Gas and Gasbags or, the open road and its enemies

Gas and Gasbags or, the open road and its enemiesAny crisis in the Middle East inevitably prompts Washington to scapegoat the automobile as a threat to national security. The dust had barely settled on lower Manhattan last fall before calls went forth -- from pundits and pols across the spectrum -- to relinquish our "gas-guzzlers" in the name of energy independence.

But just as the Cassandras will dominate media coverage of energy, so will Middle Eastern oil continue to fuel America's vehicles for the foreseeable future. Simple economics, geography, and consumer choice all demand it.

Since Sept. 11, Washington has mobilized to end our "dangerous addiction" to foreign energy sources. Sens. John Kerry and John McCain are proposing dramatic increases in federal fuel-economy standards. The energy package crafted by majority leader Tom Daschle advocates "biodiesels," and the Natural Resources Defense Council is insisting that we could cut gasoline consumption by 50 percent over ten years -- if only the feds would mandate what and where we drove.

Even the "oil men" in the Bush administration have advocated doling out millions in research subsidies for hydrogen fuel cells that supposedly would replace the internal-combustion engine. The project, Energy Secretary Spencer Abraham announced in January, is "rooted in President Bush's call to reduce American reliance on foreign oil."

In fact, the price of oil has declined since Sept. 11, as it consistently has for decades, and with producers scattered all over the world, no single nation or region can stop the flow.

But supporters of a comprehensive energy policy seem undeterred by these realities. "Logic," Robert Samuelson writes in the Washington Post, "is no defense against instability. We need to make it harder for [Middle Easterners] to use the oil weapon and take steps to protect ourselves if it is used. Even if we avoid trouble now, the threat will remain."

Past efforts to attain a petroleum-free utopia, however, have largely failed. For example, despite three decades of federal fuel-economy standards, oil imports as a share of U.S. consumption have risen from 35 to 59 percent.

A market-based solution, such as a gas tax, is the most obvious approach to cutting consumption, but even environmentalists concede that proposing one would spell political suicide. Moreover, gas taxes are an expensive solution and come with no guarantee of energy independence. The European Union, for example, taxes gas up to $4 per gallon -- and still imports over half its oil.

So instead of enraging consumers at the pump, Washington has largely relied on backdoor taxes.

The regulatory regime known as CAFE (Corporate Average Fuel Economy) was hatched in the wake of the oil-price shocks of the early 1970s, when sedans still made up most of the nation's fleet. Instead of the redesigned smaller, lighter, and less powerful vehicles, however, consumers flocked to minivans, small trucks, and sport utility vehicles, which are held to a lower CAFE standard (20.7 mpg versus the 27.5 mpg required for cars).

Today, both passenger cars and light trucks are more efficient than ever, having improved 114 percent and 56 percent, respectively, since 1974. But gasoline is so cheap, despite continuing Middle Eastern crises, that on average Americans are driving twice as many miles as in years past.

A recent study by H. Sterling Burnett of the National Center for Policy Analysis found that raising CAFE standards by 40 percent -- as Kerry and others recommend -- would not "reduce future U.S. dependence on foreign oil." CAFE's only function is to keep regulators busy calculating elaborate formulas for determining compliance in which manufacturers then look for loopholes. (CAFE requires that a manufacturer's trucks meet an average standard of 20.7 mpg. Thus DaimlerChrysler AG, for example, designates its popular PT Cruiser as a "truck" in order to offset the low mpg of its large SUVs, such as the Dodge Durango.)

Worse, stricter CAFE standards would surely undermine the very economic security that proponents vow to protect. The profits of U.S. automakers -- and tens of thousands of UAW jobs -- depend on sales of SUVs and light trucks. According to an analysis by Andrew N. Kleit, a professor at Pennsylvania State University, the Kerry CAFE proposal would reduce the profits of General Motors by $3.8 billion, of Ford by $3.4 billion, and of DaimlerChrysler by $2 billion. Foreign manufacturers, which largely specialize in smaller vehicles, would see a profit increase of $4.4 billion.

Evidently hoping to shield automakers from a CAFE assault -- and to win PR points for expanded domestic drilling -- the Bush administration has embraced the latest alternative-fuel fad: the hydrogen fuel cell.

The Bush plan replaces the Partnership for a New Generation of Vehicles, Al Gore's vain attempt to produce an affordable, emissions-free family sedan capable of 80 mpg by 2004. Over eight years, Washington pumped more than $1.5 billion into the program -- in addition to the $1.5 billion sunk into it by the Big Three. In its annual review of the project last August, the National Research Council judged the super-car goals to be inherently "unrealistic."

The Bush plan has drawn broad political support. Former Clinton chief of staff John Podesta cheers, "The next step is hydrogen-powered fuel-cell vehicles. But the only way to get these vehicles out of the lab and onto the road is with incentives and requirements aimed at producing 100,000 vehicles by 2010, 2.5 million by 2020."

But the 100-year dominance of conventional internal-combustion engines over alternatives is no accident. A quick primer on the complexities of hydrogen power helps explain why.

Hydrogen's status as the new darling of the sustainable-energy movement is understandable. Its promise lies first in its performance: Unlike ethanol, it supplies more energy per pound than gasoline. When used to power an automobile, its only emission is water -- making it especially attractive to an industry already under pressure from clean-air and global-warming rules. And hydrogen is one of the most plentiful elements on the planet.

The trouble is, hydrogen always comes married to another element -- as in methane gas or water.

Most fuel-cell technology today relies on hydrogen extracted from methane, in a process that emits large quantities of greenhouse gases. And as Car and Driver magazine's technical analyst, Patrick Bedard, explains, domestic sources of methane are "[t]oo limited to serve any significant demand for automobiles." A study by the Argonne National Laboratory concluded that the U.S. would have to look to foreign sources -- primarily in Russia and Iran, and in other Middle East nations.

Goodbye, oil dependence. Hello, methane dependence.

Given these hurdles, attention is turning instead to electrolysis -- the extraction of hydrogen from water, which is readily obtainable along America's ample coasts. Electrolysis is, however, the most energy-intensive process of any fuel alternative; studies differ on whether it would consume more carbon-based fuels than the use of hydrogen would save. What is certain, points out Stanford University professor John McCarthy, is that "the advantage of hydrogen, if you have to burn carbon fuels (coal, oil, or gas) to manufacture it, would be negligible."

In other words, McCarthy explains, the unspoken truth about hydrogen is that "it is a synonym for nuclear power."

Leading researchers in the field -- including David Scott of the University of Victoria in Canada, Cesare Marchetti of the International Institute for Applied Systems Analysis, and Jesse Ausubel of Rockefeller University -- say that the only way to produce liquid hydrogen in the mass quantities needed for transportation is with a major investment in nuclear power. Says Scott: "[A]pplying the most elementary numeracy, nuclear fission is the only realistic option."

Ironically, many of the political voices now embracing hydrogen fuel are the same ones that have prevented the construction of a single new U.S. nuclear plant in 25 years. Ausubel has written in The Industrial Physicist magazine that "understanding how to use nuclear power, and its acceptance, will take a century or more."

For now, the answer is still gasoline. Compared with the technical barriers to developing alternative fuels, there already exist numerous market mechanisms to mitigate potential oil shortages. As suggested by Donald Losman, a National Defense University economist, these include: stockpiling, futures contracts, diversifying the supplier base, and relaxing the restrictions that currently mandate some 13 different fuel blends in 30 cities.