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In the wake of the terrorist attacks on the World Trade Center and the Pentagon, Americans are justifiably worried about energy security, especially our vulnerability to a disruption in oil supplies or a surge in world oil prices. Some members of Congress have called for more domestic drilling to increase supplies. But this path cannot ensure our energy security or national security -- what makes us vulnerable is our excessive dependence on oil from all sources, foreign and domestic. A faster, cleaner and cheaper path to energy security is to reduce demand for oil. This NRDC analysis outlines seven key energy security policies that would significantly reduce U.S. oil dependence over the next few years and the following three decades.


    Introduction

    Long-term Solutions for U.S. Energy Security
  • Raise fuel economy standards to 40 mpg by 2012 and 55 mpg by 2020.
  • Require fuel-efficient replacement tires by 2002.
  • Enact tax incentives for hybrids and fuel-cell vehicles.
  • Reinvest in public transit and inter-city railroads.
  • Promote "smart growth."
  • Make fuel from farm wastes.
  • Launch an "Apollo Project" for fuel cells and hydrogen fuel.
    Short-term Solutions for U.S. Energy Security
  • Check your tire pressure.
  • Obey the speed limit.
  • Turn off the car engine while waiting in line.
  • Use car pools and public transit, and telecommute.
  • Keep cars tuned and use fuel-efficient engine oil.
  • Buy the most fuel-efficient car that meets your needs.

Introduction

Since the terrorist attacks on the World Trade Center and the Pentagon, the security of our nation, the safety of our people, and the stability of our economy have become paramount concerns for the American public and our elected leaders. Americans are justifiably worried about energy security, especially our vulnerability to a disruption in oil supplies or a surge in world oil prices.

In the weeks following the attacks, some members of Congress have called for immediate action to open the Arctic National Wildlife Refuge to oil drilling. Framing our energy security narrowly as a question of how much oil we import, they argue for more domestic drilling, even in our last pristine wilderness areas. This path, however, would not ensure our energy security or national security.

Our vulnerability to oil price spikes and supply disruptions is due to our excessive dependence on oil from all sources, foreign and domestic. The first Bush administration acknowledged this fact in its 1991 National Energy Strategy, which said: "Popular opinion aside, our vulnerability to price shocks is not determined by how much oil we import." The number one factor making us vulnerable: "how oil dependent our economy is."[1]

Americans consume 25 percent of the world's produced oil, but our nation holds less than 3 percent of the world's proven oil reserves.[2] The amount of economically recoverable oil in the Arctic Refuge, according to U.S. Geological Survey estimates, would increase world reserves by just 0.3 percent[3] -- not nearly enough to make a significant dent in our imports or to influence petroleum prices. Over the Arctic Refuge field's 50-year life, it would likely produce less than what our country now consumes in six months, and less than 1 percent of the oil we are projected to consume over those 50 years.[4]

Drilling in the refuge would have no effect on our current situation. If we opened the area to oil development today, it would take seven to 10 years for refuge crude to begin arriving at refineries.[5] Nor would refuge oil play a significant role in decades to come. Even at the point of its peak production rate in 2027, it would likely equal less than 2 percent of projected U.S. consumption for that year.[6]

There is a faster, cleaner and cheaper alternative, a path to energy security that would save many times more oil than could ever come from drilling in the Arctic Refuge or our other pristine protected places. The cornerstone of this path is to reduce demand for gasoline with better gas mileage, cleaner fuels from America's farms, and faster deployment of hybrid and fuel cell technologies. We also can promote public transportation and "smart growth" development patterns that reduce driving, cut gasoline use, and offer a better quality of life. Below NRDC outlines key energy security policies that would significantly reduce U.S. oil dependence over the next few years and the following three decades.

As our country girds for a struggle against international terrorism, Americans also are concerned about the possibility of immediate oil price shocks or supply disruptions. In the weeks following the attacks, oil suppliers pledged to keep their spigots open and oil prices actually have fallen. Nevertheless, our nation should be better prepared. In a section following the energy security policies, NRDC offers a contingency plan for meeting an emergency oil supply disruption or price spike.


Long-term Solutions for U.S. Energy Security

1. Raise fuel economy standards to 40 mpg by 2012 and 55 mpg by 2020.
Congress should raise fuel economy standards, starting with closing the sport utility vehicle loophole by holding SUVs and minivans to the same fuel economy standards as cars. Congress should then boost fuel economy standards for the combined car and light truck fleet in regular steps every few years, reaching 40 miles per gallon by 2012 and 55 mpg by 2020.

