Ever notice that when the price of oil goes way up, we usually have a recession in the United States? I don’t think anyone knows for sure whether that is causation or correlation.

The present deep economic crisis was not triggered by oil price increases — it was set off by bloated bubbles in housing values, mortgages and consumer credit, and exacerbated by nonsensical national policies that let the federal budget drift wildly out of balance. But it will be a lot harder to work ourselves out of the present doldrums if the price of oil remains high or increases.

Last year the yearlong average of Brent crude (an important international oil price benchmark) was above $100 per barrel for the first time. And while no one can predict short-term fluctuations, the long-term outlook for the price of oil is — you guessed it — up.

To break our reliance on foreign oil, for national security reasons and economic ones, the auto industry needs to play a major role.

The U.S. government stepped in and rescued the auto industry when it was going down the drain in 2008-09. Now it’s time to tell the industry what we, the citizens and taxpayers who bailed them out, ask in return.

What we want is for the auto industry to manufacture all its cars so that they can run on three kinds of fuel in addition to traditional, oil-derived gasoline: ethanol, methanol and natural gas. None of these three should cost more than gasoline — and some will probably cost less.

If they will do that — and they can, with very little cost or difficulty — we can finally substitute cheaper, cleaner American-produced fuels for most of the gasoline we import. It’s time to stand that old slogan on its head: What’s good for the nation is good for General Motors.

The United States uses about 20 million barrels of oil per day. Around half of this comes from overseas, and for that we send roughly $400 billion per year into the coffers of such bastions of democracy and the rule of law as Saudi Arabia, Russia, Iran, Venezuela and others.

For four decades, our leaders have told us we need to end our addiction to imported oil. What do we have to show for all those words? A great big goose egg and even more dependence.

My sense of the country’s mood is that we’re ready to show ourselves and the world that we’re capable of rolling up our sleeves and getting something done. Most of us don’t like being paralyzed and divided. And oil independence is the logical target — because it affects all of us,  because keeping that $400 billion a year at home would be an enormous boost to our own economy, because setting our foreign policy free of quiet pressure from those who sell us oil is an important objective, and because if they give it careful thought, both traditional liberals and right-wing conservatives should be able to agree on this goal. That would make all of us cheer.

Three things are necessary to break free of the chokehold foreign oil has on our economy:

Remove the market barriers (laws, regulations) that limit the ability of gas stations to sell alternative fuels.

Direct the automobile manufacturers to make all cars flex-fuel cars — as is now done in some other countries, such as Brazil, where all cars can run on any mixture of ethanol and gasoline.

Direct the Environmental Protection Agency to authorize fuel-conversion rules that are simple and cheap, rather than the present nightmare regulation, so that the existing car fleet can be converted easily to alternative fuels.

In addition, we should keep expanding use of hybrids and electric vehicles. And the government will need to encourage the construction of infrastructure (pipelines, etc.) to distribute methanol and natural gas to retail outlets. This alternative-fuel infrastructure can easily fit into the large, capital infrastructure program we need to generate jobs and make our economy more competitive.

Sound workable? It is — difficult but doable, in less than a decade. And it will make a world of difference.

Peter Goldmark headed the climate program at the Environmental Defense Fund. He wrote this for Newsday.

 


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