THINKERS UNDERGROUND

War Footing: 10 Steps America Must Take to Prevail in the War for the Free World by Frank Gaffney and colleagues, foreword by James Woolsey, published Nov. 24 by Naval Institute Press.

Let us be clear: We will always need oil. What we must do is reduce the strategic importance of oil to the global economy. We must shift oil from being a strategic commodity-one whose disruption can hold our economy hostage-to a commodity that is interchangeable with other energy resources.

Because two-thirds of the oil we use is consumed in the transportation sector (mostly in cars and trucks), long term security and economic prosperity require diversifying our energy sources in that sector. This can be done via a technological shift to an economy based on nonpetroleum, next generation fuels and vehicles designed to use them.

It is worth noting that diversification away from imported oil to domestic energy sources has already been accomplished in another sector of the economy-the generation of electricity. In the 1970s, nearly a third of U.S. electricity was produced by burning oil. Today, this figure is down to just 2 percent.

A number of public policy institutes, trade unions, and other organizations have joined forces under the banner of the Set America Free Coalition to advance a blueprint for effecting a similar change in the U.S. transportation sector. (The Coalition's blueprint can be viewed in full at Appendix III.) This plan offers ways in which the nation's oil imports can be cut in half within two decades through the widespread use in our cars and other vehicles of a variety of currently available technologies.

A Program for Energy Security

The main ingredients of the Set America Free blueprint are as follows.

1. Fuel Choice

One of the highest virtues of the American way of life is freedom of choice. Think of any consumer good-from a cup of coffee to a carpet-and consider the range of choices we have. But when it comes to transportation fuel, Americans have essentially no choice. Driving into a gas station, oil based products like gasoline and diesel are the only substances with which we can fill our tanks.

The fact that a single liquid fuels virtually our entire society is a formula for disaster. If for whatever reason petroleum supplies are disrupted, we currently do not have a fallback option.

The first step to enabling fuel choice is to ensure that all new cars are flexible fuel vehicles (FFVs). FFVs look and perform just like "regular" vehicles, with one difference: instead of running solely on gasoline, they are designed to burn alcohol based fuels (ethanol and methanol), gasoline, or any mixture of the two.

This is not a new technology. Henry Ford's 1908 Model T was an FFV. And some 4 million FFVs have been manufactured in the United States since 1996, including such popular models as Ford Taurus, Chevy Silverado, and Dodge Caravan. Because FFVs can also run on gasoline, drivers can refuel even in places where pumps have not yet been modified to dispense alcohol based fuels.

The only difference between a gasoline only car and an FFV is that the FFV engine is equipped with a modified control chip and some different fittings in the fuel line to accommodate the characteristics of alcohol. The marginal additional cost associated with the production of a flexible fuel vehicle is currently under $150-less than the cost of a typical CD player.

That cost would be reduced further as the volume of production of such cars increases. That would be particularly true if flexible fuel designs were to become the industry standard-as they should, effective immediately.

Ethanol. Also known as grain alcohol, ethanol is a liquid that can be produced domestically from fermented agricultural products, including (but not exclusively) from corn. The U.S. industry currently has a capacity of 3.4 billion gallons a year and has increased production by an average of 25 percent per year over the past three years.

The main barrier preventing ethanol from becoming a massively used transportation fuel in the United States is its cost and the limited supply of corn. Ethanol benefits from federal subsidies amounting to 51 cents per gallon.

Fortunately, there are feedstocks other than corn that can be converted to ethanol without the need for such massive government assistance. For example, a great deal of effort is being expended to develop processes for the economic conversion of cellulosic biomass into ethanol. Such processes will allow production of fuel from switch grass and other dedicated energy crops.

Until such technology becomes economical, however, there is another source of ethanol that makes economic sense and that does not require a government subsidy: sugar cane. In Brazil, at least 25 percent of the fuel sold in gas stations is sugar based ethanol. In addition to Brazil, Latin American and Caribbean countries like Guatemala, Panama, Trinidad and Tobago, Costa Rica, El Salvador, and Jamaica are all low cost sugar cane producers. These nations could become key to U.S. energy security if large numbers of American vehicles were FFVs-and if imported ethanol could be freed from the current, heavy U.S. tariffs on sugar.

