things that he left out. He sort of tipped his hat in the direction of climate change, a very big concern right now.
Mr. VAITHEESWARAN: But the administration has historically been very opposed to any action that has real teeth. So it's more of a question of let's look at the details.
CONAN: Before we get excited about the expanse of the rhetoric. Nevertheless, CAFE standards would be important if they could be increased significantly.
Mr. VAITHEESWARAN: The fuel economy standards, the so-called CAFE standards, it would be significant change if in fact the administration were to follow-up on its proposals. But again you have to look at some of the fine print. The administration wants to keep the authority with the branch of the White House, not Congress dictating the specific amounts of change in future. That sounds like a technicality, but in fact that could end up being a loophole through which we don't end up raising standards very much. If, for example, automobile companies were to complain, SUVs and light trucks become popular once again, the administration would have the freedom not to raise those standards, for example. So the president didn't commit to specific changes that would be enacted by Congress, which is what advocates of CAFE reform want.
CONAN: As we look at the history of this idea - energy independence - it goes back I guess to the first oil shock in the Nixon administration. And since President Nixon declared this to be a goal, a program he set out in a State of the Union message that was going to be like his version of John Kennedy's get a man on the moon by the end of the decade, we've certainly gone a long way in the opposite direction since then.
Mr. VAITHEESWARAN: It's certainly true. We import more oil now than we did back at the time of the oil shocks, so we haven't gotten closer to "energy independence," quote, unquote. But I frankly am very, very skeptical and rather suspicious whenever I hear anyone in Washington use that phrase energy independence. It's often an excuse for all manner of subsidies and other kinds of mischief depending on one's persuasion, whether you're on the left or the right, whether you're close to particular lobbies (unintelligible)...
CONAN: So whether you want to subsidize wind power or more drilling for natural gas.
Mr. VAITHEESWARAN: Sure, exactly. It's like motherhood and apple pie. Who could be against energy independence, right? Well, actually, if you actually look at the real details, what you find is one stunning fact. That is we use so much oil - we're the world's biggest consumer of oil. That's really the heart of the energy independence question. We consume maybe a quarter of the world's oil every day, almost 50 percent of the world's gasoline everyday, but we sit on top of only three percent of the world's proven reserves. What that means is as long as we continue using gasoline at all to power our cars, we're not going to be energy independent. The only way to really get there if we're serious is over the long-term to find a way to move our cars and buses that doesn't involve oil, and that's not what's part of the president's speech.
CONAN: Oil of course is not the only energy source this country uses. More and more, for example, power plants are going to rely on natural gas. And again, that's going to have to come from overseas as well.
Mr. VAITHEESWARAN: Natural gas will almost certainly be imported from overseas. But we have other kinds of electricity sources. We have lots of coal in this country. We have plenty of renewable resources. The president has aggressively pushed for new nuclear plants. So if you were to set energy independence as a goal, we might be able to get there through domestic resources for electricity. Again, the renewables and the nuclear would probably be the way to go. But I would question the goal in and of itself. What's the point of energy independence if it actually raises the cost of energy and ultimately is a halfway house? If people say we can get a little more energy independence, that doesn't actually do much. The thing to understand about the global energy markets is that it's every barrel of oil, for example, or an LNG ship carrying natural gas are intimately linked. It's a fungible global market for oil. And so we're really talking about a world of interdependence, not independence.
CONAN: Yet people talk about this as a national security issue. Our oil on which we are - our economy relies and so much else could be cut off. That's why we need to have resources within our national control that could do this for us.
Mr. VAITHEESWARAN: I think the goal is the right way to go, but my questioning is these small baby steps that we take towards it. Unless we actually have a comprehensive step away from oil, which again is the linchpin of the energy problem. It's the one that has the geopolitical problem in the Middle East where two-thirds of the world's oil is concentrated in the hands of just five countries - Saudi Arabia and its neighbors. It's the one that has the potential to create a global economic shock. Whoever heard of an economic shock due to windmills or to coal? It's not going happen, right? It's oil that's the problem. And of course the global warming contribution is there, too.
We need to get off of oil altogether if we're going to have a serious conversation about energy independence. And what I worry about, again, whether it's the left or the right that talks about this, when you use the word energy independence and then use it as an excuse to subsidize one's pet projects, whether that's in the field of corn-based ethanol, which has its own problems, or whether it's to do with coal to liquids, which is something - a way to make a fuel that the president kind of snuck in here under the term alternative fuels. This is why I say one has to be very careful because this very good idea of energy independence is often abused and the devil often gets lost in the details.
