In the aftermath of 9/11, I had expected to see George Bush appear before the cameras and say:
“Of Course, You Know, This Means War.” Rather, he chose to resemble Yosemite Sam, running madly into the room, guns blazing, having no idea either where they would hit or where the enemy was. Ready, Fire, Aim.
Iraq was neither our enemy, nor the cause of the 9/11 attacks. But now, in the aftermath of the worst mistake in American history, the enemy has emerged, and its name is ISIS. So, if we decide, in fact, this is war, the time has come to ask the people at home to do something about it.
The first thing we should consider, therefore, is to stop, immediately, importing any and all oil from the Middle East. We are lucky it is so cheap right now, and we are also lucky that our fracking technology is so efficient that we can ramp up domestic production rather quickly.
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As of the end of 2015, the U.S. imported 9 million barrels per day (mb/d). About 1.5 mb/d came from the Persian Gulf, and that would be a good place to start, or in this case, stop. (The figure rises close to 3 mb/d if you count all of OPEC.)
Would the price of gasoline rise? Probably. However, our parents and grandparents, who went to war against Hitler and Imperial Japan, would be astonished at us for thinking we could continue to drive to the mall on cheap gas and low tax rates while the fire in the Middle East was burning out of control.
Furthermore, the mantra (unconscious and unexpressed) that it is desirable to have ‘Representation without Taxation’ is completely at odds with the impulse that led to the American Revolution. Franklin, Washington and Hamilton would be aghast, as would the Bostonians John and Sam Adams.
While we are at it, let’s also tack on a carbon tax. At $40 per ton of CO2, the price of gasoline would rise by another 40 cents. Neither of these things is going to happen, but both of them should, and they should happen now. The sooner we wean ourselves from oil, not just the Persian Gulf variety but oil in general, and the sooner we electrify transport, the sooner we can extricate ourselves from religious holy and civil wars that we do not understand and have no business getting involved in.
As luck would have it, both Tesla and GM are launching EVs that can go 200 miles per charge with a sticker price at or below the average new car price in the U.S. of $35,000. This has become possible, at scale, because the price for a lithium ion battery, per kilowatt-hour, has now fallen to around $250, on its way to $100. At that price, a 60-kWh battery, which will take you 200 miles on a charge, only costs $6,000. That leaves plenty of room in the budget for things like tires, seats and a steering wheel. Related: Oil Prices Fall Fast On Huge Inventory Build
If you want to defeat ISIS, buy an electric car. For now, though, we should be nice to our neighbors, Canada and Mexico, because that is where most of the oil we do not produce at home is going to come from until we transition from domestic fracking to electricity for transport – an infinitely scalable source of domestic energy, provided by multiple sources. One more thing, it will never run out. PV4EV rules (or soon will).
In his farewell address (June 10, 1963 at American University), President Kennedy, a war hero, concluded by stating that: “The United States, as the world knows, will never start a war.” Tragically, the world now knows he was mistaken. However, he did add this: “We shall be prepared if others wish it.”
And now they do, for we have awakened a nest of sleeping scorpions and filled them with a terrible resolve.
By Henry Hewitt of Oilprice.com
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