Expanding U.S. fuel choice to include biofuels imported from our neighbors in the Western Hemisphere would not only help increase our energy independence from Islamofascist Middle Eastern suppliers. It would also have clear geopolitical benefits. By encouraging these countries to increase their output and become major fuel suppliers, we could greatly enhance the U.S. posture in the Western Hemisphere. As we shall see in Step 9, such a change is increasingly urgent in light of the oil bankrolled subversion practiced by Venezuela's Chavez and his mentor, Cuban dictator Fidel Castro, as well as China's growing activity in the region.

To put it bluntly, we cannot hope to enjoy energy security through renewable fuels unless we are also willing to open the U.S. ethanol market to imports. It defies common sense to tax ethanol coming in from our neighbors when we do not tax oil imported from Saudi Arabia.

Methanol. Another alcohol that can be used in flexible fuel vehicles is well known to Indianapolis 500 fans: wood alcohol, or methanol. Today, this liquid fuel is produced mostly from natural gas. Greatly expanded domestic production can be achieved, however, by producing methanol from coal, a resource the United States has in abundance. The commercial feasibility of coal to methanol technology has been demonstrated as part of the Department of Energy's "clean coal" technology effort. Currently, methanol is being cleanly produced from coal on a commercial scale for around 50 cents a gallon. Methanol can also be produced from agricultural waste.

2. Electrify Transportation

As the price of gasoline has mounted, there has been growing consumer demand for so called hybrid vehicles. Hybrids combine a traditional internal combustion engine with an electric motor to improve gas mileage. The motor is powered by a battery, continuously recharged by capturing braking energy that would otherwise be wasted.

Hybrids get anywhere from 20 percent to more than twice the mileage of conventional gasoline engines, without compromising performance. However, their only external fuel source is gasoline. Increasing fuel choice calls for taking hybrids one step further.

Plug in hybrids. For many years, electricity has been the source of power for all our home appliances. Why not use electricity to power our cars as well? Because less than 2 percent of U.S. electricity is generated from oil, using electricity as a transportation fuel would greatly reduce our dependence on imported petroleum. Vehicles that meet consumer needs could tap America's electrical grid to supply energy for transportation, allowing more efficient use of such domestic sources of electricity as coal, solar, wind, geothermal, hydroelectric, and nuclear power.

During the 1980s, some auto companies put battery operated electric vehicles on the road. While these cars were generally clean, quiet, and highly efficient, they failed to achieve large scale penetration of the market. Among the stumbling blocks were the limited range (driving distance) and the reduced performance of electric only vehicles.

Plug in hybrid electric vehicles (PHEVs) offer the benefits of electric vehicles without the range and performance penalties. PHEVs are souped up hybrids that can optionally be plugged in. Like first generation hybrids, plug ins have a liquid fuel tank and internal combustion engine, so they have the same driving range as a standard car. Although they look and perform much like regular hybrid cars, they can in addition be plugged into a 120 volt outlet at home (or in a parking garage) and recharged.

Plug ins can run on their batteries' stored energy for much of a typical day's driving. Depending on the size of the battery, that might be up to 60 miles per charge-far beyond the daily commute of an average American. And, when the charge is used up, the PHEV automatically switches over to run on the engine powered by its fuel tank. Someone who drives a distance shorter every day than the car's electric range could do so exclusively by recharging the battery and never having to dip into the fuel tank.

PHEVs can reach fuel economy levels of a hundred miles per gallon of gasoline consumed. Because 50 percent of cars on the road in the United States are driven twenty miles a day or less, a plug in with a twenty-mile-range battery would reduce gasoline consumption by, on average, 85 percent.

