combatting an environmentally-harmful reliance on petroleum for transportation

Ben Black Combatting an Environmentally-Harmful Reliance on Petroleum for Transportation

April 9, 2014

CAS 138T

“We’re borrowing money from China to buy oil from the Persian Gulf to burn

it in ways that destroy the planet. Every bit of that’s got to change” (Gore). Former

Vice President Al Gore gave this straightforward description of what he sees as

America’s most daunting problem during a speech in 2008. The Former Vice

President addressed an enormous spectrum of challenges, but the analysis of a

specific binary can result in feasible solutions and an acknowledged need for action.

The American reliance on a limited supply of petroleum for transportation of

people, food, and other goods is a catastrophe with a definitive timeline, and actions

to remedy this addiction and its disastrous effects on the environment are required,

such as an adaptation of the 2009 ‘Cash For Clunkers’ program.

Despite ongoing debate and discussion, American reliance on petroleum and

other fossil fuels is a challenge that must be addressed due to the massive

repercussions on transportation that a lack of supply would cause. First, it is

essential to identify that a rather definitive timeline exists for the world’s remaining

supply of oil. According to the U.S. Energy Information Agency, the worldwide

proven reserves, or remaining oil, total to about 1.5 trillion barrels (one barrel of oil

constitutes forty-two gallons). It is likely that more oil will be found or accessed by

improving technologies, but these additions will do little to change the EIA’s current

data (EIA.gov). The International Energy Agency estimates that approximately 32

billion barrels of petroleum are consumed each year worldwide (IEA). This data

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shows that, at present consumption, there are approximately 46 years of petroleum

left.

Such challenges are particularly acute when one considers the impending

competition that will take place for remaining energy resources, particularly among

developing nations that will greatly add to demand. Beijing estimates that 2,000

new vehicles are put on the roads each day (Black 231). Such an increase in

consumption could mean that less than the estimated 46 years of petroleum remain.

In the United States, a large portion of the oil that is consumed is imported. The EPA

reports that 40% of the petroleum that is consumed in the U.S. is imported, which

causes the safety of the supply of oil in places such as the Middle East to become a

national security concern to the American Government (EPA). Brian Black writes in

Crude Reality that a future where countries rely upon petroleum that exists in an

ever-dwindling supply would be “destined to lead to more and more aggressive

wars and conflict regarding oil supplies – clearly, a crude reality of the most dire

sort” (Black 232).

Apart from personal transportation repercussions, the transfer of goods

would be highly inhibited by a lack of oil. One of the most detrimental effects of a

petroleum shortage could be a scarcity of food and other essential resources. The

Center for Urban Education about Sustainable Agriculture estimates that the

average American meal travels 1,500 miles before arriving at the place where it will

be eaten (cuesa.org). Without petroleum to power freight trucks, trains, or even

planes, food would not be accessible to a vast majority of the country. When the

disastrous effects that a limited supply of a resource, which is vital to global

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societies and economies, are aggregated, the need for a plan to prepare for this

future without oil becomes a time-sensitive necessity.

Although several actions are required, one effective means of both limiting

petroleum usage and the harm that transportation causes to the environment is a

revitalization of the short-lived ‘Cash For Clunkers’ program. In 2009 this program

was initially enacted with a $1 billion budget, later that year extended to $3 billion

due to popular demand. Under the program, individuals could trade in a vehicle

that achieved 18 mpg or less for a $3,500 to $4,500 ‘bonus’ towards a vehicle that

ran at 10mpg more than the car that was traded in. According to the Executive

Office of the President’s Council of Economic Advisors, the ‘Cash For Clunkers’

program increased the sale of light motor vehicles from 10 million units to 14

million units during two months that the appropriated funds lasted for, an increase

at a rate that had not been seen in previous data (CEA). In its revitalization, the

specifications should be changed so that any vehicle achieving 25 mpg or less can be

traded in for a vehicle that is 15 mpg more fuel-efficient. A larger appropriation

should also be given to the program, as the $3 billion allotted in 2009 lasted less

than two months.

In order to ensure the success of the Car Allowance Rebate System, analyzing

the flaws in the 2009 enactment of the program is essential. Several prominent

institutions would argue that the program failed to provide the economic stimulus

that was its purpose (Brookings). However, ‘Cash For Clunkers’ should not be seen

as an economic stimulant, but, rather, as a program to reduce fossil fuel

consumption and increase demand for fuel-efficient cars in the future. Additionally,

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almost all of the cars that were traded-in were simply scrapped by the government.

It would be far more advantageous to sell reusable parts and to recycle the metals

and other materials. Finally, most Americans who took part in the program traded

in American-made cars for foreign vehicles, simply because they were better quality,

far more fuel efficient, and less expensive. 20% of the newly purchased cars, for

which the U.S. Government provided a sizeable rebate, were sold by Toyota, and

with General Motors selling 18% of newly purchased vehicles (Brookings). In

formulating a successful plan, it is important to first rectify the problems that

plagued the 2009 iteration of the Car Allowance Rebate System.

In 2009, the American Corporate Average Fuel Economy (CAFE) standard

was 28 mpg, as it had been since 1990. A level mileage standard not only

discourages sale of more fuel-efficient cars, but it also deters the development and

research of the technologies that enable the production of them. Concurrently with

the government bailout of the auto industry in 2009, the Obama Administration and

the major car companies reached an agreement to increase CAFE standards. All

model year 2016 cars must achieve 35.5 mpg, and by model year 2025 that will

increase to 54.5 mpg (EPA). Such an increase has required American car

manufacturers to develop hybrid electric cars and competitively price them in

response to highly successful vehicles such as Toyota’s Prius. For instance, the U.S.

