With oil prices dropping down below $45USD a barrel its easy to forget the impact of $100USD+ prices of just eighteen months ago.   People were driving less and trading in their gas guzzling SUVs for more fuel efficient vehicles. Now that prices have come down there is far less pressure on American’s to use less petroleum. Today, Securing America’s Future Energy (SAFE) President and CEO Robbie Diamond issued the following statement today in response to the release of government data showing that the 2008 trade deficit for petroleum and refined products was more than $380 billion, representing more than 56 percent of the entire national trade deficit:

“This week, we once again have been presented with clear and compelling evidence of the tremendous threats posed by our dependence on petroleum, most of it imported. Petroleum and petroleum products represented more than $380 billion of our total $677 billion trade deficit in 2008. In other words, our addiction to oil accounted for more than 56 percent of our entire national trade deficit. This is an unprecedented and unsustainable transfer of wealth to other nations, many of which are hostile to American interests.

“In the long term, the only way to significantly and permanently reduce our oil imports is to significantly and permanently reduce the amount of petroleum we consume, primarily through long-term electrification of the transportation sector. In the meantime, it is crucial that Congress and the president safeguard our economy and national security. Improving fuel efficiency standards is one way to do this. Another vital step, which will reduce our trade deficit and strengthen the dollar, is to take affirmative steps toward the responsible, safe expansion of domestic oil and natural gas production. Ending our dependence on oil is a matter of economic and national security, and we cannot wait any longer.”

World Oil Expenditure as a Percent of World GDP

In September, SAFE’s Energy Security Leadership Council — a distinguished group of business executives and national security leaders led by General P.X. Kelley (Ret.), 28th Commandant of the Marine Corps, and Frederick W. Smith, Chairman, President and CEO of FedEx Corporation — released A National Strategy for Energy Security, a comprehensive set of solutions to the very real threats posed by our nation’s dependence on oil.

The National Strategy presents a bold vision: the electrification of our transportation sector, which today accounts for nearly 70 percent of the total oil consumed by the U.S. Because that is a long-term goal, the recommendations also detail the policy steps necessary to reach it while preserving our economic and national security in the short and medium term, including dramatic increases in funding and reforms to our research, development, and deployment system; demand reductions; and an expansion of domestic oil and natural gas production.

Securing America’s Future Energy (SAFE) is an action-oriented, nonpartisan organization that aims to reduce America’s dependence on oil and improve U.S. energy security to bolster national security and strengthen the economy.

According to Newsweek, the RNC spent about three million dollars to air a thirty second TV spot in Michigan, Ohio, Pennsylvania, and Wisconsin. The advertisement is (ironically) titled “Balance”.

The announcer speaks over a series of images and has this to say:

Announcer: “Record gas prices. A climate in crisis. John McCain says solve it now with a balanced plan: Alternative energy, conservation, suspending the gas tax, and more production here at home. He’s pushing his own party to face climate change. But Barack Obama? For conservation, but he just says no to lower gas taxes, no to nuclear, no to more production. No new solutions. Barack Obama: Just the party line. The Republican National Committee is responsible for the content of this advertising.”

The Newsweek story takes a little time to explore the misleading claim about Obama’s position on nuclear energy and goes on to point out that while Barack Obama does tend to vote with his party (97% in 2007), John McCain voted for President Bush’s position on Senate matters 95% of the time in 2007.

The people at FactCheck.org at the Annenberg Public Policy Center of the University of Pennsylvania go further and analyze the ad’s content line by line and claim by claim.

No to Lower Gas Taxes

Yes, its true that Obama, like many independent energy analysts, opposed the Memorial Day to Labor Day “Gas Tax Holiday” that McCain supports. Obama looked to the experts who pointed out that this “solution” would not do much to help American consumers in the near future and could quite likely create higher prices down the road as a result of the increased consumption and demand that typically accompanies reduced prices. The ad fails to mention that McCain’s “lower gas taxes” credentials are based on a three month period and will probably leave some less news junkie viewers feeling that McCain’s proposal to reduce gasoline taxes are meant to be permanent.

No to Nuclear

This claim by McCain and the RNC was already debunked in Distorting Obama but FactCheck goes into more detail in this analysis. Obama has clearly stated supports nuclear energy as long as its safe and clean and the industry addresses the long term storage of its waste products. In his comprehensive Energy plan he says “it is unlikely that we can meet our aggressive climate goals if we eliminate nuclear power from the table.” McCain is more aggressive about building nuclear power plants but does not address the findings of the International Atomic Energy Agency that show that the price of uranium has also increased fivefold since 2001 and will continue to increase with increased demand for nuclear energy. The IAEA does expect that supply will be able to keep up with demand for the next seventeen years, but there is a lot of doubt beyond that point.