  • A 40-mpg standard would save more than 50 billion barrels over the next 50 years, more than 15 times the likely yield of economically recoverable oil from the Arctic Refuge.[7] A 55-mpg standard would save more than 20 times the Arctic Refuge's likely yield.[8]
  • Decades of federal inaction on fuel economy standards and a surge in sales of SUVs and minivans have dropped the average fuel economy of new cars and light trucks combined to its lowest point in nearly 20 years.[9]
  • Passenger cars use more than 40 percent of the oil consumed in America. Drivers spent $186 billion on fuel last year. Without vehicle fuel economy improvements, Americans will spend an estimated $260 billion in 2020 on gasoline.[10]
  • Raising fuel economy standards to 40 mpg would save car owners $3,000 to $5,000 at the gas pump over the life of their cars, more than offsetting increased vehicle costs.[11]
  • Even interim steps toward the 40-mpg and 55-mpg targets would have huge benefits. For example, a 3-mpg increase in fuel economy would save 1 million barrels of oil per day, save consumers as much as $25 billion per year in fuel costs, and cut carbon dioxide emissions by 140 million tons per year.[12]<
  • Higher fuel economy standards would result in a net increase of more than 100,000 motor vehicle-related jobs and a $5.7 billion boost in gross domestic product by 2020.[13]
  • U.S. emissions of heat-trapping carbon dioxide would be reduced by nearly 900 million tons per year by 2020.[14]
  • Automakers could reach a 40-mpg standard using available technologies to improve conventional gasoline vehicles. They could reach a 55-mpg standard if they made a majority of their passenger vehicles hybrid-electrics. Two hybrids, the Toyota Prius and the Honda Insight, are already on the road, and the hybrid Ford Escape will be available next year.
Table 1. Oil Savings from Increased Fuel Efficiency (40 mpg by 2012, 55 mpg by 2020)
2010 2020
Annual oil savings (billion barrels per year) 0.54 (15%) 1.76 (39%)
Cumulative oil savings (billion barrels) 2.16 14
GHGs (million tons of CO2) 273 888
Annual consumer savings (billions of dollars) 7.4 28.1

Source: Friedman, David et al. "Drilling in Detroit," Union of Concerned Scientists, June 2001.


2. Require fuel-efficient replacement tires by 2002.
Congress should require tire manufacturers to sell replacement tires that are at least as fuel-efficient as original equipment tires by 2002.

  • This simple step would save 5.4 billion barrels of oil over the next 50 years, 70 percent more than the total amount of economically recoverable oil that is likely available from the Arctic Refuge over the same time period.[15]
  • Most replacement tires now on the market create more friction as they roll than do original equipment tires. Replacement tires have a 20 percent higher "rolling resistance," making average replacement tires about 4 percent less "fuel efficient" than original tires on a new vehicle. Requiring better replacement tires would cut the gasoline consumption of all U.S. vehicles by about 3 percent when fully phased in.[16]
  • Automakers use low-friction tires on new cars to help them comply with fuel economy standards. However, there are no standards or efficiency labels for replacement tires, so most consumers unwittingly purchase less efficient tires when their originals wear out.
  • The National Highway Traffic Safety Administration estimates that fuel-efficient tires would cost consumers no more than $5 per tire.[17] Michelin has put that figure at less than $2.50 per tire.[18] Even using the higher figure, the average driver would recoup the additional expense in fuel savings in just one year, and would save an additional $90 over the 40,000-mile life of the tires.
Table 2. Savings from requiring replacement tires sold starting in 2002 to be as least as fuel-efficient as the vehicle's original tires
2010 2020
Annual oil savings (billion barrels per year) 0.1 (3%) 0.1 (3%)
Cumulative oil savings (billion barrels) 0.7 1.7
GHGs (million tons of CO2-eq) 47 51
Annual consumer savings (billions of dollars) $4.7 $5.1

Source: "A Responsible Energy Policy for the 21st Century," Appendix A: Oil Savings From Fuel-Efficient Tires and Higher Fuel Economy, NRDC, February 2001. (Consumer savings are new calculations not included in appendix.)


3. Enact tax incentives for hybrids and fuel-cell vehicles.
Congress should enact tax incentives for advanced vehicle technologies, including alternative fuel vehicles, hybrid gasoline-electric vehicles and fuel cell vehicles -- technologies that would enable the nation's fleet to meet a 55-mpg standard in 2020.