CONAN: Well, let's bring another voice into conversation. Frank Verrastro is director of the Energy Program at the Center for Strategic and International Studies here in Washington, D.C. And he joins us from their studios. It's nice to have you on TALK OF THE NATION today.
Excuse me, Mr. Verrastro? And apparently we're having some technical difficulties connecting with the CSIS studios here in Washington, D.C., and we'll get back to Frank Verrastro as soon as we establish what we'd like to call continuity.
But in the meantime, as we continue to talk with Vijay Vaitheeswaran of The Economist magazine, as you rightly say, I mean politicians tend to use this goal of energy independence as a cover for their political projects. But even so, wouldn't moves in the direction the president was talking about - reducing the consumption of gasoline by 20 percent - that's significant.
Mr. VAITHEESWARAN: Yes. Don't get me wrong. It is significant, and it's particularly significant that President Bush, who has not done very much on fuel economy standards, for example, and done worse than little - he's actually harmed the efforts to tackle climate change in my judgment over the last six years - this was a significant speech, one that had more teeth and more concrete numbers than his previous two attempts during his State of Union speeches over the last few years when he has talked about energy policy. So I certainly want to give credit where it's due.
My only point is that when you think about having a meaningful, credible plan on energy, you have to think about linking it to climate - which is intimately linked - and you need to have both short-term measures and long-term measures. Otherwise what we end up with is, just as every time we've talked about energy policy in Congress since the 1970s oil shocks, we get caught up with a few good ideas that look good right now - whether it's synthetic fuels, as we tried to do through government spending back in the '70s and it turned out to be a huge boondoggle that wasted a lot of money; the early attempts at wind power back in the '80s, which again ended up as a wasted effort, a failed effort.
I would say that we don't want to make the mistakes of the past, and some of those lessons are pretty clear. You have clear, long-term goals. You also have very clear signals to the marketplace, that is the investors from the bottom up, whether it's individuals, entrepreneurs, companies. They have the incentive to come up with the solutions rather than supposedly all-knowing men and women sitting in Washington, bureaucrats, picking those solutions because almost always it tends to be the lobbies that have the most influence that end up with the pork barrel money. And that's what 30 years of failed energy policy tells us.
CONAN: Let's see if we get a listener in on the conversation. And this is Chris, Chris joining us from San Antonio, Texas.
CHRIS (Caller): Yes, hi. Thank you very much for taking my call.
CHRIS: I was calling because you had asked as a consumer what would we be willing to do to, you know, conserve on energy and everything else. And I appreciate the goals that are set even if they're not attainable. That's why it would be a goal. But, you know, from a consumer basis - and I travel quite a lot - from a consumer basis, I think that not only the consumer has to conserve, but I think that it's a consumer and a commercial issue.
When you hear of companies that are reaping record oil profit benefits and all that kind of stuff - and these are American companies...
CHRIS: ...and housing subdivisions - I live in Texas, and so, you know, you have a lot places here where it's spread out, as in a lot of places in the country where subdivisions are built up 20 and 30 miles outside the city. You're building things that consumers, even though we're choosing to live there or we're choosing to drive the big cars or not, we don't have public transportation available.
So, you know, from a commercial basis also, from the industry side of it, I think that there's a lot that industry could do to help out the American consumer as well to conserve or, you know, in bringing the prices down. Everything seems to be a domino effect. And when you travel overseas and you see gas at $8 - of course it's in Euros - but at $8 or $9 a gallon compared to here, you feel very lucky. But you still feel kind of ripped off when hear that oil companies are bringing in $3 and $4 billion a quarter or a year in profit, not just in revenue but in profit. And that...
CONAN: Chris, I'm afraid we're out of time. I'm going to have to end you there. But thanks very much for the call. More on energy independence when we come back from a break. This is NPR News.
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CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington.
The president and the Democratic Speaker of the House put energy security near the top of their agendas this week. Today we're talking about energy independence, what that means, what kind of benefits it might bring, the costs and the practicality. At our Web site you can hear an excerpt of the president speaking about energy policy and NPR's Scott Horsley's analysis. That's at npr.org.
We want to hear from you on this issue. If you work or invest in the energy industry, do you think the U.S. can achieve energy independence? Is it a practical goal? Our guest is Vijay Vaitheeswaran. He's a correspondent for The Economist now. And joining us now is Frank Verrastro - excuse me - Frank Verrastro, director and senior fellow of the Energy Program at the Center for Strategic and International Studios. And thanks very much for being with us today.
Mr. FRANK VERRASTRO (Director of Energy Program, Center for Strategic and International Studios): Sure, good afternoon. Sorry about the technical difficulty.
CONAN: That's all right. And as you look at the idea of energy independence, is this a realistic, desirable goal?
