The car is the greatest modern symbol of American freedom…cars are a
powerful symbol of what makes America the greatest, and the freest, country
in the World.
John Bragg, Center for the Moral Defense of Capitalism, 2001
While the developments in the world oil industry, described in the preceding
chapters, were taking place, the economy of the USA experienced major changes.
Between 1970 and 2000, the catalyst of the cold-war armaments and space race
led to the birth of the computer industries and the so-called‘knowledge economy’.
Older companies, like IBM, transformed themselves into new providers of
desktop computers; new companies, like Microsoft, grew from humble beginnings
to become mega-corporations; and California’s Silicon Valley came to epitomise
the ‘asset-light, knowledge-heavy’ world of information and telecommunications
technology.
And yet the most remarkable aspect of this thirty-year period of economic
transformation was the extent to which it left the cars-plus-oil economic base
still broadly intact. Indeed, between 1991 and 1999, while public attention was
focused on the rapid expansion of the ‘new economy’, US production of ‘light’
motor vehicles increased by a remarkable 48 per cent.1
In 1997, with the information technology and telecommunications boom in
full spate, the three companies at the top of Fortune Magazine’s 500 largest US
Corporations were still General Motors, Ford Motor Company and Exxon.2
In
1999, the USA produced 13 million motor vehicles, a record production level
which beat the previous record set in 1978 and comfortably exceeded the 9.9
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9 America the
Motorised
million production level of its nearest rival, Japan.3
According to a study carried
out by the University of Michigan and commissioned by the Alliance of
Automobile Manufacturers,‘The automotive industry is the largest manufacturing
industry in the United States. No other single industry is linked to as much of
US manufacturing or generates as much retail business and employment.’4
The
study was able to demonstrate ‘the high level of indirect employment in the
private non-manufacturing sector that is linked to automotive manufacturing’,
and cited ‘business and professional services, wholesale trade, trucking, and
finance’ as examples of sectoral employment which is‘more linked to the supplier
network for automotive manufacturing than is often recognised’.5
It concluded
that, when allowance is made for all the private-sector industrial and nonindustrial
(service) activities which provide inputs to the core motor
manufacturing sector, and when the impact of the expenditure of automotive
industry-generated incomes on other non-automotive sectors is taken into
account, the total employment created was 6.6 million.6
Another report by the US National Research Council in 2003 stated that one
in every six workers in the USA ‘deals in some way with automobiles and trucks
– making them, driving them professionally, insuring them, licensing them, and
building and maintaining highways for them’.7
It also argued that, ‘The impact
of the automotive industry on society is unlike that of any other industry. The
automobile is not just a technology or mode of transportation; it is a fundamental
determinant of the entire economy.’8
The extent to which the automotive industry has remained extremely
important to the US economy can also be gauged by what happened between
1999 and 2002. As the millennium drew to a close, the hectic pace of the IT and
telecommunications boom, and the general explosion of stock market prices
which accompanied it, stalled and then began to collapse. It was then that the
importance of the automotive industry once again became apparent. By reducing
interests rates on vehicle finance deals – to zero in many cases – the automotive
industry was able to sustain and even increase US consumer spending, with all
the multiplier effects which have been described above.9
US sales of motor
vehicles in 1999, which at 17.4 million were already at record levels, continued
to increase: to 17.8 million in 2000, remaining at slightly below that level (17.7
million) in 2001.10
Of course, the American car industry has itself changed since the early
1970s. About a third of light vehicles purchased in the USA are now produced
by a foreign manufacturer, either directly imported or manufactured in a
foreign-owned US branch plant. Competition is fierce and the profitability of car
making has plummeted: General Motors now makes more money from finance
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than from manufacturing. However, in spite of the fact that imports of vehicles
from Japan, Germany and South Korea rose substantially during the 1990s, on
balance, these developments did not prevent the continued growth of the
domestic US automobile industry, as we have observed.
WOULD JESUS DRIVE AN SUV?
