Thirty years ago, living in Boston, I went out to cut firewood to keep my family warm. Neighbors did the same for their families. We did that because the world changed in 1973. The Arab oil embargo resulted in major shortages of home heating oil. There were also long lines at gas stations.
Since then, all of us have been at the mercy of the Middle East because it happens to have 2/3rds of the world's oil reserves. Thirty years is a long time. I was 32 when this started. I'm 62 now.
By the late 70's we were sending so much money to the Middle East--- and stock prices were so depressed--- that analysts were calculating how many months it would take before Saudia Arabia owned every company on the New York Stock Exchange. Since then we've had a series of small, middling, and large worries about the supply and price of oil. Energy is so important that monthly changes in the consumer price index are reported with, and without, energy price changes. Food is the only other item given that distinction.
But the CPI only measures the direct price of energy. The hundreds of billions we have spent on Middle East oil have financed enormous collections of weapons. The same exported wealth allowed Osama Bin Laden to pursue his passion for global terrorism.
Among the items we don't include in the real cost of energy is the higher cost of defense--- the billions spent to secure a continuing supply of oil. No, I don't mean to suggest that we are at war with Iraq because it has the world's second largest pool of oil reserves. I merely suggest that a portion of our defense spending exists to defend our supply of oil.
But let's get back to personal action. In lieu of a national policy to conserve energy, I'm starting my own. I hope you will join me. From now on, I'm going to pay attention to energy consumption. I'm going to work, rather militantly, on ways to reduce it. Call me eccentric. Call me weird. I think it will be an interesting hobby. Unlike many hobbies, it will pay for itself.
If enough of us did it, we could change the stability of the world an iota or two. We might also contribute to preserving, or improving, our standard of living.
The first step in my personal energy policy was the purchase of a Toyota Prius. The 45-mile per gallon car replaced an 18-mile per gallon car. By my calculation, we'll cut our gasoline purchases by about 500 gallons a year.
That's a $750 saving on current gas prices in most of Texas. It's a $1,000 saving on $2 a gallon gasoline. Either way, the saving is larger than the tax cut 80 percent of all Americans would receive under the tax cut proposed by the Bush administration.
According to a Brookings Tax Policy Center analysis, households in the middle quintile would receive a tax cut of $256. For upper-middle-income households--- those in the top 60 to 80 percent of income--- it would be $574. As you can see, energy efficiency is as big a lever as anything they've got in Washington.
So imagine what would happen if having a Personal Energy Policy became trendy. Energy guru Amory Lovins has estimated that a national auto fleet just 2.7 miles per gallon more efficient would eliminate the need to import oil from the Persian Gulf. Since the Prius gets nearly 27 more miles to the gallon, only one American in ten would need to own a hybrid--- and the Middle East would be defunded.
Sounds like a goal to me.
Estimates of the Bush tax cut, by income decile
Amory Lovins on energy security
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