Mr. VERRASTRO: I think I echo a lot of the same comments that Vijay made earlier. Right now I think it's more political rhetoric than fact. Certainly in our lifetime this idea of being energy independence would involve huge costs and sacrifices that maybe the public and the politicians aren't ready to make. I would draw a kind of distinction on these unstable sources. You know, 10 years ago we thought Venezuela was a secure source and certainly stable.
Mr. VERRASTRO: They're still our third largest supplier. And we talk about the Middle East frequently, but Saudi Arabia for the last 30 years, largest resource holder in the world and probably the most reliable supplier to the world in terms of global energy.
CONAN: Well, except for Canada, and they're a supplier to us. But as you continue to look at this, you said sacrifices that people might not be willing to make. Give me some examples.
Mr. VERRASTRO: Well, when - if you look at - Vijay's absolutely right. In terms - we're 70 percent self-sufficient right now in the United States. The two big gaps we have are in oil and increasingly in natural gas. On oil, unless we are willing to change the way we move about the country, mail goods, air traffic, barge traffic and such in terms of transportation, the way we commute, our gasoline consumption is unlikely to go down substantially. The contribution from alternative fuels, highly desirable, and fuel efficiency standards, we should have done a long time ago. They should have never been suspended after they were enacted in the '70s. But you really have to change the demand curve, and that'll bring down the imports.
Mr. VERRASTRO: You can't produce your way out of this, but you also maybe can't conserve your way out of this.
CONAN: So you may have to - if you're talking about the price point, you're talking about tax your way out of it.
Mr. VERRASTRO: Well, a tax is one point. I think there's also mandates that people are looking on as fuel efficiency standards. It makes inherent good sense if the only cars that are available are 50 percent more fuel efficient, then today you will save in terms of consummation.
CONAN: You're not going to save in terms of choice, though.
Mr. VERRASTRO: You can probably still save in terms of choice. The real question is how important is it to you if you get to 60 miles an hour in 4.3 seconds or 5.6 seconds?
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CONAN: Well, vital. Let's bring another guest into the conversation. Mindy Lubber is president of Ceres, which is a national network of investors and environmental groups that promotes investment in green energy. And Mindy Lubber joins us from the studio at the European Broadcasting Union in Davos, Switzerland, where she's attending the World Economic Form Conference. And we're sorry to take you away from all of that.
Ms. MINDY LUBBER (President, Ceres): Well, it's delightful to be here. It's a good conversation.
CONAN: And I understand climate change is very high on the agenda there.
Ms. LUBBER: Climate change is jumping off the agenda. It's not only high, it's a key lead topic at more than 17 different sessions. At the opening session, the federal chancellor of Germany said Chicago change needs to be at the top of everyone's agenda. I will tell you that at the business sessions this afternoon when climate change wasn't on the agenda, it got on the agenda because people brought it into every discussion: energy security, the stabilization of the United States, the environment, the economy. It didn't go away from one session to the next, whether or not it was on the agenda or not.
Ms. LUBBER: So your topic tonight is very timely.
CONAN: And I wonder, aside from Americans, do other people from other countries you talked to, do they talk about energy independence?
Ms. LUBBER: They absolutely do. And look at who's here at Davos, at the World Economic Forum. Climate change is jumping off the agenda, including issues like oil security and oil independence at a place where - this isn't a Green Peace conference. This is a conference of 2,000 world leaders, largely business leaders. So the issues we're talking about that used to be marginal are very much on everybody's agenda as economic, leading-edge issues.
And you talk about energy independence. We may not get to a point of complete independence. It's all a measured journey. But there's no question that for the security of the United States of America we ought not to be dependent on foreign countries that are unstable. That is a fairly simple, logical assumption. So we have got to be moving at a far faster pace to develop alternatives to that oil that we're basically importing now from highly unstable countries. And if the president had put much stronger incentives - after all, the market changes when there are market signals, monetary incentives - if there were clear incentives in the State of the Union address last night, we would be better situated to move towards a place where we could develop new technology that will replace oil and that will make us more secure as a country.
CONAN: And let's - we're going to get to the phones in just a minute, but I do want to ask you what kinds of energy are investors putting their money into in terms of as they look to the future.
Ms. LUBBER: Well, they're looking at the things that - some of the things that the president even talked about. They're looking at biofuels. They're looking at wind. They're looking at solar. There are very clear alternatives that we've got to be investing in. The automatable, obviously. We've talked about fuel economy standards.
Ms. LUBBER: We need to make major federal investments, not private sector investments, into the technology that will get our vehicles to a place where they're far more efficient, far more efficient. And we need to reduce our dependence on oil by developing more biofuels, and biofuels that are sensible, not biofuels that are using up our food supply.