However, one particular change in the US motor vehicle industry has also had
important implications for the growth in US oil consumption. The share of
‘light trucks’ in total light vehicle sales – including the fashionable sports utility
vehicle (SUV) category – has grown rapidly since the 1980s. In 2000, for the first
time, US sales of ‘light trucks’ exceeded sales of standard automobiles.11
SUVs
and other types of light truck have lower fuel economy standards than
automobiles. Until a very modest increase introduced in an April 2003 rulemaking
decision by the National Highway Traffic and Safety Administration (NHTSA),
an average fuel economy of 20.7 miles per US gallon was permitted for light
trucks compared with 27.5 mpg for automobiles.12
However, SUVs provide
higher profit margins to both manufacturers and dealers than standard
automobiles. For this reason, the corporate strategy of the so-called ‘Big Three’
of US motor vehicle manufacturing – General Motors, Ford and Chrysler (now
Daimler-Chrysler) – has been to increase the share of light trucks in their total
light vehicle output. Between 1985 and 2001, this share increased from 27 per
cent to 63 per cent. In other words, the traditional core of the US motor vehicle
industry has come to concentrate on the part of the market which contributes
disproportionately to the USA’s petroleum deficit.
In the aftermath of the 11 September terrorist attacks, the link between
SUVs and America’s dependence upon ‘Arab oil’, together with the vehicle’s
contribution to environmental pollution, led some Americans to begin to question
the growing popularity of the SUV. In November 2002, General Motors’ HQ was
the scene of a lively demonstration by bishops, Jewish activists and evangelical
Christians, who appealed to the company to ‘take up the moral challenge’ of
building fewer of the gas-guzzling vehicles. One group of campaigners, the
Evangelical Environmental Network based in Pennsylvania, launched their own
TV advertising campaign against the SUV, asking, ‘What would Jesus drive?’13
The campaign’s leader, the Revd Jim Ball, argued that vehicle pollution was
having a damaging impact upon God’s creation.‘We are spreading the word that
to love our neighbours and care for creation, automakers and politicians need
to build cars that reflect our moral values.’ Other campaigners underlined the
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link between the SUV and rapidly growing oil imports from countries which
they saw as harbouring terrorists.
However, Ball’s message was rejected by other US evangelicals, many of
whom are enthusiastic SUV drivers. The Revd Pat Robertson condemned the
anti-SUV campaigners: ‘I think the concept of linking Jesus to an anti-SUV
campaign borders on blasphemy, and I regard it as a joke,’ he declared. Joining
the fray, the Sports Utility Vehicle Owners of America published a full page
advert in USA Today, featuring an individual of Hispanic origin called Jesus
Rivera standing proudly in front of his SUV and declaiming that this Jesus
certainly loved his SUV. In similar vein, a spokesperson for the Alliance of
Automobile Manufacturers, proclaimed that Jesus ‘may well choose an SUV so
that several of his apostles could travel with him’.14
AVERAGE AMERICANS AND THEIR CARS
Let us now pay a brief visit to Mr and Mrs Average America and their almost
totally motorised way of life at the beginning of the twenty-first century.
Together with their teenage daughter, the‘AAs’ lived in the suburbs of a large US
city. Since they were the average American household they owned two cars and,
as such, they belonged to the 38.6 per cent of America’s 104,700,000 households
who did so, a proportion which had increased from 34 per cent in 1980.15
However, since they would shortly be purchasing a car for their 16-year-old
daughter, the AAs would soon stop being ‘average’ and form part of the 18.3 per
cent of US households who owned three cars, a proportion which had increased
from 17.5 per cent in 1980. Once acquired, their daughter’s new car would be just
one more to add to the 215,580,000 registered vehicles (cars, trucks and buses)
owned by US drivers, a number which had increased from 155,796,000 in 1980.
In 2000, Mr and Mrs AA decided to take advantage of the low interest
finance deals on offer to replace Mr AA’s existing car and to buy a vehicle for
Mrs AA. Both the AAs were working and between them they travelled 6,492
vehicle-miles to and from their places of employment each year. However this
was only 26 per cent of the total 24,800 vehicle-miles per year which their family
travelled, including shopping, family visits, holidays etc.
