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World: Experts Envision A Future Beyond Oil

Record-high oil prices this year drained the growth potential of many major world economies. But how to end the global reliance on oil? Experts gathered on 21 October in New York to discuss ways to move beyond government dictates to find technological and business-driven solutions to oil dependence.

New York, 24 October 2005 (RFE/RL) -- The United States produces only 3 percent of the world's oil supply. But it consumes nearly one-quarter of it.

This makes the U.S. economy highly vulnerable to fluctuations in oil prices. This year's soaring rates have had a strong impact on consumer confidence and retail sales in America.

This has renewed U.S. interest in looking for alternative energy sources -- and experts say once the United States finds a long-term solution to oil dependence, the rest of the world will follow.

Amory Lovins, chief executive officer of the Rocky Mountain Institute, a nonprofit business-advisory group, was among the participants at the energy forum held at Manhattan's New York University. He said that thanks to new technologies, the United States now gets twice as much energy out of each barrel of oil as it did in 1975.

With oil prices hovering at $60 a barrel and natural-gas prices rising apace, Lovins says it is crucial that energy use becomes even more efficient. "We could replace half the oil with double efficiency of use costing on average of $12 a barrel," he said. "We could replace the other half with advanced biofuels, mainly cellulosic ethanol, and we'd save natural gas. That would have an average cost of 18 dollars a barrel. So, we’d invest $180 billion once, and have to retool car, truck, and plane industries, have to build an advanced biofuel industry."

Lovins said technological changes -- such as new vehicle designs -- could create over a million new jobs. The new vehicles would be designed to be safe, light, and fuel-efficient. One mid-size experimental car model has been shown to get 66 miles for every gallon of gas (28 kilometers per liter) -- nearly twice as much as some of the most fuel-efficient cars currently on the road.

"And the thing that is really crucial to understand about that is there is a huge amount of economic growth packed into the world of ravenous energy users on their way, starting with China, including India, including a vast part of the world." -- Jeffrey Sachs

Roger Altman, former U.S. deputy treasury secretary, said the United States should integrate its foreign policy with its energy policy, in order to help protect the U.S. economy against future oil-price shocks. Washington's main focus, he said, should be forging energy partnerships with countries that are less politically volatile than the oil-rich nations of the Middle East.

"There are regions -- like Mexico, right on our border; the Caspian region; to some extent, even Canada -- where a greater overall effort by the United States to help those regions exploit the oil reserves they have could result ultimately in about a 20 percent increase in the world oil supplies, and thereby reduce the pressure on world oil prices, and reduce our [U.S.] vulnerability to a supply shock," Altman said

Some panelists said that evidence is increasingly suggesting that carbon-dioxide emissions -- a direct result of oil-based economies -- are a major factor behind global warming and the growing incidence of severe weather, such as hurricanes Katrina and Rita that recently devastated the U.S. Gulf Coast.

Jeffrey Sachs is a world-renowned economist and the director of the Earth Institute at Columbia University in New York City. The institute focuses on global poverty issues and sustainable development. He noted that energy consumption is rising rapidly around the world.

"This is fundamentally a global issue because we have a global market for energy," Sachs said. "And the thing that is really crucial to understand about that is there is a huge amount of economic growth packed into the world of ravenous energy users on their way, starting with China, including India, including a vast part of the world. We can expect three- to sixfold increase of global GNP [gross national product] between now and 2050."

Sachs said that to be able to satisfy this constantly growing energy hunger, the world’s major energy consumers must put a priority on finding alternatives to oil and gas, overcoming dependence on narrow regions of oil supply, and work to resolve environmental challenges.

Global cooperation on such issues is also key. James Woolsey, a former director of the U.S. Central Intelligence Agency (CIA), said even countries who differ politically have areas of common interest when it comes to energy issues. He said there is a need to create a global coalition of leaders who want to change the world's oil-dependency equation.

"It ought to include not only people who are interested in the environment and people who are interested in the national security dimension, but also people who are interested in development in developing countries," Woolsey said. "It would be a wonderful thing for a Bangladeshi village to be able to produce its own transportation fuel. And I think the importance is that, if you’re trying to move away from oil, who cares what your reason is?"

The transition beyond oil, the panelists said, is already starting to transform oil companies like Shell and BP into energy companies. Energy efficiency has been named as a major priority in China’s new five-year economic plan. And biofuels are already taking advantage of existing retail and distribution structures, and are likely to attract billions in new investment.