Energy Policy:

Brookings' David Sandalow lays out plan to end United States' oil addiction

How should the next U.S. president approach our energy policy in order to reduce oil consumption? In his new book, "Freedom from Oil: How the Next President Can End the United States' Oil Addiction," Brookings Institution senior fellow David Sandalow lays out a plan for the next U.S. president. During today's OnPoint, Sandalow, a former assistant secretary of state and senior director of the National Security Council staff discusses the book, his thoughts on the recent international climate meetings, and what he believes lies ahead for U.S. domestic climate policy.

Transcript

Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is David Sandalow, an energy and environment scholar and senior fellow at the Brookings Institution. David is a former assistant secretary of state and senior director of the National Security Council Staff. David, thanks for coming on the show.

David Sandalow: Thanks for having me Monica.

Monica Trauzzi: Former Vice President Al Gore was just awarded the Nobel Peace Prize for his work on global warming. What significance does this have for the climate discussions happening domestically and internationally? Does it provide more momentum?

David Sandalow: Absolutely. Monica, sometimes dreams come true. No one has done more than Al Gore and the scientists of the IPCC to deserve this award. This is going to have a galvanizing effect I predict. It's going to get attention all over the world. Those of us working in this area, those of us who have mainly watched your wonderful program sometimes lose track of the fact that around the world people just aren't paying as much attention to this issue as is needed in order to really make the difference. This is going to get the covers of news magazines. It's going to get attention everywhere. So it's a tremendous decision by the committee that awards the Nobel Peace Prize.

Monica Trauzzi: Taking a look at the recent international climate meetings, has the U.S. put itself in a better position to negotiate? Do you think that they have more support from other countries or do you think that there's more of a disparity, that the disparity is clearer now?

David Sandalow: I haven't seen much sign of additional support for the Bush position. There's one thing that I think the Bush administration got right and I haven't been a supporter of the Bush administration's climate policy. I think they got on the wrong side of history and they seem reasonably determined to stay there. But I think the idea of convening major emitters and major economies to figure out how to move forward is a good idea. That type of group ought to work within the U.N. process ideally. But you know the international trade regime, for example, grew up over 50 years with bilateral agreements, regional agreements, multilateral agreements. And the climate change regime could benefit by doing the same. I think that was a good piece of the Bush approach. But unfortunately the focus on voluntary measures, I think the lack of consultation with other countries about developing an agenda has really plagued the Bush process so far. We'll see going forward.

Monica Trauzzi: How do you see the next few years playing out with regards to an international climate policy? Do you think the world is sort of going to wait until our new president comes in and then act?

David Sandalow: I think a lot of the world is determined to move forward in the next 18 months and I think that's an important development. Bali is going to be a very critical meeting. There's hope to get a strong negotiating mandate going forward in Bali. I certainly hope that that can happen. A lot of focus on a 2009 negotiating deadline and certainly the world needs to move quickly on this. So we'll see.

Monica Trauzzi: So let's talk about the next president, because in your new book "Freedom from Oil" you outline exactly how we can wean ourselves off of oil. Who do you see as the best person to play that role?

Monica Trauzzi: Oh, I think any president could play that role and that's one of the points in my book. I think this is an issue that is poised for progress. About 18 months ago I had lunch with Newt Gingrich and about 30 other people and within a few weeks I had dinner with Howard Dean. And I asked both those men the same question, which is what should we do to get off of oil? And they basically gave me the same answer. Now you know Newt Gingrich and Howard Dean are not identical twins, but they basically agreed that oil dependence is a national security problem, that ethanol is part of the answer, that we need a Manhattan Project type effort in order to solve it and that the fuel-efficiency of our fleet must improve. Certainly there are differences across the political spectrum. We're seeing some of that on Capitol Hill today. But there is more agreement than disagreement on this issue I posit. And the technologies are here or almost here to make a difference. Can I tell you about what I think the most important one is?

Monica Trauzzi: Go ahead, yes.

David Sandalow: Connecting cars to the electric grid. We have a vast infrastructure for generating electricity in this country. It does us almost no good in terms of getting off of oil. You know about 96 percent of our transportation fleet uses oil in order to move, or the energy used by this, about 96 percent oil. Our electricity is only three percent oil. And so in order to make the difference, what we need to do is make cars that connect to the electric grid. I drove over to your studios today in one that does just that. It's a plug-in hybrid. I go home every night, I connect it to a regular extension cord in my garage. Been driving around for a month, I haven't put any gasoline in the tank yet. This is a technology that's almost here. Once these cars are on the market, I'll tell you, after driving one for a month, everybody is going to want one.

Monica Trauzzi: But one concern on that point is that a lot of the electricity is coming from coal plants.

David Sandalow: A very key point and I write about this in "Freedom from Oil." Even when you plug a car into a coal plant you do better from a global warming standpoint than when you drive it on an internal combustion with oil. A lot of people don't know that. And the reason is because electric motors are so much more efficient. A regular internal combustion engine has about 18-20 percent thermal efficiency Even an old-fashioned coal plant has 30-35 percent thermal efficiency. Now our grid, as a whole, is only about half coal. And the real solution here, by the way, is to plug cars into renewable sources such as wind. In a lot of places in the country wind blows up mainly at night, so if you can plug a car in to a windmill, directly or indirectly through the grid, you can save up that wind that blows at night, put it in your car, drive it during the day, come back. It's part of the answer here.

