Amid a spike in gasoline prices and a bout of concern over the safety of nuclear power, President Barack Obama called Wednesday for America to “finally get serious” about energy policy, and he laid out a specific new target: to cut oil imports by one-third by 2025.
The president’s goal drew applause from an audience at Georgetown University.
But it also prompts some obvious questions: How hard will it be for America to reach that goal? Is it the right goal to reach for?
On the first question, Obama’s objective will require some effort to reach, but it’s not as ambitious as it might sound at first. In his speech, Obama set the baseline at 2008, when America was importing 11 million barrels of oil per day. Imports are lower today, and the U.S. Energy Information Administration currently predicts that imports will be around 9.4 million barrels per day in 2025.
The agency’s forecast involves a lot of guesswork, but if it’s correct, then America would get about halfway toward Obama’s goal without any new shift in policy or consumer behavior.
On the second question, many energy experts like the idea of America becoming less reliant on imported oil. But they also note that the price of oil, even oil produced domestically, depends on what happens in a global marketplace where other nations are selling and buying barrels — and where events in places like Libya or the Persian Gulf can have a big impact.
To some policy analysts, the president missed an opportunity in framing his objectives around imports.
“It’s the wrong goal,” says Anne Korin, who leads Set America Free, an energy-policy coalition that includes business and environmental leaders. “The focus has to be on reducing the strategic importance of oil” in the economy.
She points to Britain, where truckers staged protests over fuel prices in 2008 even though the country isn’t reliant on imports. The more fundamental dependence problem is that transportation — a vital sector of the economy — is dominated by fuels derived from oil.
Korin argues Obama should have framed his energy agenda around the concept of choice in vehicle fuels — enabling consumers to benefit from direct competition between gasoline and other fuels. In the short run, that could mean calling on carmakers to make most of their vehicles capable of running on biofuels or methanol as well as gasoline. This idea is already embraced by some members of both parties in Congress. Backers of an “Open Fuel Standard Act” include Sens. Sam Brownback (R) of Kansas and Maria Cantwell (D) of Washington.
In the longer run, electric and hybrid vehicles could play a growing role in breaking oil’s near-monopoly.
To some extent, there’s overlap between Obama’s energy blueprint and that of critics like Korin. Obama talked a lot about transforming America’s transportation sector, hitting on everything from biofuels to electric vehicles and from mass transit to the potential for natural gas to power cars.
But the overlap comes partly because Obama touched on so many ideas in his speech. Obama’s plan for reducing imports includes more U.S.-based oil production, higher automotive fuel efficiency, and developing new power sources.
Also, Obama repeated his recent calls for doubling the share of electricity generated by “clean” sources, to 80 percent by 2035. Those sources would include renewables and nuclear as well as clean coal. (Oil is only a bit player in supplying electricity, but these changes could allow utilities to power more cars on electricity without pumping as much carbon into the atmosphere.)
Reaching the goal of a one-third cut in imports depends on many marketplace factors that are hard to predict. As the world has seen in the past few years, oil prices and consumption can swing dramatically based on conditions like a recession and unrest in North Africa.
“But when you look at the long-term trends, there are going to be more ups in gas prices than downs in gas prices,” Obama said, noting the rising demand from emerging markets like China.