Mr AA had recently considered joining the 5.2 per cent of US employees
who used the public transport system to travel to work (a proportion which had
fallen from 6.4 per cent in 1980), but since the time spent travelling would have
been about 42 minutes as opposed to the 20 minutes average by car, he had
abandoned this idea. When told that in Western Europe 20 per cent of
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employees travel to work by public transport, Mr AA imagined it was because
they are not wealthy enough to own a car. Mrs AA was previously one of the 11.2
per cent of US employees who got a lift to work with a friend (a proportion
which had fallen from 19.7 per cent in 1980), but now that she could afford to
have one she was going to purchase a car of her own.
Both the AAs liked the idea of supporting domestic manufacturing so they
both bought Fords. Mr AA purchased a Ford Taurus sedan with a 3-litre, 6cylinder
engine, a city fuel economy of 20 miles-per-US-gallon and a highway
mpg of 27. For Mrs AA they purchased a Ford Explorer sports utility vehicle
(SUV) with a 4-litre, 6-cylinder engine, a city mpg of 14 and a highway mpg of
19. When answering a customer survey a couple of years previously, they were
among the 50 per cent of consumers who said they were considering buying a
SUV for their next vehicle purchase.16
They were also among the 30 per cent of
consumers who said that safety was the most important attribute when purchasing
a new vehicle. The AAs were not among the mere 11 per cent of consumers who
gave ‘fuel economy’ as their chief vehicle attribute preference. Their newly
purchased SUV was just one of the 9.1 million‘light trucks’ (SUVs, campers and
pick-ups) sold in 2000 which, for the first time, outsold the number of standard
automobiles purchased (8.9 million).17
Light trucks had been steadily gaining
market share since the early 1980s, when the minivan was introduced, but now
SUVs were not only replacing cars but over the past few years were replacing
other kinds of light truck as well.
The AAs prefer to drive large, powerful vehicles. In 2000, only 24.4 per cent
out of a total of 17 million vehicles purchased were small cars, a proportion
which had fallen from 38.5 per cent in 1991 and from 41 per cent in 1981.
Indeed, according to AutoPacific, a California-based car industry consultancy,
in a recent survey only 7 per cent of new-vehicle buyers said they would
consider a small car for their next vehicle purchase.18
Large sedans and SUVs are
preferred because not only are they more spacious and comfortable than small
cars but, in the opinion of most Americans, they are also safer. Sharing this
belief, Mr AA is now trying to persuade his 16-year-old daughter against having
a small car. She says she would like a little Chevrolet Cavalier but he’d rather put
the same $10,000 to $12,000 into a three-year-old Mercury Grand Marquis,
mainly for safety reasons.
His thoughts on this matter were strongly influenced by an article he read in
the 2 July 1999 edition of USA Today called ‘Death by the gallon’. Written by
James Healey, the news magazine’s motoring correspondent, the article claimed
that the introduction of fuel economy standards for new vehicles in the aftermath
of the 1973 oil crisis had caused thousands of deaths. In an analysis of crash data
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since 1975, when the Energy Policy and Conservation Act was passed, USA
Today’s correspondent calculated that ‘46,000 people have died in crashes they
would have survived in bigger, heavier cars.’ Although the average miles per
gallon of vehicles on US roads was now 20 mpg as compared with 14 mpg in
1975, the cost of this reduction‘has been roughly 7,700 deaths for every mile per
gallon gained’. Small cars, it was claimed – those no bigger or heavier than
Chevrolet Cavalier or Dodge Neon – comprised 18 per cent of all vehicles on the
road yet they accounted for 37 per cent of vehicle deaths in 1997 – 12,144
people. ‘That’s about twice the death rate in big cars such as Dodge Intrepid,
Chevrolet Impala, Ford Crown Victoria.’ Healey supported this argument by
quoting Mr Brian O’Neill, President of the Insurance Institute for Highway
Safety, who says, ‘We have a small-car problem. If you want to solve the safety
puzzle, get rid of small cars.’19
Bill Lovejoy, General Motors group vice-president, clinched it for Mr AA
when he said,‘When my kids were coming of age, I made sure they had big cars
to drive. It’s physics. When a large car meets a small car in an accident, the large
car wins.’20
FUEL ECONOMY DECLINES, BUT SO DO MOTORING COSTS
The Corporate Average Fuel Economy (CAFE) standards introduced in 1975
required the average fuel economy of all new cars sold by a US car manufacturer
to be at least 27.5 mpg: that is some of their cars could be above that as long as
others are below. Automobile makers who fall short are fined. However, as we
have already noted, until very recently (April 2003), new ‘light trucks’ were only
required to have a fuel economy of 20.7 mpg. SUVs with their lower average fuel
economy are classed as light trucks, not passenger cars, a loophole in the law
which American lovers of big engines and big cars have been able to exploit.