Department of Energy estimates that an individual who drives a Prius (which gets

50 mpg) saves about $6,500 in fuel costs over five years in comparison to an owner

of the average new vehicle (fueleconomy.gov). The Environmental Protection

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Agency expects that, from the increased CAFE standards alone, American consumers

will save a total of $1.7 trillion in reduced fuel costs (EPA).

With the proper funding, a re-visitation of the Car Allowance Rebate System

would not only work, but would provide the U.S. auto industry with incentives to

become both more environmentally friendly and consumer friendly in terms of

petroleum consumption and costs. The implementation of the ‘Cash For Clunkers’

program in 2009 proves that such a program can be enacted, and also provides the

opportunity to fix the flaws that were observed. As the Brookings Institution found

in its report, the Car Allowance Rebate System is not the most effective means of

economic stimulus, but this should not be seen as the purpose of the ‘Cash For

Clunkers’ Program. The purpose of this program is to incentivize competition in the

fuel-efficient hybrid vehicle market, decrease petroleum consumption and thereby

fuel costs to consumers, and reduce the greenhouse gas emissions caused by

burning gasoline in enormous quantities. Although such investments into

renewable energies to power transportation may not be economically advantageous

at present, they are required for the global economy to prepare for an eventuality

without petroleum.

As opposed to other solutions, ‘Cash For Clunkers’ incentivizes fuel-efficient

cars without constraining the market or over-regulating the auto industry. The

program leaves most of the change up to the free market, but nudges the car

industry in a fuel-efficient direction that is necessary to transition out of a

transportation system that is wholly reliant on petroleum. The CAFE standards

were agreed upon, rather than required of U.S. automakers, and the Car Allowance

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Rebate System ensures that American companies are still competing with

international firms. Although it will be an initially costly program, taxpayers will

save thousands of dollars at the pump, and these changes are essential to ensure

that transportation and the exchange of goods can be sustained in the future.

The enactment of this policy faces many challenges, mostly from businesses

and individuals that are financially invested in the status quo. Petroleum

companies stand to lose revenue from a more fuel-efficient American vehicle fleet,

and the owners of those companies have massive lobbying operations that hold

significant sway in Washington, and would surely be used to combat such a

proposal. Other countries have taken strides to prepare for a future that does not

present the world with an abundance of petroleum, such as Brazil, which invested

extensively in ethanol in the 1980s to the point where 85 percent of Brazilian

vehicles now run on ethanol (Black 226). Winston Churchill famously observed

“Americans will always do the right thing, only after they have tried everything else”

(Horsley). This must not also become applicable to fossil fuel consumption,

environmental deterioration, and securing the future of transportation. Feasible

actions can and must be taken, despite the powerful actors who stand to gain from

the maintenance of the status quo. ‘Cash For Clunkers’ stands to possibly end the

harmful binary of burning fossil fuels for transportation that inevitably cause

environmental deterioration and make American society unsustainable; timing is

critical, and there is foreseeably less and less the longer the United States waits to

act.

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Work Cited

Black, Brian. Crude Reality: Petroleum in World History. Lanham, MD: Rowman &

Littlefield, 2012. Print.

"Compare Side-by-Side Fuel Economy." Fuel Economy. U.S. Department of Energy,

n.d. Web. 06 Apr. 2014. <https://www.fueleconomy.gov/feg/Find.do?

action=sbs&id=31767>.

Gayer, Ted, and Emily Parker. Cash for Clunkers: An Evaluation of the Car Allowance

Rebate System. Rep. Brookings Institution, 31 Oct. 2013. Web. 2 Apr. 2014.

<http://www.brookings.edu/~/media/research/files/papers/2013/10/cas

h%20for%20clunkers%20evaluation%20gayer/

cash_for_clunkers_evaluation_paper_gayer.pdf>.

Gore, Al. "Al Gore's Speech On Renewable Energy." NPR. NPR, 17 July 2008. Web. 04

Apr. 2014. <http://www.npr.org/templates/story/story.php?

storyId=92638501>.

Horsley, Scott. "A Churchill 'Quote' That U.S. Politicians Will Never Surrender." NPR.

NPR, 28 Oct. 2013. Web. 06 Apr. 2014.

<http://www.npr.org/blogs/itsallpolitics/2013/10/28/241295755/a-

churchill-quote-that-u-s-politicians-will-never-surrender>.

"How Far Does Your Food Travel to Get to Your Plate?" CUESA. The Center for Urban

Education about Sustainable Agriculture, n.d. Web. 06 Apr. 2014.

<http://www.cuesa.org/learn/how-far-does-your-food-travel-get-your-

plate>.

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"International Energy Statistics - Petroleum." International Energy Statistics. U.S.

Energy Information Administration, 2013. Web. 04 Apr. 2014.

<http://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?

tid=5&pid=57&aid=6>.

"Oil FAQs." IEA. International Energy Agency, n.d. Web. 04 Apr. 2014.

<http://www.iea.org/aboutus/faqs/oil/>.

United States. Environmental Protection Agency. Office of Transportation and Air

Quality. EPA and NHTSA Set Standards to Reduce Greenhouse Gases and

Improve Fuel Economy for Model Years 2017-2025 Cars and Light Trucks. N.p.:

Environmental Protection Agency, 2012. Print.

United States. Executive Office of the President. Council of Economic Advisers. The

White House. Executive Office of the President, 10 Sept. 2009. Web. 2 Apr.

2014.

<http://www.whitehouse.gov/administration/eop/cea/CarAllowanceRebat

eSystem>.

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combatting an environmentally-harmful reliance on petroleum for transportation

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