Monica Trauzzi: The book is structured in a very interesting way. It's essentially a guide for the next president and you have little memos to the president from different people in the Cabinet. Was it written for our country's policymakers or for the average American?

David Sandalow: It was written for both. I hope that it will get a broad audience. One of the things I've tried to do is provide a bit of a lesson, not just in energy policy, but also in the way the government works. And the book opens with a memo from the president, an imaginary memo from the president saying, "I'm going to give a speech on oil dependence in a month. What should I say?" And the rest of the book are dueling memos from around the government, which is the way that these things really work. And then at the end we have a decision memo from the chief of staff to the president and a speech by the president to the nation.

Monica Trauzzi: There's a lot of talk on the Hill right now about an energy bill. I wanted to get your thoughts on the discussions that are going on. Does what the energy bill offers, does it parallel with what you talk about in the book or are certain things still missing?

David Sandalow: Well, in some ways it does. I mean what I focus on in the book are really big transformational steps. I think on plug-in hybrids for example, we need the federal government to really play a major force, like happened in World War II, with various different industrial processes. And the total government should commit to buy lots and lots of plug-in hybrids in order to provide a market pull. We need major tax credits. Some of that is in the energy bill, not that much. On biofuels we need to develop the infrastructure at all levels of the value chain. That means not just more refineries, which are being built right now, but we also need gas stations to be able to dispense ethanol and we need cars that will take ethanol as well. And of course we need incentives for cellulosic ethanol, which is ultimately the longer-term solution here. On fuel efficiency I talk in the book about automatic 4 percent annual improvements. That's being discussed on the Hill obviously. I think that's an important part of the answer.

Monica Trauzzi: Detroit has been slow to make changes though, so how does the next president convince the U.S. automakers that they need to step forward on clean energy?

David Sandalow: I think the American public is behind the next president who pushes this agenda. I think the polling is clear on this and I think Detroit is getting ready to change on this also, I really do.

Monica Trauzzi: And on fuel efficiency in the book you talk about freedom standards.

David Sandalow: Yeah, look, I think that our CAFE standards have been the topic of debate for 30 years. It's time to move beyond them. I propose standards that increase automatically 4 percent a year, eliminate the car-truck distinction, make a few other more technical changes. Let's call them freedom standards. Let's move beyond the old debate and move on to a new era.

Monica Trauzzi: In the book you recommend phasing out the ethanol import tariff. What would that do to U.S. farmers though?

David Sandalow: I think the U.S. farmers would do just great. And I say in the book that this would be a hugely controversial issue politically and I discuss some of the politics. I think anybody who takes on this agenda needs to be very sensitive to the politics. I mean that goes without saying. And I suggest this really is something to look at. American farmers are the best in the world. They've got great technology. They've got just great abilities. I think this would actually contribute to success in international trade negotiations, which are very important for U.S. farmers' export capabilities. So I think American farmers would do just great under this scenario.

Monica Trauzzi: Why haven't we gotten ourselves out of this hole yet? We've known sort of about this problem for decades. Why? Why haven't we done anything?

David Sandalow: Well, this is the question that got me to start writing the book. I'd always worked around energy issues and environment issues for many years, but I never really understood if we've been talking about oil dependence for 30 years why haven't we gotten anywhere on it? I think there are a few reasons. One of them is we've been focusing on just a smaller part of a larger problem, in particular we've been focusing on imports of foreign oil. Now that's an issue, but it's not the fundamental issue. The fundamental issue is that 96 percent of our energy in our cars and trucks use oil. You know, if I'm thirsty and I don't feel like the water you just provided me, I could ask you for a soda or orange juice. Or if I want to relax and I don't feel like watching television I can go to a movie or read a book. If I want to go someplace and I don't want to use petroleum today I'm out of luck. Maybe I can bike, if I'm not going too far. You know, that seems normal to us because we grew up with it, our parents grew up with it, our grandparents grew up with it. Actually, it's deeply abnormal to have a global transportation infrastructure that relies utterly on one fuel. And I think that's the core issue here. And in many ways we have failed to focus on that as the core issue. We need to provide electricity to the grid, biofuels, and other types of ways of moving around. So I think that's one issue, is we've been focusing on just a narrow part of the problem. We've also failed to see the economic opportunity here. The clean energy revolution is one of the biggest economic opportunities of our time. And third, and I think this is critical in any talk in Washington, DC, the short-term focus of our political dialogue has been an issue. It's true in our corporate world too. Just quickly on this. In order to solve the problem of oil dependency it's going to take a generation. We have 240 million cars and trucks on the road today that move only on oil. It's going to take a while. We need sustained commitment over a generation, then we'll get it done.

Monica Trauzzi: All right. The book again is called "Freedom from Oil" and it's a great read. Thanks for coming on the show.

David Sandalow: Thank you so much Monica.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

[End of Audio]

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