Even so, the CAFE standards have been under constant attack by US motorindustry
executives and free-market ideologues, who reject what they see as
government interference in business decisions and consumer choice. CAFE has
been ‘a bad mistake, one really bad mistake. It didn’t meet any of the goals, it
distorted the hell out of the new car market,’ said Jim Johnston, fellow at the
American Enterprise Institute and retired General Motors president who
lobbied against the 1975 law.21
For many Americans, driving large cars is a basic right. Attempts to impose
higher CAFE standards for SUVs have become the object of vitriolic attack by
organisations like the Cato Institute, the Competitive Enterprise Institute and
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the Centre for the Moral Defence of Capitalism. John Bragg, a policy analyst
with the last-named centre, pokes fun at the environmentalists’ attack on SUVs
asking, ‘Why would anyone build these horrible engines of death?’ answering
‘They build them because SUVs have advantages in safety, cargo space and
power that Americans demand.’ According to Bragg,‘The minivan and the SUV
gave America the powerful, spacious vehicles that they had demanded before
regulations – they were our reply to Washington’s attempts to force everyone
into smaller cars.’22
Mr AA agrees; and he also agrees with the editorial he has read in his copy
of the Wall Street Journal, that ‘CAFE standards were the environmental lobby’s
attempt in the 1970s to force “gas-guzzling” Americans to abandon cars that
were comfortable and safe in favour of motorised tin cans.’ Americans
responded ‘by ignoring cars and buying SUVs’.23
Because of the growing popularity of SUVs and other light trucks, the average
fuel economy of new light vehicles actually fell during the 1990s. Between 1973
and 1987 it improved from 14 mpg to 26.2 mpg as a result of the introduction
of the CAFE standards. Since then, the fuel economy of new automobiles and
light trucks remained more or less constant. But because light trucks increased
their market share at the expense of standard automobiles, the fuel economy of
the average light vehicle sold fell from 26.2 in 1987 to 24.7 mpg in 2000.24
Mr and Mrs AA spend 17.4 per cent of their family budget on motor vehicle
transportation (capital as well as running costs), approximately the same as for
an average European family. It is the second largest item of expenditure after
housing. Their ‘freedom’ to drive cars and SUVs which are considerably larger
and more powerful than European cars is therefore contingent upon the
‘affordability’ of the vehicles purchased and the availability of cheap fuel.Although
the average real price of a new automobile increased between 1990 and 1999,
from $19,753 to $21,420, the average rate of interest charged in car finance deals
fell from 12.15 per cent to 7.96 per cent. Since wages and salaries also increased
between 1990 and 1999, the Automobile Affordability Index (AAI), which
expresses the full cost of an average automobile, including finance charges, in
terms of weeks of salary, fell – from 29.4 weeks in 1990 to 23.8 weeks in 1999.
Indeed, in 1999 the AAI was almost the same as it was in 1979 (23 weeks).