Venode Costla(ph), a very well-known investor, in The Wall Street Journal yesterday I think read, said something like we can replace all of our gasoline with next-generation biofuels by 2030. To get there we need the government to spur the market by laying out very clear timelines and goals and providing incentives. We could deal with what are huge problems. It's not going to be energy independence tomorrow.
Ms. LUBBER: But we have to think big. This is like putting a man on the moon. It can be done. But we need the right signals by the federal government, and we didn't get them last night.
CONAN: All right. Thank you, Mindy Lubber. And let's get some callers on the line. This is Mark(ph). Let's go to Mark in Davenport, Iowa.
MARK (Caller): Hey, how are you doing? I'm in a state that's ethanol crazy, and I feel like I'm standing in a courtroom yelling the emperor has no clothes and no one will listen. But ethanol is a scam, and I have Republican senators and Democratic senators in both parties that have bought this scam.
I'm a truck driver for a living. And to complete what your last guest just said, I'm a conservative Republican. I believe global warning's a farce. But I have everything in common with this discussion. I'll tell you why. I burn 600 gallons of fuel a week hauling around unfinished raw materials: steel, aluminum. And if you want to get the energy, not independence, but get you a place for my feeling is productivity so the Americans are not spending so much money on energy, we need the government to step in - and this I'm saying this as a conservative - and follow the airline model for transportation. And that is we need a rail system to take semis off the road.
If you cut down the diesel input of this country - if we're moving steel and aluminum around the country - which these are not high-demand, just-on-time stuff, you got to have it right away. We're spending 600 gallons in my truck alone to move that when the government could step up and build a rail system, develop a transportation system where people and carriers pay into it, we will move oil-using transportation into the electricity mode - which we can build nuclear power plants and fund these rails or power these rail systems with nuclear power - and then the truck is just the point of local delivery. And so we're cutting all that fuel out of an inefficient transportation system that was never designed - I mean there was no design for the interstate system to move the commerce of this country.
CONAN: Well, let's get some responses to that. First, ethanol a scam, Vijay Vaitheeswaran?
Mr. VAITHEESWARAN: Wonderful comments from the caller. You know, ethanol is not a scam in the sense that it does move your car. But if you look at the economics and the environmental impacts of how America makes ethanol - that is we tend to make it from corn because that's what grows well here - it's a pretty inefficient way to do ethanol. The Brazilians have a much more efficient way to do it using sugarcane. But here's the dirty little secret. We have imposed an import tariff that keeps out the Brazilian ethanol, or at least makes it much more economic, so we can protect our corn farmers who anyway get other kinds of subsidies from the rest of us. So the caller is right in the sense that there's something very suspicious, if not scam-like, about it.
What Mindy pointed out, though, was that there is a future for the next generation kind of ethanol, the stuff that is using high-tech biotechnology methods it's called cellulosic ethanol. And that's maybe five to ten years down the road.
So it's not a complete scam, but it's not very good the way we do it. The reason the Midwest lobbies were excited about it, though, is because right now it'll bring a lot of pork barrel funds into the Midwest and is very good for the farm economy. Unfortunately, the caller is partly right about that critique.
CONAN: Frank Verrastro spoke and hub distribution system, rethink the whole way we transport materials in this country?
Mr. VERRASTRO: Well this is kind of the infrastructure question. There is no question that rail for long haul is more efficient than trucks on the road.
You'd have to devise a system that would allow a spoke and hub so that you're changing infrastructure from the way we are, it's kind of like the gasoline delivery system. We have a 185,000 retail stations. If you were to change it, what do you do with those stations, how do you distribute.
Let me just stay on the ethanol for just a second. I think Vijay is absolutely right. And Mindy's comments were also really relevant. When people talk in billions of gallons per year you have to translate that, the reason it sounds like a huge number of billion gallons a year and ethanol is about 65,000 barrels a day in oil. And global consumption of oil is 85 million barrels a day.
So just think of it in context. The final point would be on electricity. A lot of folks talk about other alternatives and the devil again is in the details. What powers your electricity, we haven't engaged in a debate in this country about the future of nuclear or whether we are going to increase the amount of coal plants.
You can't just get there with renewables; it takes a contribution from all energy sources. But it also takes improvement in efficiency and conservation.
CONAN: Yeah, I was going to ask Mindy Lubber about that. Energy independence, or movement toward energy independence, this is not necessarily a green movement, is it?