  • Congress should pass S.760 as introduced by Sens. Orrin Hatch (R-Utah) and Jay Rockefeller (D-W.Va.), not the watered-down version included in the House energy bill.
  • As an example, under the Hatch-Rockefeller bill, a buyer of a mid-size hybrid-electric car that gets 60 mpg (2.25 times the current class average) would receive a $3,500 rebate.
  • This tax incentive would greatly speed up the commercialization of hybrids, already pioneered by Toyota and Honda. And they would give a critical boost to fuel cell vehicle technology.

4. Reinvest in public transit and inter-city railroads.
Congress should offer states and cities more help to meet the surging demand for public transportation. Funding backlogged bus and rail transit projects, and rebuilding inter-city rail systems, would reduce U.S. oil dependence, reduce traffic congestion, and clean the air.

  • Public transportation ridership has surged in recent years, reaching levels not seen since the 1960s. According to the Federal Transit Administration, starting in the early 1990s public transit saved the country 1.5 billion gallons of fuel annually -- nearly 36 million barrels of oil.[19]
  • Cities are expanding rail and bus systems to respond to meet growing demand -- nearly 1,500 miles of new light rail and heavy rail lines were in proposal, planning, design or construction phases in 2000.[20]
  • Since the September 11 attacks, train ridership has increased 10 percent to 15 percent over last year's levels, according to AMTRAK. Rebuilding our rail capacity to capture a greater share of inter-city trips would save oil, and reduce congestion in the air and on our roads.
< p>5. Promote "smart growth."
Congress should reform federal transportation, housing, tax and land management policies to support, rather than undermine, state and local "smart growth" initiatives.

  • Over the long term, "smart growth" can reduce suburban sprawl and cut the need for driving, reducing oil consumption while improving our quality of life.
  • By coordinating transit planning and development, Portland, Oregon, absorbed a 26 percent growth in population from the mid-1980s to the mid-1990s with only a 2 percent growth in traffic. Portland residents now have shorter average commute times and cleaner air. By contrast, Atlanta's traffic grew 17 percent over the same period while its population increased 32 percent. Energy consumption per capita in Portland dropped 8 percent, but it increased 11 percent in Atlanta.[21]
  • Congress should pass the Urban Sprawl and Smart Growth Study Act (H.R. 1739), which would add federal impacts on suburban sprawl as part of the environmental assessment required by the National Environmental Policy Act.
  • Congress should direct FannieMae to aggressively promote "Location Efficient MortgagesSM" -- mortgages with favorable terms for homes located in central areas or near public transit -- recognizing that homeowners with low transportation costs can carry larger mortgages.
  • Congress should provide tax incentives and funding for transit-oriented development, urban revitalization, and rural land conservation.

6. Make fuel from farm wastes.
Congress should fund accelerated construction of commercial-scale pilot plants for making ethanol motor fuel from agricultural wastes. Tapping agricultural wastes and other renewable feedstocks to produce fuel has tremendous potential to reduce U.S. oil dependence.

  • New ethanol conversion processes would greatly improve current methods of making ethanol from corn, which require substantial amounts of energy. New technologies would make it economical to make ethanol from crop wastes and other woody parts of plants (called "cellulosic" biomass).
  • Cellulosic ethanol production can start using agricultural wastes such as corn stalks, sugar cane wastes and rice hulls. Once these are fully exploited, dedicated energy crops (such as switch grass and hybrid poplars) could be planted to increase the supply.
  • Ethanol from corn supplies about 1 percent of motor fuel. Much larger oil savings and pollution reductions are possible over the medium term by deploying these new processes.
  • As ethanol use increases, vehicle emission controls should be improved to achieve the public health benefits of cleaner burning gasoline.

7. Launch an "Apollo Project" for fuel cells and hydrogen fuel.
Congress should set a goal of converting America's passenger transportation to fuel cell vehicles running on hydrogen, the ultimate "green" energy source whose only byproduct is water. Fuel cells would enable new vehicles to reach an average fuel economy equivalent of about 72 mpg by 2030 -- three times today's fleet average.