Five hundred miles per gallon of gasoline performance. If, moreover, a plug-in vehicle were designed as an FFV, fueled with 80 percent alcohol and 20 percent gasoline, fuel economy could reach five hundred miles per gallon of gasoline. Notice we say "per gallon of gasoline" and not "per gallon." The object of expanding fuel choice is not to reduce the energy consumption of a vehicle. Rather, it is to shift the balance in the transportation sector away from oil to more secure energy resources, by stretching each gallon of gasoline further by substituting alcohol fuels and electricity.

Ideally, plug in hybrid vehicles would be charged in home or apartment garages at night, when electric utilities have significant excess capacity. The Electric Power Research Institute estimates that up to 30 percent of the U.S. vehicle market could shift to PHEVs with a twenty mile electric range, without any additional electricity generating capacity.

At present, the estimated retail price of a plug in hybrid would be higher than that of corresponding conventional vehicles, because of the cost of extra batteries to extend the range in electric mode. The exact difference in price depends on the size of the battery, but, roughly speaking, every additional 10 miles of vehicle range adds about $1,000 to the cost.

This price difference is partly offset, however, by the lower operating costs of plug ins. At current gas prices, it costs well over 10 cents per mile to refuel a conventional car with gasoline, whereas refueling a plug in with electricity is only 3 cents per mile. That means that the lifetime overall cost of mass produced plug in hybrid vehicles would be equivalent to that of gasoline only vehicles.

In light of the national and energy security benefits of achieving such a dramatic reduction in demand for gasoline, the president and other officials should be doing everything possible to encourage the widest and fastest possible penetration of plug in hybrid vehicles into the market. One way of doing that would be for the difference in the up front price of PHEVs to be covered by federal and state tax credits and by rebates designed to reward consumers for reducing consumption of petroleum based fuels and emissions. This strategy is proving very effective in getting hybrid electric vehicles past the early adopter hump and into the mainstream.

3. Stretch a Gallon Still Further

The Bush administration describes conservation as one of the important elements of a sound energy policy. It notes that in the past three decades, the American economy has grown nearly five times faster than energy use-proof positive that conservation can go hand in hand with increases in productivity.

Indeed, the last time the United States made a concerted effort to improve energy efficiency-between 1979 and 1985, in response to OPEC's oil embargo-its oil consumption decreased by 15 percent. Conservation does not necessarily entail compromising our lifestyles, or settling for smaller, slower, or less comfortable cars. And, given the benefits for our energy security, encouraging conservation must be a central ingredient in our War Footing strategy.

Individual initiatives. The most immediate measures to improve the efficiency of America's automobile fleet are in the hands of individual motorists:

" properly inflating tires " tuning the engine " maintaining air filters " removing excess weight from the trunk " driving at a steady pace " consolidating trips " choosing to take the "broadband highway" to work, using the Internet to telecommute from a home office.

Better materials. At least two-thirds of fuel use by a typical consumer vehicle is caused by its weight. Reducing the weight and drag of a vehicle need not require reducing its size or safety, but it can greatly increase gas mileage. Today, we can achieve this objective thanks to advances in both metals and plastics. Cars made from advanced composites and next generation steels can be affordably manufactured with current technologies. They can roughly halve fuel consumption without compromising size, safety, performance, or cost-effectiveness.

In fact, crash tests and race car experience have shown that these vehicles are actually safer. As a report commissioned by the Pentagon notes, "Ultra strong carbon fiber composite auto bodies can save oil and lives at the same time, and by greatly simplifying manufacturing, can give automakers a decisive competitive advantage."21

Modern diesels. Significant progress toward better efficiency can also be reached in the realm of diesel engines. Modern diesel vehicles are becoming increasingly popular in Europe, which is one major reason why average fleet mileage there is so much higher than in the United States. Hybrid diesel engines can combine the benefits of both technologies to reach even higher efficiency gains.

Diesel fuels currently account for almost 20 percent of U.S. oil consumption. New technologies are available to use nonfossil sources for its production. For example, diesel fuel can be made from waste, such as garbage, tires, and animal by-products. In fact, it is currently being commercially produced from turkey carcasses and other offal.