Ms. LUBBER: Well I'm sitting here just as evidence, and I mentioned it before, at the World Economic Forum, not at an international environmentalist conference. And the issue that has come up on the minds of business leaders more than any other issue since I have arrived here at Davos is climate change and what we're going to do about it and act on it now, not in ten years, not in twenty years.
The place where I would disagree with the caller is that climate change is a farce. There sure are every leading scientist, every leading peer-reviewed study, now nearly the preponderance of business leaders are saying climate change is not only here but it's growing exponentially and that we need to be thinking about changing our energy uses and bringing our carbon footprints down so to speak.
Ms. LUBBER: The amount of carbon we put into the air by 70 percent by the year 2050. That is going to take all of our ingenuity. It's going to take mandatory caps on carbon so we stop producing it. It's going to take more wind energy and far more energy conservation and real incentives.
CONAN: But isn't it going to take nuclear power as well?
Ms. LUBBER: Well we need to look at the whole mix. It may take some nuclear power. But right now we are…
CONAN: Isn't it going to take wind farms off the coast, that sort of thing?
Ms. LUBBER: It's absolutely going to take putting up wind farms, whether they are off the coast or on the coast. We have got to look at the trade offs and we've got to be moving expeditiously and in huge quantities, it is no longer a small thing.
Talking about changing fuel economy standards by one mile per gallon three years from now, that's not the order of magnitude we need to be talking about. And, frankly, the auto companies can do more than that.
If it takes some government money to jump-start that market, we have to do it. But we need to be talking about plug-in cars and hybrid vehicles, and vehicles that are indeed powered by ethanol an alternative fuels.
We need to be looking at every opportunity and pursuing them and sending the right market signals to businesses so they are willing to invest in building these businesses around these renewable energy.
CONAN: We are talking about the idea of energy independence. You're listening to TALK OF THE NATION from NPR News.
And let me just reintroduce our guests. Mindy Lubber, who just heard, president of Ceres, a national network of investors and environmental organizations. She is at the World Economic Forum in Davos, Switzerland.
Frank Verrastro is director and senior fellow at the energy program for The Center of Strategic and International Studies. And Vijay Vaitheeswaran is a correspondent for The Economist magazine.
And I wanted to get back to the ideal of the national security aspects of this, which Mindy brought up earlier. Frank Verrastro, is that a compelling argument for energy independence or move toward energy independence?
Mr. VERRASTRO: I think a compelling argument is to reduce reliance on imports directionally, where over 60 percent now makes inherent good sense. If you look at the sources - and you alluded to this earlier - of major U.S. imports, it's Canada, Mexico, Venezuela, Saudi Arabia and Nigeria. Those are the top five.
And by far the largest regional supplier is our Western Hemisphere. So this notation that America is over-reliant on oil from the Middle East just isn't correct.
We get about 11 percent of our daily demand from Middle East suppliers, and that includes Iraq. I actually think the biggest issue here, and there is two distinctions, one is energy independence as a nation. What Mindy I think is talking about is independence from oil or carbon fuels. Separate issue, needs to be well thought out. Great idea, longer time frame, new technology.
Mr. VERRASTRO: The good news is its just now getting into the context of the political debate.
CONAN: And finally, Vijay Vaitheeswaran, as you look at this from a security vantage point. Even if the United States gets its energy from friendly countries like Canada and Mexico and Venezuela, you can argue about that, but nevertheless it's a global market. An oil shock is an oil shock, isn't it?
Mr. VAITHEESWARAN: Absolutely. I do disagree with Frank on this one. Every barrel of oil is intimately interlinked to every other barrel through the global market.
If there were to be a massive - let's say an al-Qaida attack in Saudi Arabia, I mean this is the kind of the thing that everyone worries about that al-Qaida has actually tried to do this several times already and Osama Bin Laden has explicitly said that is one of the goals of his organization.
You know, let's say they succeed in some horrible way, every barrel of oil in the world will go up in price to you know you name $150 bucks or some other kind of very powerful and scary price. Even the oil in Alaska, and the president did talk about opening up part of Alaska to further drilling.
Now we can have a reasonable conversation debating the merits of that versus the environmental impact. I think that is what we should have a proper conversation.
But what we mustn't think that any American oil company that drills in Alaska if there is to be a global oil shock and the world price goes up above a hundred bucks, they are not going to offer that Alaskan oil at a special low American price just because they like us. They'll charge the market price.
And so that's why it's important to remember it's an interdependence that we are looking at, not real energy independence.
CONAN: Thanks to you all. We appreciate your time. Vijay Vaitheeswaran of The Economist. Frank Verrastro of the Center for Strategic and International Studies. And Mindy Lubber, president of Ceres. We'll be talking more about this in the future.
When we come back, genealogy and Oprah. This is NPR News.
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