Back to OurEnergyLibrary search




Fuel Choice for American Prosperity

Fuel Choice for American Prosperity

Full Title:  Fuel Choice for American Prosperity
Author(s):  Robert C. McFarlane and R. James Woolsey
Publisher(s):  The Institute for the Analysis of Global Security (IAGS)
Publication Date: January 1, 2013
Full Text: Download Resource
Description (excerpt):

Oil’s strategic importance stems from its virtual monopoly as a transportation fuel. Today, 97
percent of transportation fuel is petroleum based. During the past four decades since the Arab
Oil Embargo the policy consensus has been that if we only increased our domestic production of
oil and/or learned how to use less of it we would be energy secure. We have done both: America’s
domestic crude production is at its highest since 1992 and our vehicles are more fuel efficient
than ever. As a result America’s oil import dependency has dropped from 60 percent in 2005 to
36 percent today, and it may drop further still. But none of this seems to have affected the global
price of crude or the price of gasoline Americans pay at the pump. On the contrary, while our
import dependency slumped our foreign oil expenditures nearly doubled, the share of oil imports
in the overall trade deficit grew from one third to nearly a half and American motorists pay in
real terms more for fuel than ever before. Clearly something is wrong with the paradigm.

What is needed is a competitive transportation fuel market in which a variety of energy
commodities can vie with petroleum for market share. As long as the vehicles rolling onto our
roads can essentially run on nothing but oil based fuels, and consumers are thus thwarted from
making an on-the-fly choice among different fuels, America will remain susceptible to oil price
hikes emanating from the Middle East to the detriment of our economy and national security –
no matter how little oil we import from that region.

Competition is a bedrock of our American way of life. It’s time to introduce it into our fuel
market. As a first step, we must take a comprehensive view of the body of public policy that
impacts vehicles and fuels, with an eye to smoothing regulatory hurdles that circumscribe market
entry for both fuel competitive vehicles and competing fuels. Opening the door to greater
numbers of vehicles open to a variety of fuels and speeding approval of those fuels as a package
would allow for more competition. This model could then be exported to other countries that also
seek to achieve a similar goal. This report recommends fiscally conservative proposals aimed at
opening the transportation sector to competition. We urge policymakers to pursue this task as a
necessity for the future security and prosperity of our nation.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of OurEnergyPolicy.org, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

Sign up for our Press Release Distribution List

    Your Name (required)

    Your Email (required)

    Please sign me up to receive press releases from OurEnergyPolicy.org.