The Audacity of Hope - Barack Obama [80]
Countries like Brazil have already done this. Over the last thirty years, Brazil has used a mix of regulation and direct government investment to develop a highly efficient biofuel industry; 70 percent of its new vehicles now run on sugar-based ethanol instead of gasoline. Without the same governmental attention, the U.S. ethanol industry is just now catching up. Free-market proponents argue that the heavy-handed approach of the Brazilian government has no place in the more market-oriented U.S. economy. But regulation, if applied with flexibility and sensitivity to market forces, can actually spur private sector innovation and investment in the energy sector.
Take the issue of fuel-efficiency standards. Had we steadily raised those standards over the past two decades, when gas was cheap, U.S. automakers might have invested in new, fuel-efficient models instead of gas-guzzling SUVs—making them more competitive as gas prices rose. Instead, we’re seeing Japanese competitors run circles around Detroit. Toyota plans to sell one hundred thousand of their popular Priuses in 2006, while GM’s hybrid won’t even hit the market until 2007. And we can expect companies like Toyota to outcompete U.S automakers in the burgeoning Chinese market since China already has higher fuel-efficiency standards than we do.
The bottom line is that fuel-efficient cars and alternative fuels like E85, a fuel formulated with 85 percent ethanol, represent the future of the auto industry. It is a future American car companies can attain if we start making some tough choices now. For years U.S. automakers and the UAW have resisted higher fuel-efficiency standards because retooling costs money, and Detroit is already struggling under huge retiree health-care costs and stiff competition. So during my first year in the Senate I proposed legislation I called “Health Care for Hybrids.” The bill makes a deal with U.S. automakers: In exchange for federal financial assistance in meeting the health-care costs of retired autoworkers, the Big Three would reinvest these savings into developing more fuel-efficient vehicles.
Aggressively investing in alternative fuel sources can also lead to the creation of thousands of new jobs. Ten or twenty years down the road, that old Maytag plant in Galesburg could reopen its doors as a cellulosic ethanol refinery. Down the street, scientists might be busy in a research lab working on a new hydrogen cell. And across the way, a new auto company could be busy churning out hybrid cars. The new jobs created could be filled by American workers trained with new skills and a world-class education, from elementary school to college.
But we can’t afford to hesitate much longer. I got a glimpse of what a nation’s dependence on foreign energy can do in the summer of 2005, when Senator Dick Lugar and I visited Ukraine and met with the country’s newly elected president, Viktor Yushchenko. The story of Yushchenko’s election had made headlines around the world: Running against a ruling party that for years had catered to the wishes of neighboring Russia, Yushchenko survived an assassination attempt, a stolen election, and threats from Moscow, before the Ukrainian people finally rose up in an “Orange Revolution”—a series of peaceful mass demonstrations that ultimately led to Yushchenko’s installation as president.
It should have been a heady time in the former Soviet state, and indeed, everywhere we went there was talk of democratic liberalization and economic reform. But in our conversations with Yushchenko and his cabinet, we soon discovered that Ukraine had a major problem—it continued to be entirely dependent on Russia for all its oil and natural gas. Already, Russia had indicated that it would end Ukraine’s ability to purchase this energy at below-world-market prices, a move that would lead to a tripling of home heating oil prices during the winter months leading up to parliamentary