A Broad-Based Solution to Our Energy Problem

With instability in the Arab world causing oil prices to surge, and Republicans proposing, with typical venality and idiocy, to solve the problem through either rampant domestic oil drilling or stealing the oil in Iraq and Libya, President Barack Obama is striking a more reasoned tone. In a recent speech at Georgetown University, the president proposed reducing America's foreign oil imports by one-third by 2025. In itself, this sounds like a worthy goal, but given the breadth of the environmental and economic problems that our oil consumption causes, it's unambitious at best.

Part of the problem is that Obama's approach is entirely conventional. He calls for reductions in oil use through boosting alternative-energy sources like natural gas and biofuels and increasing domestic oil production. This shows a fatal flaw in Obama's conception of the problem. He views our massive oil consumption as an issue that should be solved through energy policy. In fact, the real solutions to our energy problems lie in other policy areas: transportation, education, housing, and urban development.

When Republicans chant "drill baby, drill" and the country's leading Democrat responds with "drill but also build solar panels" as an opening offer rather than a final compromise, the whole debate is skewed rightward. Our reliance on oil is a problem caused by excessive demand, not inadequate supply. The way to solve such a problem is not to scurry in vain to produce enough oil to match demand -- an exercise akin to running in quicksand -- but to reduce demand. And to do that requires changing rules that no president has ever identified as falling under energy policy at all.

Our rapacious oil consumption results from decisions made long ago, especially when it comes to transportation. According to the World Resources Institute, in 2005 the U.S. consumed 1,618.6 litres of petroleum per person; Japan and Germany -- two nations with robust automobile industries -- used around a quarter of that per person compared with the U.S. It's not that Americans can't enjoy the benefits of building or owning cars but the U.S. has unwisely encouraged development patterns that forced us to drive everywhere and to drive longer distances.

Because of this, the U.S. has set lower taxes on gasoline compared to other developed nations, and we use the revenue to build roads -- about 80 percent of federal transportation dollars go to highways -- rather than subways and regional rail lines. We need to raise the federal gas tax, which hasn't even risen to keep pace with inflation since 1993, and reapportion the way we spend that revenue.

Housing policy, too, needs to change. Supporting consumer spending on buying a new home instead of renting or rehabilitating an older home in the inner-city has led to suburban sprawl. Not only does this mean people drive more and drive farther but that they live in detached houses and work in suburban office parks and strip malls, all of which consume more energy than apartment buildings, town houses, and urban skyscrapers. We need to stop favoring new homeownership over renting (via the mortgage interest tax deduction and other subsidies). Decreasing the emphasis on homeownership and single-family home development will have the added benefits of preventing future housing bubbles and increasing socioeconomic and racial integration.

Middle-class families are also lured to the suburbs by education policies that allow those schools to be so much better than the ones in inner cities. Whereas many countries finance schools largely through general revenues at the national or regional level, the U.S. leaves most school funding up to localities, which often rely largely on property taxes. The result? Suburban school districts have more advantaged populations and better resources. Most suburban students rely on school buses or cars to get to school. This, of course, uses more oil than walking and the cost of all that gas guzzling has become a major problem for districts struggling with rising gas prices. But the bigger problem is that the socioeconomically segregated schools create inequality of opportunity and, from a land-use perspective, this means that middle-class families will keep leaving the city to give their children a better chance in life. If we raised state and federal income taxes and provisioned funding more equally across districts and also created regional mega-districts to integrate suburban and urban school districts, we could remove this incentive for white flight and suburban sprawl.

Unlike domestic drilling or subsidizing the construction of nuclear reactors, these policies do not risk catastrophic accidents. The "all of the above" approach to energy independence Obama advocates also raises the risks of future disasters like the BP oil spill. As a report released today by the NAACP to commemorate the one-year anniversary of the spill illustrates, the economic, health, and environmental impact on Gulf-area residents is still devastating and prevalent. April 2010 also featured the Massey coal mine explosion in West Virginia and a deadly accident at a coal mine in Kentucky. As a new report from the Center for American Progress demonstrates, fossil-fuel extraction is among the most dangerous industries for workers.

In theory, the best way to reduce our consumption of fossil fuels across all sectors of the economy would be to put a price or tax on carbon emissions and let the market sort out which are the best sectors to find efficiencies. With Republicans controlling the House of Representatives, though, that will not happen. But fiscal conservatives should in theory be amenable to removing market-distorting subsidies. On the federal level, those include subsidies in the tax code for fossil-fuel production, our disproportionate funding of highways over mass transit, and federal policies that subsidize buying a new home but not renting or renovating an existing home in the inner city. In fact, Obama favors many of these positions: He has released a forward-looking model for reauthorization of the Surface Transportation Act, proposed expanded high-speed rail, and endorsed removing tax expenditures like the home mortgage deduction. But Obama has not made any of these a political priority, letting the overdue Surface Transit reauthorization languish and accepting cuts to high-speed rail in the 2011 budget compromise. Most important, Obama has left these ideas in their respective silos -- tax expenditures are tax policy, rail is transportation policy -- instead of calling them what they are: a plan to reduce our dependence on oil.

Some of the other elements of combating suburban sprawl -- such as integrating and equalizing funding between school districts and changing local zoning codes that currently require parking lots, low-density construction, and segregated uses -- are largely not within the president's control. Others are within his authority, but he has avoided endorsing those policies -- such as increasing the tax on gasoline to fund mass-transit priorities -- which are, admittedly, political nonstarters with a Republican House of Representatives.

But our consumption of fossil fuels and its malign effects -- climate change, the Gulf oil spill, worker deaths, the distorting effects on our foreign policy, and the tax we pay to hostile foreign governments -- is the single biggest problem our nation faces. To address such a sprawling problem requires leadership, political courage, and outside-the-box thinking. In winning election and passing health-care reform, President Obama showed he has all those qualities. Unfortunately, when it comes to combating the real reasons for our oil dependency, Obama has yet to bring any of them to bear.

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