What Should President Obama Do? "Kill the Oil Monopoly" Says Gal Luft

Thursday, January 3, 2013

Foreign Policy Magazine put it to ten experts: What should President Obama try to accomplish with his second term? Gal Luft of the Institute for the Analysis of Global Security, was one of the experts. His suggestion: Kill the oil monopoly. Here's an excerpt from the article:

Most cars sold in the United States — roughly 14 million annually — are allowed under their warranties to run on nothing but oil: gasoline and, in some cases, diesel. Due to this virtual monopoly, oil has taken on inordinate strategic importance, and oil prices have a significant economic impact. Oil-price spikes have the power to reduce consumer confidence, trigger recessions, and inflate the country's trade deficit. Were drivers able to respond to high oil prices by switching from gasoline to less costly fuels, oil's importance would be greatly diminished. But they can't...

Obama, who pointed out during his campaign that America is "the Saudi Arabia of natural gas," can break oil's stranglehold over America's transportation sector by sending Congress a simple, no-subsidy, open-fuel-standard bill that would ensure that new vehicles sold in the United States are open to some sort of fuel competition. The law would allow automakers to choose whether they want to go the least costly route — liquid-fuel choice — or some other pathway. The new vehicles would then create the demand that would spur increases in the production capacity of competing fuels...

Best of all, from the perspective of the president's political advisors, support for such a move would be genuinely bipartisan. Co-sponsors for an open-fuel-standard bill in 2011 ran the gamut from liberals like California's Rep. Brad Sherman to Tea Party favorites like Iowa's Rep. Steve King. With backing from the increasingly powerful alternative-fuels lobby, as well as national security hawks like former CIA Director James Woolsey and former Homeland Security Secretary Tom Ridge, this could be one energy proposal that Republicans who would never touch a carbon tax or cap and trade would be willing to sign on to.

Read the whole article here: Kill the Oil Monopoly.
More by Gal Luft: Will Gas Prices Ever Return to Normal?


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