US gasoline prices are lower than in any other developed industrialised
country and in 2000 were at about the same level as those in China ($1.47 in the
USA, $1.44 in China). In fact, a gallon cost less than a large bottle of mineral
water ($1.90).25
After allowing for inflation, the ‘real’ price of a gallon of US
gasoline in 2001 was only 3.6 per cent higher than in 1978 and between 1991
and 1999 it was substantially below the 1978 real price.26
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The huge difference in price between the USA and the other industrialised
countries is primarily due to the low level of tax on gasoline. In 1999 tax
accounted for 33 per cent of the US price, whereas in Canada it was 49 per cent,
Japan 59 per cent and the UK 76 per cent. Roughly the same differences also
apply in the case of diesel fuel.27
This difference in taxation also has an important
implication. The lower proportion of tax in the final price of gasoline at the
filling station in the USA means that the contribution of crude oil cost to the
final price is proportionately larger. In turn, this means that the final price is
more highly geared to the crude price in the USA than in other, more highly
taxed countries. In this sense US motorists are more exposed to the vagaries of
the world oil market than elsewhere and in such a highly motorised society they
are especially sensitive to the fluctuations in the gasoline price which accompany
those in the crude oil price. Furthermore, according to the president of the
National Petrochemical and Refiners’ Association,‘The gasoline price in America
is probably the best known single price for any product or commodity because
it is in on almost every street corner.’28
It is also, therefore a highly‘political’ price
and although a higher gasoline tax would probably dampen its future volatility
for the reasons explained above, proposing such a tax increase is a guaranteed
vote-loser for most US politicians.
BUSH, ENERGY AND THE ENVIRONMENT
The USA is responsible for 44 per cent of all the energy-related carbon dioxide
emissions from the industrialised, OECD nations.29
Although Bush on the
campaign trail had seemed to offer a constructive and even-handed approach to
the thorny question of American compliance with the Kyoto protocols which
limited worldwide emissions of carbon dioxide and other greenhouse gases,
three months into his presidency, Bush swiftly abandoned his earlier position
and in a letter replying to a group of senators vociferously opposed to Kyoto, he
announced that ‘he would oppose Kyoto because it exempted 80 per cent of the
world, including China and India, and it was an unfair and ineffective means of
addressing global climate change concerns.’30
In the opinion of Paul O’Neil, then
Bush’s Treasury Secretary, Bush’s decision showed all the signs of manipulation
by Cheney, master of the political puppeteer’s craft.31
Bush’s rejection of Kyoto
won widespread approval from the large oil, gas and coal companies but it also
reflected the reality of motorised America as a whole.
The combustion of motor gasoline in an internal combustion engine
involves a reaction between the hydrocarbons in the fuel and oxygen, with
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vaporised water, carbon dioxide and heat energy being the products of
combustion. For example, in the case of Pentane, one of the ingredients in petrol,
about 3 kilograms of CO2 are released for every kilogram of pentane consumed.
One litre of pentane weighs about two thirds of a kilogram so an automobile
releases 2 kilograms of CO2 for every litre of motor fuel used. Now let us refer
back to Mrs AA and her new Ford Explorer, who we met earlier in this chapter.
The average fuel efficiency of her new vehicle is about 16.5 miles per US gallon
(or 4.36 miles per litre). So if she travels an average of 10,000 miles per year her
vehicle consumes 2,294 litres of fuel and releases over four and half tonnes of
carbon dioxide into the atmosphere. In other words, to significantly reduce
carbon dioxide emissions Bush would have had to clamp down not only on his
corporate energy industry backers but on the motorised lifestyle of millions of
ordinary Americans, a lifestyle which, as we have already noted, epitomises the
very values of individualism and ‘freedom’ so lauded by conservative America
and its political representatives.
However Bush did have one card to play in the environmental politics game.
‘Today I am proposing $1.2 billion in research funding so that America can lead
the world in developing clean, hydrogen-powered automobiles.’ With these
words, Bush’s January 2003 State of the Union Address sought to portray his
Administration as simultaneously pro-environment and ‘doing something’ about
increasing dependence on foreign oil. According to some of the Administration’s
supporters this new apparent commitment to a non-gasoline automobile
engine‘undermines the argument that Team Bush is the captive of oil interests’.32
In fact the so-called ‘FreedomCAR and Fuel Initiative’, which would hand over
$1.7 billion of US taxpayers’ money to corporate America over a five-year
period, did nothing of the sort. The prospect of a commercially viable fuel-cellpowered
automobile is certainly one of the more remote alternative technologies
currently under consideration. Currently hydrogen is four times as expensive to
produce as gasoline and fuel cells are ten times more expensive than internal
combustion engines. Even if research were to reduce these costs to equivalence
with the conventional auto engine the problem of the slow market penetration
rate (owing to the length of time owners retain their current vehicles) would
place significant oil savings and environmental improvements decades ahead.