No to More Production

While it is true that Obama opposes new drilling Outer Continental Shelf the ad does not mention that both McCain and Obama oppose drilling in the Arctic National Wildlife Refuge (ANWR).

The offshore drilling debate is a HUGE red herring in this debate. FactCheck and other sites have pointed out that lifting the ban put in place by Presidents Reagan and Bush would not help American consumers. The potential harm – both economically in terms of tourism money and environmentally – to coastal communities aside, any new drilling would not bring more oil to market before 2017.

The Department of Energy itself says:

The The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017. Total domestic production of crude oil from 2012 through 2030 in the OCS access case is projected to be 1.6 percent higher than in the reference case, and 3 percent higher in 2030 alone, at 5.6 million barrels per day. For the lower 48 OCS, annual crude oil production in 2030 is projected to be 7 percent higher—2.4 million barrels per day in the OCS access case compared with 2.2 million barrels per day in the reference case. Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.

Ignoring all that, the fact is we couldn’t drill for oil off shore right now even if 100% of American citizens and 100% of American politicians and 100% of American oil companies wanted to begin immediately. The NY Times reported last month that a Dearth of Ships Delays Drilling of Offshore Oil and says “Demand is so high that shipbuilders, the biggest of whom are in Asia, have raised prices since last year by as much as $100 million a vessel to about half a billion dollars.” This increased demand is spurring shipbuilders to construct more drilling ships but thats not going to solve the problem.

The NY Times article says: “Robert L. Long, the chief executive office of Transocean, the world’s largest drilling company, said he has nine deepwater rigs under construction, eight of which are already under contract for periods ranging from four to seven years once they leave the shipyards. He expects to receive the ships between the beginning of 2009 and the end of 2010.”

No New Solutions

The claim that Barack Obama has “no new solutions” for energy is an attempt to keep the Republican spun taking point alive that claims that Obama’s call for change is all frosting and no cake. This has been a central theme of the RNC ads and press releases since it became clear that Senator Obama would get the Democratic party nomination.

The FactCheck.org analysts saw this as the most misleading claim in the entire ad, saying:

The ad’s most misleading claim is that Obama proposes “no new solutions” to the intertwined climate change and energy crises. In fact, Obama has an entire Web page dedicated to his proposals for the future of energy policy. One is a 10-year, $150 billion spending plan that would go toward clean coal technology; further development of plug-in hybrid cars; and commercialization of wind, solar and other renewable fuels. The RNC and McCain may not like all of Obama’s ideas, just as Obama may not support all of McCain’s, but that doesn’t mean that they don’t exist. While McCain recently proposed The Lexington Project, which includes spending $2 billion annually toward clean coal technology advancement, McCain doesn’t have a plan comparable to Obama’s in scale of spending. In addition, Obama’s spending proposal predates McCain’s Lexington Project by over six months.

One of the most depressing aspects of American politics for me is the basic fact that many people assume that campaign ads on TV must have some basis in fact. There are laws preventing Johnson & Johnson from claiming that, in addition to not causing tears, their baby shampoo can also cure cancer and reduce your home heating bills. The Johnson & Johnson Consumer Companies, Inc. has a team of lawyers who will keep thier marketing department from stepping over the line and making the company vulnerable to lawsuits.

When it comes to political ads, like this one from the the Republican National Committee under the leadership of President George W. Bush, there is no such team to slow things up when the truth gets thrown out the window. Unlike J&J, with a brand name and reputation to maintain to guarantee future earnings, the twin brands of “George W. Bush” and “Republican party” have been so devalued over the last 7 years that there is no real incentive for the RNC and other party bodies from throwing bull manure in every direction and hoping some sticks.

Only here in China have I started to think how about big of an energy hog Americans are. We complain so much about the price of oil and electricity but we never really do anything to try to conserve energy. Here in China, it seems that everyone is trying to use the least amount of energy as possible.

Read the rest…

Over at The Asian Economist blogger Nhuong Son has written a nice article on the differences he’s seen in energy usage by students between his time at Drew University in New Jersey here in the US when compared with the rationed electricity used by students at China’s Nanjing University in the student housing.  The post is well worth reading and as an added treat, the post ends with some beautiful after dark photos of Shanghai and Nanjing.