  • Following the lead of House Minority Leader Dick Gephardt (D-Mo.), Congress should create a project on the level of NASA's Apollo moon mission to make fuel cell technology commercially feasible. Such a program would sharply increase funding for research and development of fuel cell vehicles and hydrogen fuel distribution systems.
  • The federal fuel cell R&D goal should be production of 100,000 fuel cell vehicles by 2010 and expanding to 1,000,000 vehicles by 2020.
  • Congress also should focus hydrogen fuel R&D on ways to make hydrogen with 80 percent lower emissions of carbon dioxide (on a full-fuel-cycle basis) than conventional gasoline. Promising approaches include:
    • Using solar energy or wind power to split water.
    • Converting biomass energy crops to hydrogen or alcohol, which then is converted to hydrogen onboard the vehicle.
    • Using natural gas or coal to produce hydrogen, electricity and steam for industrial processes, with underground carbon dioxide disposal.


Short-term Solutions for U.S. Energy Security

During World War II, Americans met our nation's energy challenges with an unprecedented spirit of conservation, using every gallon of gasoline wisely. Californians showed this summer that that can-do, conservation spirit is alive and well today, responding to an electricity crisis by cutting peak demand by more than 12 percent and total demand by about 6 percent -- without any draconian measures.

Below we offer a "National Emergency Gasoline Conservation Program" that we could have ready in the event there is an oil supply crisis in the coming months -- six simple steps American consumers and businesses could begin taking immediately to reduce gasoline consumption. These steps would increase our energy security, save money, and cut pollution at the same time.

NRDC estimates these measures would cut U.S. gasoline consumption several percent within a few months, making them an effective response to any short-term supply disruption or price shock. Compare that to drilling in the Arctic National Wildlife Refuge, which could not ramp up to produce that much oil for at least 15 years.

1. Check your tire pressure.

  • More than a quarter of all cars and nearly one-third of all SUVs, vans and pickups are driven with tires at least 8 pounds below their proper levels, according to a new survey by the Department of Transportation.[22]
  • If all Americans kept their tires properly inflated, NRDC estimates the nation would cut its gasoline use by 2 percent.
  • Maintaining the correct tire pressure also would save lives. Under-inflated tires are more prone to tread separation and blowouts, which can cause fatal accidents.
  • Congress should authorize the president to require all service stations to offer free air and to post prominent signs and stickers that say, "Check your tire pressure every time you fill up -- for your safety and America's energy security."

2. Obey the speed limit.

  • Slowing down from 75 to 65 miles per hour would reduce highway gasoline consumption about 15 percent.[23]
  • Slowing down also would save lives.
  • Congress should provide extra funding for states that strictly enforce speed limits and post signs that encourage slower driving: "Drive 65 -- for your safety and America's energy security."

3. Turn off the car engine while waiting in line.

  • Americans waste millions of gallons of gasoline everyday running their engines while they are parked or waiting in line.
  • Idling cannot be avoided in traffic jams, but drivers should turn off their engines while parked or waiting at drive-in windows. If the wait is longer than 30 seconds, starting up a car again uses less gasoline than leaving it running.
  • Congress should authorize the president to require parking lots, banks, fast-food restaurants, and other drive-through stores to post signs stating: "Turn off your engine while you wait -- for cleaner air and America's energy security."

4. Use car pools and public transit, and telecommute.

  • If each commuter car carried just one more passenger once a week, we would cut gasoline consumption by about 2 percent. That would translate into big savings for the average American worker. Someone with a daily commute of 10 miles each way and a 20-mpg vehicle would save 236 gallons of fuel per year by opting to carpool, telecommute or use transit.[24]
  • A study in Minneapolis-St. Paul found that more than one in 10 employees shifted from driving to some other way of commuting when offered tax-free commuter benefits equal to those provided in the form of free parking.[25]
  • Congress should promote commuter choice with a tax-free benefit for employees who car-pool, use transit, bike to work, or telecommute (currently limited to $100) equal to that provided in the form of free parking (currently limited to $175). The federal government also should support and promote Web sites that help commuters find drivers traveling similar routes at similar times. Posters at workplaces could say: "Car pool or ride the bus -- for America's energy security."

5. Keep cars tuned and use fuel-efficient engine oil.

  • A poorly tuned or poorly maintained engine can increase gasoline consumption by as much as 15 percent.[26]
  • Following the recommended maintenance schedule in owner's manuals would conserve fuel, and cars would run better and last longer.
  • Motor oils with additives that reduce friction may increase a vehicle's fuel economy by 3 percent or more.[27] Fuel-efficient oils are marked with an "Energy Conserving" label by the American Petroleum Institute.
  • Congress should authorize the president to require service stations to post prominent signs proclaiming the benefits of keeping cars tuned and using fuel-efficient oil. Signs could say: "Keep your car tuned to save gas -- for America's energy security" and "Use fuel-efficient motor oil to save gas -- for America's energy security."

