Discussion in 'Energy Futures' started by Jodi, Mar 30, 2006.

  1. Jodi


    Read Lugar's Opening Statement, then the three witnesses testimony. Things must be getting pretty scary for these guys to step up.

    before the


    Thursday, March 30, 2006

    Time: 9:30 AM
    Place: 419 Dirksen Senate Office Building
    Presiding: Senator Lugar
    Senator Lugar's Opening Statement
    Milton R. Copulos
    National Defense Council Foundation
    Alexandria, VA
    Dr. Hillard Huntington
    Executive Director
    Energy Modeling Forum
    Stanford University
    Stanford, CA
    Dr. Gary W. Yohe
    John E. Andrus Professor of Economics
    Wesleyan University
    Middletown, CT
  2. Excellent Post


    This is by far the most intelligent view of the fossil fuel issue...and makes one wonder why the Bush military approach was taken...seeing how the war costs are many times greater in terms of money....human suffering.... loss of time...and the loss of the world´s good will...

    When there is such a problem in need of must know that the military is not now...nor has ever been...nor will ever be a solution to the fossil fuel problem....

    I hope that the US truly embraces this form of thinking ...thereby unleashing its certain abilities to resolving the alternative energy solution that the world needs...and quite frankly depends on it to resolve....

    Hats off to Richard Lugar


    Senate Committee on Foreign Relations
    Chairman Richard G. Lugar
    Opening Statement for Hearing on
    The Hidden Cost of Oil
    March 30, 2006
    The Foreign Relations Committee meets today to consider the externality costs of U.S. dependence on
    fossil fuels. The gasoline price spikes following the Katrina and Rita hurricanes underscored for Americans the
    tenuousness of short-term energy supplies. Since these events, there is a broader understanding that gasoline
    and home heating prices are volatile and can rapidly spike to economically damaging levels due to natural
    disasters, terrorist attacks, or other world events. But, as yet, there is not a full appreciation of the hidden costs
    of oil dependence to our economy, our national security, our environment, and our broader international goals.
    Today, with the help of experts who have thought a great deal about these issues, we will attempt to
    more clearly define some of these costs. We are cognizant that this is a difficult and imprecise exercise. We
    are also aware that most, if not all, energy alternatives have some externality costs. But we are starting from the
    presumption that if we blithely ignore our dependence on foreign oil, we are inviting an economic and national
    security disaster.
    With less than five percent of the world’s population, the United States consumes 25 percent of its oil.
    If oil prices remain around $60 a barrel through 2006, we will spend approximately $320 billion on oil imports
    this year. Most of the world’s oil is concentrated in places that are either hostile to American interests or
    vulnerable to political upheaval and terrorism. More than three-quarters of the world’s oil reserves are
    controlled by national oil companies. And within 25 years, the world will need 50 percent more energy than it
    does now.
    These basic facts demand a major reorientation in U.S. policy aimed at reducing U.S. dependence on
    fossil fuels. Our goals must be to mitigate the short term costs of our dependence on oil, while pursuing energy
    alternatives that would reduce the international leverage of petro-superpowers, improve environmental quality,
    cushion potential oil price shocks, stimulate new high-tech energy industries, and ground the American
    economy on energy sources that will neither run out nor be cut off by a foreign supplier.
    There are at least six basic threats associated with our dependence on fossil fuels. First, oil supplies are
    vulnerable to natural disasters, wars, and terrorist attacks that can produce price shocks and threats to national
    economies. This threat results in price instability and forces us to spend billions of dollars defending critical
    fossil fuel infrastructure and choke points.
    Second, over time, finite fossil fuel reserves will be stressed by the rising demand caused by explosive
    economic growth in China, India, and many other nations. This is creating unprecedented competition for oil
    and natural gas supplies that drives up prices and widens our trade deficit. Maintaining fossil fuel supplies will
    require trillions in new investment – much of it in unpredictable countries that are not governed by democracy
    and market forces.
    Third, energy rich nations are using oil and natural gas supplies as a weapon against energy poor
    nations. This threatens the international economy and increases the risk of regional instability and military
    Fourth, even when energy is not used overtly as a weapon, energy imbalances are allowing oil-rich
    regimes to avoid democratic reforms and insulate themselves from international pressure and the aspirations of
    their own people. In many oil rich nations, oil wealth has done little for the people, while ensuring less reform,
