The Record: Breaking An American Addiction To Oil

There is a lot of talk in this campaign about breaking America's addiction to oil. This is one of those areas of the campaign where Obama and McCain are not too awfully far apart in terms of having a verbalized goal, it would seem. This goal enters their speach when they say phrases like "break our dependance" or "break our addiction." The techniques they want to employ to achieve those goals, however, are quite different.

Introduction: I have heard a number of Obama supporters say that they would be fine paying higher gas / oil prices if it meant breaking an American addiction to oil. If that is your goal, then you are actually more in line with the goals and plans of John McCain when you look at the details, which we will do by reviewing an article by the Council on Foreign Relations: http://www.cfr.org/publication/14755/

Let's a take a look through these independently researched facts:

Obama-

The core of his plan to deal with our addiction has everything to do with the windfall profits tax he would like to apply to oil companies. This is how this would work. A windfall profit tax would be applied to those companies and as a result the proceeds would be turned into “tax rebates” ($1000/yr for couples and $500/yr for singles.) The idea here is that if oil companies are making windfall profits (this is vague, as in not yet defined as to what a windfall profit is exactly) then the tax would help offset the cost at the pump. Assuming windfall profits go away, so would the tax rebates (this part is a little more unclear.)

My analysis: tax rebates fall into the category of entitlements. This means that once the rebates are voted on, then the money has to come from somewhere to pay for them. In a sense, we would need windfall profits to pay for these rebates. In that sense, if the rebates pass congress then Congress is counting on the windfall “fundraiser” to follow successfully. Folks like McCain are saying that this plan actually creates a federal addiction to oil through planning on and needing the tax proceeds of big oil companies. Imagine how unfulfilling this plan might feel if we were talking about a drug addiction. Taxing a drug dealer to reduce the cost of the drugs we are addicted to. I am not sure how this solves the problem.

Next Obama in august of 2008 Obama said he “supports the sale of 70 million barrels of oil from the Strategic Petroleum Reserve "for less expensive crude, which in the past has lowered gas prices within two weeks." This statement signaled a shift of position for Obama, who in July 2008 said he did not believe the United States should use that reserve supply.

My analysis: It keeps us in oil, and aims to provide cheaper oil.

Obama said he would close loopholes that jack up oil prices.

My analysis: Still talking about making oil cheaper.

Next Obama said we need to use less oil as a country.

My Analysis: Honestly, this sounds like Gov. Palin but more importantly every candidate is saying this and I think it is a good goal. However, it will take some advances in technology to make this more possible. I am glad he says this is what he wants, but hopefully we as a country will move toward this technologically.

In 2007 one month after Obama announced his run for the Presidency, Obama co-authored the Fuel Economy Reform Act, which proposed that automobiles become more fuel efficient.

My analysis: This is yet again less to do with getting ride of oil dependance and more about cheeper. This “bill” never saw the light of day. It wasn't that it was shot down. It was that it was never introduced to be voted on.

Obama said in January 2008 that he would support nuclear if it was safe and the waste was well taken care of.

My analysis: Finally we are done talking about more and cheaper oil. Again, many candidates agree, but the additional speculation here is the apparently uneducated fear around nuclear waste disposal is a slightly more outdated perspective. Obama has caught some flack for simply not understanding issues surrounding advances in nuclear technology.

McCain-

McCain says he supports an "all of the above" approach to energy security, meaning he will "support the development of alcohol-based fuels, establish a permanent research and development tax credit to support energy innovation, and will encourage an even-handed system of tax credits for renewable energy sources like wind, solar, and biomass."

My analysis: This is a long term approach since what he is saying is that we need to focus on seeing technology develop to the degree that we can actually do away with dependence. Recall above that Obama said we need to use less oil. This is how that would happen.

He said he would lift federal restrictions on domestic oil exploration in the United States. At the same time he has stressed the importance of protecting refuges like the Arctic National Wildlife Reserve. This is what McCain calls the “Lexington project.”

My analysis: Like Obama, this is less about avoiding an oil addiction and more about just making oil cheeper. Speculation here says that oil prospecting takes time and that this would again possibly take a while to see the benefit.

McCain has been a proponent of nuclear power. The Lexington Project includes aggressive goals about running more of the country on nuclear power. That plan has always included safe storage of nuclear waste and included a desire to position America as championing safe storage as a world leader in cooperation with other countries.

My analysis: McCain has given Obama a bit of a hard time about not having a more reasonable understanding of nuclear power as an alternative energy source. Rightly so. Obama entered the conversation quite late for whatever reason. McCain also speaks to the need for America to champion the storage and management of nuclear waste. Obama doesn't speak about nuclear energy on this level.

At about the same time McCain and Leibermann proposed the Climate Stewardship Act and they said it “harness the power of the free market and the engine of American innovation to reduce the nation's greenhouse gas emissions substantially enough and quickly enough to forestall catastrophic global warming." Later versions of the McCain-Lieberman legislation included billions of dollars in subsidies for nuclear energy companies. In one felled swoop McCain attempted to reduce oil dependence and work toward protecting the environment. The bill didn't pass.

My analysis: McCain receives a lot of flack for supposedly not backing alternative energy efforts. In this Act he was backing subsidizes support for nuclear American investment and environmental protection. While there have been some bills and acts about alternative fuel that he took objection with, generally the accusation is false.

Again, McCain does not support the windfall profits tax for the above reasons.

My analysis: See my Obama criticism on this talking point.

Finally, McCain promoted the idea of a “clean car challenge” as well as a $300 million challenge to get companies to pursue building an automobile energy storage solution that can out-power modern hybrids.

My analysis: I like these two initiatives because they are proven to work. An example would be the modern “space race” in the form of the private industry “X-Prize” paid out to a company named scaled composites for building a more efficient private sector equivalent to the NASA Space shuttle. It was an amazing success. In the case of being both clean and breaking a dependence on oil, this recommendation again pulls that goal off.

Conclusion:

Obama- grade of C

Obama appears to support energy alternatives, but the large majority of his plans simply make oil cheaper or more abundant rather than provide significant goals toward alternatives. On the upside, Obama has made a number of changes to these plans and might change them again sometime in the next few weeks before the election. Personally, again... my blog, Obama's talk about “change” could be interpreted as him “changing” his mind on stuff, which often makes nailing his goals down a little difficult (example: definition of a “windfall” and how that tax actually breaks our dependence on oil.) Again, in the short term he seems to have a goal of lower gas prices, but the goal of eliminating an American dependence on oil seems to have gone missing almost entirely.

McCain- grade of B

He appears to have supported energy alternatives in form of voting and co-authoring bills, historically, as well as making plans to promote an effort and investment toward the goal of breaking a dependence on oil. Note that this runs contrary to the Obama accusation directed at McCain. On the downside, there doesn't seem to be as many short term goals of lowering the cost of oil which seems to be a priority of Obama.

Intro Review: Again, I have heard a number of Obama supporters say that they would be fine paying higher gas / oil prices if it meant breaking an American Addiction to oil. If that is your goal, then you are actually more in line with the goals and plans of John McCain when you look at the details.

Update: If I wanted to be more specific about giving them a score, I could award a point for plans that include breaking dependence and a negative point for plans than do not help this goal. I considered this, but in the end McCain would end up with a number that was very positively correlated toward this goal and Obama would have ended up with a negatively correlated score. Do the math for yourself. Even if I had simply awarded a point for items that helped achieve the goal, ignoring those that do not help, McCain would still get a much higher score than Obama.