An innovative biodiesel fuel can be commercially produced from soybeans and other vegetable oils. Such fuels are compatible with the current distribution infrastructure, and blends of up to 20 percent can be used in existing vehicles.

Needed: A New National Initiative

There is no shortage of other longer-term technological solutions to our energy problem. Although many of them hold great promise, it is not clear that they will be available by the time we need them.

After all, the average lifetime of a vehicle in the United States is more than sixteen years. Thus, the technological transformation of the transportation sector will take roughly fifteen to twenty years, as new vehicles replace old ones.

That is why it is imperative to begin the process without delay. Every day we wait is one more day that America will struggle under the yoke of a dangerous and ruinously expensive oil dependence, with all its national security implications.

We have no time to wait for commercialization of promising but immature technologies, such as hydrogen fuel cells, which still face significant technological barriers. Nor do we have time to wait for expensive and time consuming infrastructure change. The focus should be on using alternative approaches-like fuel choice and plug in hybrids-that can be implemented relatively quickly and that permit the maximum possible use of existing refueling facilities and automotive assembly lines.

In 1942, President Roosevelt mobilized the nation's scientific and financial resources to launch the Manhattan Project-a top priority effort to build an atomic weapon in response to threats to America's survival. The outcome was an end to the war with Japan, followed by the development of a wide new array of nuclear based technologies in energy, medical treatment, and other fields.

In 1962, President Kennedy launched the Apollo Man to the Moon Project, driven in part by mounting threats to U.S. and international security posed by Soviet space dominance. The outcome was an extraordinary strategic and technological success for the United States. It engendered a wide array of spin offs that improved virtually every aspect of modern life.

In 1983, President Reagan responded to the danger of Soviet ballistic missiles by unveiling the Strategic Defense Initiative (SDI), a major program to develop the means to destroy such missiles in flight. We now know that SDI played an important part in the success of Mr. Reagan's strategy for destroying the Soviet Union. It compounded the Kremlin's already acute economic problems and contributed to the breakup of the USSR, creating unprecedented potential for a more peaceful and prosperous world.

In all three of these historic cases, a U.S. president called upon America's ingenuity and the power of technology to address a global threat. In each case, that threat came from an enemy determined to change the existing world order and to extinguish the Western values and way of life we cherish. Today, the security of the United States and, indeed, that of the world, is no less threatened. This time, the threat comes from another totalitarian ideology, Islamofascism, fueled by petrodollars. Fortunately, we do not need an expensive new Manhattan Project to conduct groundbreaking research into new and exotic technologies and fuels that will, over many years, enhance energy efficiency and cut our dependence on foreign oil from the Islamists and their friends.

The truth is that the technologies that will allow us to make the leap into the post oil era are already with us. All that is needed now is leadership and the support of the American people for a national commitment to energy security. Putting the nation on a War Footing is the opportunity to bring these assets to bear and to begin weaning our country from its oil dependency and the associated vulnerabilities.

Today, the United States imports 11 million barrels per day (mbd), and it is projected to import almost 20 mbd by 2025. According to the Set America Free blueprint, if all cars on the road by 2025 are hybrids and half are plug in hybrid vehicles, U.S. oil imports would drop by 8 mbd. If all of these cars were also flexible fuel vehicles, U.S. oil imports would drop by as much as 12 mbd.

Such a leap toward energy security is a big idea-but the American people have never shied away from big ideas. During World War II, Winston Churchill observed that "Americans' national psychology is such that the bigger the idea, the more wholeheartedly and obstinately do they throw themselves into making it a success. It is an admirable characteristic, provided the idea is good."22

Breaking the hold of Middle East autocracies over the global economy is a good idea whose time has come. For more than two centuries, the United States has been the harbinger of freedom and democracy in the world, to the benefit of millions of people. Now it is time for America to lead the Free World in an effort to liberate us all from our current dependence on those that would do us harm.