    less democracy, fewer free market activities, and more enrichment of elites. It also means that the United States
    and other nations are transferring billions of dollars each year to some of the least accountable regimes in the
    world. Some of these governments are using this money to invest abroad in terrorism, instability, or demagogic
    appeals to anti-Western populism.
    Fifth, reliance on fossil fuels contributes to environmental problems, including climate change. In the
    long run, this could bring drought, famine, disease, and mass migration, all of which could lead to conflict and
    Sixth, our efforts to facilitate international development are often undercut by the high costs of energy.
    Developing countries are more dependent on imported oil, their industries are more energy intensive, and they
    use energy less efficiently. Without a diversification of energy supplies that emphasizes environmentally
    friendly options that are abundant in most developing countries, the national incomes of energy poor nations
    will remain depressed, with negative consequences for stability, development, disease eradication, and
    Each of these threats comes with short and long term costs. As a result, the price of oil dependence for
    the United States is far greater than the price consumers pay at the pump. Some costs, particularly those
    affecting the environment and public health, are attributable to oil no matter its source. Others, such as the costs
    of military resources dedicated to preserving oil supplies, stem from our dependence on oil imports. But each
    dollar we spend on securing oil fields, borrowing money to pay for oil imports, or cleaning up an oil spill is an
    opportunity missed to invest in a sustainable energy future.
    Certain types of costs are extremely difficult to quantify. We understand that many national security
    risks are heightened by our oil dependence. But how, for example, would we assign a dollar figure to Iran’s use
    of its energy exports to weaken international resolve to stop its nuclear weapons program?
    Yet we should do our best to quantify the externality costs of oil, so we have a clearer sense of the
    economic and foreign policy trade-offs that our oil dependence imposes on us. As the U.S. government and
    American businesses consider investments in energy alternatives, we must be able to compare the costs of these
    investments with the entire cost of oil. Public acknowledgement of the billions of dollars we spend to support
    what the President has called our “oil addiction,” would shed new light on investment choices related to
    cellulosic ethanol, hybrid cars, alternative diesel, and other forms of energy.
    As we address these questions today, we will have the benefit of a distinguished panel of experts. Dr.
    Hillard Huntington is Executive Director of the Energy Modeling Forum at Stanford University. He is a senior
    fellow and past president of the United States Association for Energy Economics. He recently coordinated two
    studies funded by the Department of Energy that evaluated the economic risks of oil price shocks. Mr. Milton
    Copulos is President of the National Defense Council Foundation. He has advised Secretaries of Defense,
    Energy, and Interior and was a member of the National Petroleum Council. He is widely published on military
    affairs and has devoted much study to the military expenditures associated with ensuring the flow of oil. Dr.
    Gary Yohe is the John E. Andrus Professor of Economics at Wesleyan University. Professor Yohe is widely
    published on the adaptation and mitigation of climate change. He recently edited Avoiding Dangerous Climate
    Change, the collection of papers on the subject that were prepared for last year’s G8 Summit.
    We welcome our three witnesses and look forward to their insights.
  3. Good article, however on the other hand, without war would the oil company's profits skyrocket? (superimpose war times and oil prices). Or, would the military complex have buyers for their retrofit JDAM's? (e.g. cost ~1000$ sold to gov for $25,000 per piece, used extensively in the war courtesy of the taxpayer)

    So, it all comes down to, who is making decisions in America and who is benefiting...

    I fully agree, all that money, over a trillion by now, should have been pumped into the domestic economy, including research and development of cleaner alternative cheap energy sources. .. But oil still is more profitable for the few...
  4. Retired


    The Israel Lobby and U.S. Foreign Policy

    In this paper, John J. Mearsheimer of the University of Chicago's Department of Political Science and Stephen M.Walt of Harvard University's Kennedy School of Government contend that the centerpiece of U.S. Middle East policy is its intimate relationship with Israel. The authors argue that although often justified as reflecting shared strategic interests or compelling moral imperatives, the U.S. commitment to Israel is due primarily to the activities of the “Israel Lobby." This paper goes on to describe the various activities that pro-Israel groups have undertaken in order to shift U.S. foreign policy in a pro-Israel direction.