Tom Mast

is author of "Over a Barrel:

A Simple Guide

to the Oil Shortage"

The supplies to feed America's voracious appetite for oil continue to tighten, and we have not yet done anything effective to reduce our dependence on this commodity that is so vital to our economy.

What is the U.S. position in the world oil scene? Even though the United States has only 2.4 percent of the world's oil reserves, it uses about 25 percent of all oil consumed. The United States uses about 21 million barrels per day of oil. Of this, it imports 12.5 million, or more than 60 percent. The country began importing oil in the 1940s, and the imported percentage of its consumption has increased steadily ever since. The per-capita use of oil in the United States is 2.9 gallons per day, while it is 1.3 in other industrialized nations and 0.5 in the world as a whole. The United States no longer has much oil, but it continues to use it extravagantly.

About two-thirds of U.S. oil usage is for transportation, primarily for automobiles. Oil is so convenient and economical that it fuels 97 percent of our transportation. Gasoline constitutes 45 percent of our daily oil usage.

We do not have the luxury of moving from automobiles to mass transportation. The infrastructure of homes, schools and workplaces in most of this country was built around personal transportation - primarily automobiles. While we can afford to revamp automobiles and fueling stations as needed, we cannot afford to move the entire population together enough for mass transit to work for everyone. We have to solve the problem of powering vehicles with something other than fuels from oil.

What actions can the United States take to be certain that it really does reduce oil consumption and hence oil imports?

These actions must do two things: stimulate conservation - using less oil to accomplish the same transportation task - and stimulate development of alternatives to oil. Conservation alone can provide large savings in oil consumption. Europe has heavily taxed fuels for decades, with the result that cars there get much better fuel mileage than those in the United States. If our cars were as efficient as those in Europe, we still would have adequate transportation, but we would have reduced oil imports by more than what we now buy from the Middle East.

We already understand some technologies that can be extremely helpful, but we have been too timid in rolling them out. For example, the "Set America Free" blueprint states that the country could reduce oil consumption dramatically if all cars in use in 2025 were hybrids and half were plug-in hybrids. To the extent that an automobile runs on electricity, the energy can be generated by virtually any source - including nuclear, which produces no global-warming gases. Instead, we have wasted several precious years and spent considerable money with our experiment on corn-based ethanol, a process that raises the price of corn dramatically and does not have the potential to make a big impact on oil consumption.

A very straightforward approach to stimulate both conservation and alternatives is having considerably higher fuel prices. Harnessing the ingenuity of private industry with the profit motive would overnight bring thousands of companies into the challenge of developing alternatives to oil. No longer would we be relying on Congress to choose the best technologies for our future.

The higher fuel prices could be caused by oil or fuel taxes, rising perhaps $.20 per gallon each year for five to 10 years, with the government returning the money by reducing other taxes. This steady increase would minimize any negative impact on the economy while sending a clear message of coming higher fuel prices to encourage conservation and the development of alternative fuels. Other approaches (stiffer mileage requirements or other investment incentives) are more complicated, slower acting, and could produce unanticipated side effects.

We need to accelerate the long process of developing energy technologies and building new industries. To ensure its economic health, the United States should take steps now to halt the growth in its consumption of oil and then begin a steady annual reduction of such consumption. Given that the country sent a man to the moon in 10 years and completely converted its industry to a wartime footing in the six months after Pearl Harbor, it certainly has the capability to solve its growing oil problem.

The United States should set a goal of cutting its growth rate in oil consumption to zero by January 2010. By January 2012, it should be lowering its consumption annually by half a million barrels per day, or about 2 percent.

E-mail Tom Mast at tommast@overabarrelbook.com.