This problem is compounded by the fact that Bush’s programme lacks any
mechanism to hold the automobile industry accountable for converting theoretical
plans into real vehicles, or any economic or social mechanism to ensure a
transition away from current gasoline-based technology.
‘The president’s announcement is encouraging,’ said Ed Murphy, general
manager of refining and marketing with the American Petroleum Institute,
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adding that, ‘fuel cells are an exciting new technology that could figure
prominently in America’s energy future.’ Energy future indeed. In the interim
any serious attempt to deal with America’s current problem of gas-guzzling,
such as a really significant tightening of mandatory car manufacturers’ average
fuel efficiency standards, could be conveniently shelved. Indeed, the US
environmental campaign group, the Natural Resources Defense Council,
compared the oil savings from what they describe as an ‘optimistic’ fuel-cell
engine scenario (100,000 fuel-cell vehicles per year by 2010 and 2.5 million by
2020) with their own fuel economy proposal (an average mandatory vehicle fuel
consumption of 40 mpg by 2012 and 55 mpg by 2020), showing that potential
oil savings between now and 2020 from their own programme are almost 25
times greater than those from the introduction of fuel-cell vehicles. Even in
2030, when fuel-cell vehicles would be more prevalent, savings from fuel-economy
improvements would still be five times as great.33
Far from indicating a new
‘greener’, less ‘oily’ Bush, the FreedomCAR and Fuel Initiative confirmed him as
resolute friend of the oil industry and a generous contributor to US corporate
welfare.
AMERICA’S MOTOR FUEL REQUIREMENTS 1999–2050
Let us return to Mr and Mrs Average America and multiply our data for this
‘sample’ household by all 104,700,000 US households to reach a figure for
America’s total motor fuel requirements. We know that the annual vehicle-miles
travelled for a three-person household like the AA’s is 24,800 miles. We will
assume that the average fuel economy for both the AA’s vehicles taken together
and combining both city and highway use, is around 20 mpg; so the total
volume of gasoline consumed by the AAs each year is 1,240 US gallons. On this
basis, the total motor-vehicle fuel consumption of all US households would be
129,828 million gallons. Since there are 42 gallons to a barrel, we can calculate
that US households consume 3,091 million barrels of transportation fuel per
year, or 8.5 million barrels per day.34
Of course, this calculation is based on the assumption that the average fuel
economy of all light vehicles on US roads today is the same as the combined
average fuel economy of the AA household’s two vehicles. It could be different:
on the one hand, the total stock of cars is older than the AA’s vehicles (which will
therefore lower the average mpg); on the other hand, the total stock of light
vehicles will also be considerably less ‘weighted’ by the presence of SUVs (which
will therefore raise the average mpg). In fact, these factors appear to cancel each
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other out. The actual fuel economy of the average US light vehicle is indeed, 20
mpg, so our calculation of 8.5 million barrels per day for total US light vehicle
fuel can stand. It is still an estimate, but one which compares quite well with the
US Bureau of Transportation Statistics own figure of 8.2 million barrels per day.
To this we must add the motor fuel consumed by America’s heavy trucks –
those used for commercial road transport. The USA has 7,858,000 registered
heavy trucks of which 2,154,000 are long-haul, so-called ‘combination’ trucks
capable of pulling heavy trailers. In addition there are around 750,000 buses of
different types. Heavy trucks and buses consume around 36,300 million gallons
per year (2.4 million barrels of fuel per day). Adding the fuel consumption of
heavy trucks and buses to the fuel consumed by light vehicles gives us a total
motor-fuel consumption of 10.6 million barrels per day. To put this figure into
perspective, it is roughly equivalent to the total daily petroleum consumption of
South America, Africa and the former Soviet Union combined.
Looking to the future, the US Department of Energy’s Energy Information
Agency (EIA) forecasts that America’s total oil requirements will continue to rise
to around 26.7 million b/d in 2020, compared to 19.5 million b/d in 1999, an
increase of 37 per cent. Demand for all transportation fuels will rise by over 40
per cent between 1999 and 2020.35
Indeed, by 2020, demand for fuel from the
transportation sector of the US economy alone (19.22 million b/d) will be about
the same as the total US demand for petroleum in 1999 and most of this increase
will be the due to higher demand from America’s cars and trucks.
