U.S. Anti-Terrorism Strategy — First Kill All the SUVs

Do you think Americans are willing to change their way of life in light of the terrorist attacks?

October 17, 2001

Do you think Americans are willing to change their way of life in light of the terrorist attacks?

With their unquenched thirst for gas-guzzlers and energy-intensive appliances, U.S. consumers have to confront an uncomforting reality. As they pay the bill for filling up their behemoths — with some of the cheapest gasoline in the developed world — they may ultimately be feeding the very mouth and hand out to destroy them.

Iraq, Iran and Libya between them account for 10% of the world’s oil production. And it is well known that some individuals in Saudi Arabia — the world’s largest oil producer that alone controls 11% of output — are quite willing to funnel money from their oil earnings to the cause of extreme organizations. Enough of that money, it is believed by experts, finds its way into the pockets to sustain the operations of anti-western terrorists.

Achieving a fundamental reversal in America’s dependence on oil is not impossible — provided the political will is there. After all, the country built up the world’s largest military establishment largely from scratch in just a few months after the sneak attack on Pearl Harbor in 1941.

Why not undertake a similar “mobilization” again — but this time with the aim of drastically improving the energy efficiency of the U.S. economy?

The biggest gains in oil efficiency can be made in the transportation sector, by requiring higher gas mileage and more efficient engines, by subsidizing and investing in public transportation and by changing land development patterns to reduce the country’s dependence on cars. The United States accounts for only 5% of the world’s population, but consumes 43% of the gasoline.

Clean technologies — such as cars with hybrid engines or fuel cells — combine the technical advantages of electric cars with the performance standards of conventional vehicles, and are already available for mass production or are at least in advanced stages of development.

One good example is the super-efficient Toyota Prius, the world’s first mass-produced hybrid car. But now is the time for significant government intervention to make possible the production of such vehicles on a much larger scale.

It is easy enough to argue against “industrial policy” in normal times, but these are not normal times. The President, and many members of the U.S. Congress, have declared that the United States is essentially at war.

They might be well advised to recognize the need to switch to a “wartime” economy — at least in the area in which the United States is most vulnerable in this particular war.

Such a war economy demands substantial government intervention — in the form of direct government regulations, tax breaks for energy saving technology and subsidies for the production and purchase of vehicles such as the Prius.

The specific goal is clear: reducing America’s — and, just as important, the world’s — dependence on one commodity which, unfortunately, provides critical financial resources for the enemy.

That is as clear a goal as outlined by President Kennedy in 1961, when he declared “I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.”

The United States then succeeded spectacularly in fulfilling that president’s promise.

There is no reason a similar government-led and funded effort could not drastically reduce energy use in the United States today.

Of course, such measures would have to be implemented very carefully, in order not to further damage the already fragile economy. But most economists agree that a major boost in demand is needed to get the economy kick-started again. Tax breaks and subsidies for environmentally friendly technologies could therefore become an important part in providing a stimulus to the economy.

Lessening the dependence on oil does require unpalatable choices. But unless Americans have a desire to be hostages of Middle Eastern politics for good, they will be prepared to do so. A key ingredient will be determined leadership. President Bush has already announced that this will be a “long war” — and that it will “require sacrifices.”

Once the U.S. administration has dealt with the immediate crisis, it will have to turn to longer-term policy changes. Just like some restrictions on the CIA and the FBI in dealing with terrorists will be lifted, President Bush needs to make his energy policy a part of countering terrorists.

This might be hard policy advice for a President from Texas — who spent most of his professional life in the oil industry — to swallow. But, on the other hand, it is an opportunity to demonstrate real leadership.

There is another reason why such a policy shift should be an important long-term goal. Nobody is worrying about the price of oil right now. In fact, while the price of oil shot up as high as $45-50 a barrel during the Gulf War in 1991, the current crisis has hardly had an impact on prices at all — at least as of yet.

But Americans are lulling themselves into another false sense of security. Saudi Arabia — which is widely viewed as a pro-western pillar of stability in the region — can quickly become part of another domino theory.

The current crisis may expose brutally all the false compromises that Saudi Arabia’s rulers have tried to get away with for decades. The implications for the oil price are clear. And the only way to protect oneself against such a scenario is to be less dependent on countries such as Saudi Arabia.

The United States cannot go it alone. Other countries around the world need to take aggressive steps as well to reduce demand for oil as well. Europeans and the Japanese, however, are generally much further along in saving energy than their American counterparts.

And, once America decides to act, the benefits will be global, for example through new technologies that will “trickle down” and enable other countries to reap efficiency gains.

The stakes are high enough to make the choices very clear. As part of the country’s war against terrorism, a fundamental reorientation of the U.S. economy away from oil must be a prominent goal.