Planning for a future not dependent on oil

Seattle Times

By Kate Riley
December 12, 2005

Last week, I filled my trusty Honda's gas tank and happily noted the fall in gas prices eclipsed the 9.5-cent state gas tax I voted to keep.

But after a couple of days listening to energy experts, economists and investors talk about something called "peak oil," I fear a $2.16-a-gallon price is only a temporary respite.
Once the domain of wonky economists and think tanks, concern that world oil production is at or approaching its peak is gaining traction among America's policymakers. On the ascending side of the production bell curve, prices tend to be relatively low. But at the peak and on the downslope, they would rise precipitously.

Wednesday, the U.S. House Energy and Air Quality Subcommittee held the first congressional hearing on the idea of peak oil and what should be done about it. Last month, U.S. Energy Secretary Samuel Bodman asked a government advisory panel to study whether the world's oil and natural-gas production can continue to meet U.S. demand — and for how long.
It's an important question. The United States accounts for 8 percent of the world's oil production but consumes 25 percent. Sixty percent of U.S. consumption comes from foreign sources.

Competition for what is available is heating up — China recently surpassed Japan and is now the second-largest oil importer. It doesn't help that the majority of the world's proven oil reserves are in the volatile Mideast. Plus, it's difficult to know how much oil is available because some foreign producers aren't talking.

"We are sitting on the world's most incredible illusion — that the Mideast has an unlimited supply of oil," says Matthew Simmons, a Houston-based energy industry investment banker and one of President Bush's energy advisers.

Simmons points to the market response to the Gulf Coast's hurricanes as an indicator the industry's spare capacity is getting thin.

Gas prices near $3 a gallon, however briefly, have gotten people's attention. While federal energy legislation passed pre-Katrina offered little to reduce U.S. consumption, a bipartisan group of eight senators three weeks ago proposed legislation to do so.

Citing the need for energy independence and national security, the group led by Sen. Joe Lieberman, D-Conn., would require U.S. consumption to be cut by 10 million barrels a day within 25 years. The bill would provide incentives for alternative vehicles and fuels.

Congressman Jay Inslee, D-Wash., has proposed legislation with a more holistic view. His New Apollo Energy Project would establish energy performance standards, provide tax incentives and market-based assistance to create clean energy jobs while reducing greenhouse gas emissions and dependence on foreign oil.

Last week, at its annual meeting in Spokane, the Washington Public Utility District Association highlighted plug-in hybrid vehicles and alternative energy generation, such as wind, landfill gas, solar and tidal/ocean energy.

In January, the Snohomish County Public Utility District and the Cascadia Center hope to launch a regional discussion about the role of plug-in hybrid technology in solving some Puget Sound problems. The PUD's Steve Marshall suggests an expanded hybrid-vehicle technology could solve some of Puget Sound's transportation problems. Hybrid cars with extra batteries could be topped off by recharging on home electrical systems, further increasing mileage. Technology could limit recharging overnight when loads are low. Or free charging could be offered at park-and-ride lots to encourage more people to take the bus.

I don't know if world oil production is peaking, but I'm glad policymakers from the Bush administration to local utilities are fretting about it. Congress erred when it passed legislation that turned a blind eye to reducing oil consumption. America must plan for a future with less dependence on oil.

Kate Riley's column appears regularly on editorial pages of The Times. Her e-mail address is kriley@seattletimes.com

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