For more than thirty years politicians and pundits have spoken of America’s need to develop the next generation economy free of dependence on foreign oil. Since the first oil embargo of 1967 until very recently, the forward momentum of the old oil based economy resisted new ideas and new directions, even though everyone seemed to agree that retooling America was “inevitable”. Like a super tanker, when it has forward momentum it is impossible to turn quickly. But when it is standing still it can be turned in its own length with a couple of small tugboats. In effect, the economy, like a motionless ship, is weightless for this one moment. Now that the old economy has faltered, why not design and build the next generation economic model based on innovation, conservation and decentralization?
One resource needed to fuel this change in direction is low priced oil. To this end we must reduce our use of fuel faster than the depletion curve reduces the supply, beginning by immediately harvesting the low hanging fruit of energy innovation. A small example might be improving building efficiency. Insulating roofs, calking windows, and adding efficient lighting and computerized thermostats can provide important work for the army of unemployed construction workers. Cutting home energy use from 20% to 40% will save the homeowner money and free up a lot of natural gas to kick-start the conversion of our truck fleet to compressed natural gas. In the summer the electric savings from reduced air-conditioning requirements can be diverted to plug in hybrid cars further reducing our use of oil. The billions that would remain in our economy as oil imports fall will more than pay for a cost-effective retrofit incentive program.
The ability to successfully make this transition is in question. James Howard Kunstler, author of “The Long Emergency”, has said that, in his opinion, “no amount of solar, wind, or nuclear power can replace the cheap oil we have become accustomed to” and that is partially true. If we define ourselves by our standard of living instead our quality of life and hope to hang on to our 6,000-pound SUVs, poorly insulated buildings and industries that are throwbacks to the 1920s, he is absolutely right. But Americans have already shown their ability to change and work towards that higher quality of life for this generation and the next. Something as simple as a compact florescent light bulb can save 80% of lighting costs with no loss of quality of life. By applying this model of innovation to all aspects of American life, we may be on the verge of creating a new generation of vehicles, appliances and manufacturing systems that will reduce energy use between 40% and 60% in the mid term. What I hope Jim has missed is the transformative power of the profit potential of applying innovation, conservation and decentralization in the face of the inevitable return to rising energy costs.
Now a number of people have asked where are we going to get the money to retool our nation? This moment in time also provides us the unusual opportunity to print it. It is well understood that printing money will cause inflation, but right now we have deflation. This makes it possible, for a short period of time, to print money so we may have more dollars to retool our nation creating demand for commodities and labor, slowing or reversing deflation. But once inflation returns, we must stop building the money supply and allow the private sector to sustain the new direction that America appears to have chosen.
None of the programs envisioned above or talked about by the Obama team could ever have been considered until the old economy was dead in the water. Whether you are talking about the redirection of the auto industry, public transportation, manufacturing, agriculture, energy production or new urban design, we are suddenly free to change direction dependent only on the vision and creativity of our leaders in government, academia, small business and industry.
By Alan Hoffman
A Village Founder of Aldea de Santa Fe and Oshara Village, Santa Fe NM
505 316 0449
village@newvillage.com
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Nice writing style. I look forward to reading more in the future.