6. Buy the most fuel-efficient car that meets your needs.

  • When looking to buy a new car, Americans should think about how big a car or SUV they really need. Then compare models in the same group, and pick the one with the highest miles-per-gallon rating.
  • Congress should provide tax credits for gas-electric hybrids.
  • Auto dealers could display signs saying: "Buy a high mileage car -- for America's energy security."



Notes

1. Department of Energy, "National Energy Strategy: Powerful Ideas for America," 1991, p. 3.

2. Energy Information Administration, "U.S. Crude Oil, Natural Gas and Natural Gas Liquid Resources, 1999 Annual Report," DOE/EIA-0216 (99) (December 2000).

3. Ibid.

4. Lashof, Daniel and Silva, Patricio, "A Responsible Energy Policy for the 21st Century," NRDC, February 2001, p. 7, available at www.nrdc.org.

5. If we opened the Arctic Refuge coastal plain to development today, seven to 10 years would pass before the first oil flowed through the Trans Alaska Pipeline System (TAPS) to tankers and then delivered to West Coast refineries. Oil companies starting exploring for oil at the Alpine oil field west of Prudhoe Bay in 1991. Alpine oil did not start flowing through TAPS until November 2000.

6. Lashof, Daniel and Silva, Patricio, "A Responsible Energy Policy for the 21st Century," NRDC, p. 7.

7. Ibid, p.10.

8. Calculation using same methodology referenced in endnote 7.

9. U.S. EPA, "Light-Duty Automotive Technology and Fuel Economy Trends 1975-2000," December 2000.

10. Friedman, David et al. "Drilling in Detroit: Tapping Automaker Ingenuity to Build Safe and Efficient Automobiles," Union of Concerned Scientists, June 2001, p.15, Table 4.

11. Ibid, p. xiv.

12. U.S. EPA, Press Release, "Vehicle Fuel Economy at 20-Year Low," (December 15, 2000). The press release accompanied the December 2000 "Fuel Economy Trends" report cited above.

13. Ibid, p. 45, Table 16.

14. Ibid, p. 41, Table 15.

15. Lashof, Daniel and Silva, Patricio, "A Responsible Energy Policy for the 21st Century," p.9.

16. Ibid, Appendix A: Oil Savings From Fuel-Efficient Tires and Higher Fuel Economy.

17. U.S. Department of Transportation National Highway Traffic Safety Administration, Consumer Information Regulations Uniform Tire Quality Grading Standards, 60 Fed. Reg. 27472 (May 24, 1995).

18. Comments of Clarence Hermann, Michelin, submitted in response to U.S. Department of Transportation National Highway Traffic Safety Administration, Consumer Information Regulations Uniform Tire Quality Grading Standards: Request for Comments 59 Fed.Reg. [49 CFR Part 575] (April 25, 1994).

19. U.S. Department of Transportation, Federal Transit Administration, "1996 Report: An Update," available at www.fta.dot.gov/library/policy/96/.

20. American Public Transportation Association, "2001 Public Transportation Fact Book," p. 30.

21. Nelson, Arthur C., "Effects of Urban Containment on Housing Prices and Landowner Behavior," Land Lines, Lincoln Institute of Land Policy, May 2000, p.3.

22. National Highway Traffic Safety Administration, "Many U.S. Passenger Vehicles Are Driven on Under-inflated Tires, NHTSA Research Survey Shows," press release, August 29, 2001. The NHTSA survey data are available at www.nhtsa.dot.gov/people/ncsa.

23. Calculations from Table 7.21, page 7-23, Stacy Davis, "Transportation Energy Data Book: Edition 20," Oak Ridge National Laboratory, October 2000, ORNL-6959.

24. American Public Transportation Association, "2001 Public Transportation Fact Book," p. 115 (table).

25. Van Hattum, David et al, "Implementation and Analysis of Cashing-out Employer Paid Parking by Employers in the Minneapolis-St. Paul Metropolitan Area," June 30, 2000, p. 2 (table).

26. Maryland Energy Administration, "Driving Tips for Energy Efficiency," available at www.energy.state.md.us/driving.htm.

27. U.S. EPA website, "Keeping Your Car In Shape," www.fueleconomy.gov/feg/maintain.shtml.

last revised 10/3/2001

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