Energy: What Is the real cost of oil?

by Judy Nadler

Energy consumption is at an all-time high, fuel prices are skyrocketing, and the concentration of carbon dioxide in the atmosphere is more than 30 percent higher than it was before the Industrial Revolution. Innovation and ingenuity have always been a hallmark of this country, but now we look to solve the problem with tax breaks for energy companies and incentives for consumers to voluntarily conserve.

There are several key ethical aspects to the energy crisis. The first is transparency. Even as Congress passed the first omnibus energy bill in 20 years, there remain many unanswered questions about how the administration's energy policy was formulated and who was involved in crafting the policy. The lack of disclosure prompts us to question the influence of special interests, and the $14.5 billion in incentives awarded to energy companies. A package like that-in fact any significant policy decision-should be open to public debate and benefits from the scrutiny of all stakeholders.

Our discussion of energy must also include a discussion of the ethics of economic growth, human health, and the environment. And critical decisions must be made that call for political courage and a measure of sacrifice.

The availability and affordability of energy is directly related to the economic opportunities for individuals and nations. Those with fewer resources are destined to remain at the bottom. Smaller and less-developed countries cannot compete with China, which in 2003 overtook Japan as the world's second biggest consumer of petroleum products after the United States. Dependence on oil has prompted China to look to developing countries for resources. Africa currently supplies nearly 30 percent of the country's crude oil imports, and China's political leaders have met with representatives from Angola, Nigeria, Chad, Libya, and Sudan in an effort to expand beyond their current relationships with the Middle East.

According to an article in the Washington Post, African countries such as Namibia are among the hardest hit. The average annual income there is $5,000, and gas costs $5 per gallon, driven up in part by the recent hurricanes but also because of the enormous international demand that has caused prices to soar.

Will political decisions will be made in the future based not on sound policy but on the price of oil? And how will developing countries, drained of their natural resources, be able to provide security and a stable future for their citizens? Will Congress be willing to give up relationships with countries whose policies and human rights records make them poor allies?

Long before Katrina and Rita disrupted supplies, oil demands and exports were impacting the poor disproportionately. This winter predictions are nothing short of dire. And while energy suppliers such as Pacific Gas and Electric are offering discounts for customers who reduce their gas usage by 10 percent or more, this type of plan will not help those families who have either been energy efficient or who have not had the money to turn on the furnace.

In 2001 California spent $450 million on a variety of conservation programs. The statewide publicity campaign reduced demand by more than 5,000 megawatts, but it will take more than reminders to turn down the thermostat to reduce consumption significantly and to make energy conservation a habit, not a campaign. A current Energy Star campaign, sponsored jointly with the U.S. Department of Energy and the Environmental Protection Agency, advocates use of compact fluorescent light bulbs with the slogan "Change a Light, Change the World." It is clear that goodwill and advertising will not be enough.

The state of Texas took a different approach in 2001, passing Senate Bill 5, known as the Texas Emissions Reduction Plan. The legislation imposes new energy efficiency requirements on political subdivisions in 41 urban and surrounding counties with the goal of both decreasing consumption and improving air quality.

Is there political and moral courage to stop encouraging and begin mandating conservation? Should every new home and remodel be required to observe a new national and universal building code leading to all "green" or energy-conserving buildings? Who will be willing to accept the additional costs for these changes, and who will be willing to put serious money toward turning the years of research on alternative energy sources into marketable and affordable products? Are city councils willing to adopt new general plans encouraging "smart growth": that is, higher density development near major transportation corridors? I can speak from personal experience that many constituents still equate attached townhouses with tenement houses.

When prices at the pump topped $3, southern governors were quick to jump on the bandwagon to suspend gasoline taxes, perhaps forgetting in their excitement that those taxes are used for vital road improvements, and the generous action to suspend the taxes will lead to even heavier budget deficits in the future.

Higher fuel efficiency and more money for mass transit is more than good policy, it's good politics. According to a poll by the Pew Research Center, conducted immediately after Hurricane Katrina, 86 percent of the American public supports more fuel-efficient cars and 68 percent want more money spent on public transportation.

Taking an informed and objective look at alternative forms of energy calls us to ask, What are we willing to sacrifice for viable alternatives to fossil fuels. There are plenty of naysayers. Solar panels are considered too expensive, wind farms are criticized for impacting bird populations, few communities are willing to consider building waste-to-energy facilities, and when nuclear energy is mentioned there are serious environmental questions regarding transportation and storage of radioactive wastes. What risks are worth taking in order to provide more affordable energy? What role do we as individuals have in moving the debate forward? Ethics calls for us to consider the common good. But whose definition do we use for common good?

Benjamin Franklin may be best known for his role as a founding father and for flying a kite in a lightening storm, but he may also be given credit for recognizing an energy problem and solving it.

Early homes were heated by open fireplaces, which gave out some heat but most went up the chimney. The cast iron fireplace he invented, later called the Franklin Stove, allowed for more heat using less fuel. This dramatically increased heating efficiency and also slowed the destruction of the local forests.

Where is Ben Franklin when we need him?

Judy Nadler is senior fellow in government ethics at the Markkula Center for Applied Ethics. She made these remarks at the Ethics Outlook, Nov. 10, 2005.