Looking even further into the future, the Department of Energy’s Office of
Transportation Technologies (OTT) examined a number of different scenarios
for US transportation fuel demand until the year 2050. The‘base case’ presented
by the study is that total US petroleum demand increases from 19.5 million
barrels per day in 1999 to 44 million b/d in 2050 and transportation demand
increases to 30 million b/d, of which 21 million b/d is consumed by light and
heavy highway vehicles.36
This ‘base case’ assumes that light vehicle fuel economy
does not improve over the next fifty years, because the increase in the oil price
over this period would be modest. At the same time, the study notes that, by
2050, ‘oil is assumed to be virtually 100 per cent imported.’37
In alternative scenarios, where different kinds of technological improvement
(hybrid electric vehicles, fuel-cell-powered vehicles etc.) are factored in, there
remains the problem that such technologies take a very long time to diffuse
throughout the national vehicle stock. Due to relatively slow replacement rates,
the inertia in the current stock of vehicles results in a substantial delay between
the initial deployment in the market and realisation of the petroleum-saving
benefits. For example, if the advanced vehicles followed a ten-year market
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penetration curve starting at 10 per cent of the market in 2001 and reaching 100
per cent by 2010, the on-road fuel economy of the stock would not double until
about 2030. With a more realistic twenty-year penetration of the market, the
stock fuel economy takes 38 years to double.
The intention of the OTT study was to show how essentially unrealistic is the
‘base case’ once two further constraints are added to the argument – the growing
oil demand from the developing world and the possibility that conventional
world oil production will peak around 2020. While the second of these two
‘constraints’ is arguably too pessimistic (see Chapter Ten), the OTT’s concern
that America would become increasingly vulnerable to oil price shocks unless
measures are swiftly introduced to reduce highway consumption of petroleum
was convincing. Their policy conclusion was that the government should be
more prescriptive and interventionist in changing the public’s existing preference
for petroleum-fuelled motorisation. The OTT concluded that, to ensure an orderly
transition from conventional fuels and stagnant fuel economy to new fuels and
a more efficient fleet, there was a strong need for new policies ‘at least some of
which are likely to meet resistance from the general public and/or the auto
industry’.38
To date neither the auto industry nor the general public have anything
to fear on this score.
FREEDOM’S JUGGERNAUT
At the end of Chapter One, we referred to the American motor vehicle as a
‘juggernaut’ – the ancient Hindu religious idol carried in procession by a huge
wheeled vehicle under which the devotees of Krishna were supposed to throw
themselves in adoring ecstasy. The religious metaphor may seem exaggerated,
but it is nevertheless important to recognise the key ideological function which
the automobile plays in the American value system. According to the Michigan
University study of the US automotive industry to which we have already
referred: ‘Automobility facilitates individual determination, individual freedom
of movement, self-directedness, privacy, choice of destination arrival time, and
control over immediate environment. To many, automobility is the core of
individualism in America.’39
Indeed, in the words of the conservative policy
analyst John Bragg:‘The car is the greatest modern symbol of American freedom…
cars are a powerful symbol of what makes America the greatest, and the freest,
country in the World.’40
Sentiments such as these formed part of the ideological bedrock of that
small group of men and women who took control of the USA on 12 December
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2000.41
This new right-wing Republican Administration – an alliance between
the corporate oil and energy interest represented by the ‘Axis of Oil’ and a group
of extreme Reaganite ideologues dubbed ‘neo-conservatives’ by the media –
would not fail to take whatever action was deemed necessary to safeguard
America’s completely motorised way of life. But as the new millennium dawned,
and America’s dependence on oil imports from the Gulf reached a new all-time
high, there were grave warnings of an impending energy crisis of unprecedented
severity; and although there were different views as to the precise nature of that
crisis – as we shall see in the next chapter – there was general agreement among
the different expert bodies of opinion that such a crisis was fast approaching.
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