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Facing America’s Dependence on Foreign Energy

In his 2006 State of the Union address, President Bush called for an end to the U.S. 'addiction' to foreign oil. Energy analysts assess his proposals and their chances for success in a highly politicized climate.

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  • GWEN IFILL:

    Gasoline prices are up, heating bills, too, and Americans, President Bush said last night, and again today, are too dependent on oil from the Middle East.

  • PRESIDENT GEORGE W. BUSH:

    In order to stay competitive, America must end its dependence on oil. (Cheers and applause) When you're hooked on oil from the Middle East, it means you've got an economic security issue and a national security issue.

  • GWEN IFILL:

    The sentiment is not new. During his first year in office, the president said energy dependency was a critical problem.

  • PRESIDENT GEORGE W. BUSH:

    If we fail to act, our country will become more reliant on foreign crude oil, putting our national energy security into the hands of foreign nations, some of whom who do not share our interests.

  • GWEN IFILL:

    But for years, both the President and Vice President Dick Cheney, have stressed the need to increase domestic oil production.

  • VICE PRESIDENT CHENEY (April 2001):

    For the oil we need, unless we choose to accept our growing dependence on foreign suppliers and all that goes with that, we must increase domestic production from known sources.

  • PRESIDENT GEORGE W. BUSH (October 2005):

    We've got to allow environmentally responsible oil exploration in the Arctic National Wildlife Refuge if we want to become less dependent on foreign sources of energy.

  • GWEN IFILL:

    Proponents in Congress have tried, but failed to pass legislation to allow Alaska oil drilling for the last two decades. And last September, after Hurricane Katrina decimated the Gulf Coast, the president began urging conservation.

  • PRESIDENT GEORGE W. BUSH:

    We can all pitch in by using — by being better conservers of energy. I mean, people just need to recognize that the storms have caused disruption.

  • GWEN IFILL:

    This was in itself a shift from 2001, when Vice President Cheney dismissed conservation as a "sign of personal virtue that cannot be the basis of a sound energy policy."

    In last night's address, and today's follow-speech in Tennessee, the President focused instead on alternatives to oil production– electricity and ethanol.

  • GWEN IFILL:

    Presidential declarations about energy independence date back at least to the Nixon and Carter administrations. Yet in 2005, the United States still relied on imported oil for about 60 percent of the nearly 21 million barrels we consumed.

    So has the president reignited an old discussion or launched a new debate? For that, we turn to Robert Lieber, professor of government and international affairs at Georgetown University, and the author of "The American Era: Power and Strategy for the 21st Century." And Amy Myers Jaffe, a research fellow for energy studies at the Baker Institute at Rice University in Houston.

    Professor Jaffe, we heard Congressman Zach Wamp tell Kwame Holman that he thought the president's talking about dependence on oil was a big shift last night, do you agree?

  • AMY MYERS JAFFE:

    Well, I think the president has been focused on energy since he came to office. They had the special task force on energy. I think where the shift is, is the president has connected the dots between having a major technology initiative and beating this sort of energy dilemma we're in — the big question is, with the budget constraints, can we really do something significant?

  • GWEN IFILL:

    How about that, Professor Lieber?

  • ROBERT LIEBER:

    I think the president made an important point last night about the addiction to oil. The problem was it didn't go far enough. A lot needs to be done, especially the low-hanging fruit, which is gasoline consumption, mile-per-gallon standards for cars and the "t" word, gasoline taxes. We need to do it all. We need conservation and we need to drill in Alaska.

    We need the things the president talked about with synthetic fuel, biomass, but the immediate target has to be gasoline consumption, and that's where there are big opportunities to deal with auto mileage, but it requires stepping on a lot of toes politically, both in terms of federal regulation and in terms of taxes, and as yet, that hasn't been the case for either Democratic or Republican administrations or either party in Congress.

  • GWEN IFILL:

    Amy Jaffe, let's walk through some of the assertions the president made last night. One of them was that the United States needed to cut its dependence — and he said using the same phrasing today in Tennessee — on Middle East oil. How significant is that?

  • AMY MYERS JAFFE:

    Well, you know, you have to remember, actually, we could reduce our full dependence on oil from Saudi Arabia by just closing the loophole and requiring light trucks and SUV's to get the same mileage standards as sedans.

    But really the question is not how much oil from Saudi Arabia or the Middle East comes to the United States; it's how much is going to be used worldwide by our allies and trading partners. So we really need to focus on the right question.

    We definitely have the power in our own country to think about how to reduce the growth in gasoline use in this country. We're still not making the kinds of sacrifices that many Americans are not willing to make.

    And I think the president is correct, that can come from technology, but, you know, how are we going to do that? Are we going to do that through regulation, as was suggested, through mileage standards? Are we going to do that by having a major research program? And if we're going to have a major research program, are we going to make industry do that? Is the federal government going to take the lead?

    There just wasn't enough meat on the bones to really get us someplace significant.

  • GWEN IFILL:

    Amy Jaffe just listed all the questions I planned to ask you, but let me start with one, which is this question of where the oil actually comes from. Is it the Middle East, or is it Iran, Venezuela, and Mexico, Nigeria, where are we dependent on foreign oil?

  • ROBERT LIEBER:

    Well, four of the five most important oil exporters to the United States in terms of volume are not from the Middle East. They include three in North America, Venezuela, Canada, and Mexico, and Nigeria. Saudi Arabia is only one of those top five and not the leading one either.

    But the issue is oil import dependence and oil consumption. It's a worldwide problem. When the market is tight as a drum as it is now, anything that happens, war, revolution, sabotage, a hurricane, can make the system go haywire, so you become vulnerable to energy blackmail potentially from Iran in the future or a dictator – or a virtual dictator in Venezuela, and the president is right —

  • GWEN IFILL:

    Or disruption in Nigeria as we saw last week.

  • ROBERT LIEBER:

    Sure, Nigeria is another example and point, questions about Russia. And the key point is that as long as we have such high oil consumption and imports, it jeopardizes our financial security and our national security, and that's why a much more dramatic kind of set of proposals would have been called for, and one which steps on a lot of toes politically.

    But if you had a package, which includes both conservation and production, both taxes and improvements in mileage standards, bio-fuels and new energy sources, et cetera, you might be able to get something through.

    But it would really require a dramatic appeal to the public, and we may not get it till we have yet another even more serious crisis.

  • GWEN IFILL:

    Amy Jaffe, two questions picking up on that. One is whether it's possible for — whether you were surprised — is the first question — that the president didn't mention domestic oil production as part of his talking about energy strategy last night? And the second part is whether it's possible to do all the things that Professor Lieber talks about in one passable piece of legislation.

  • AMY MYERS JAFFE:

    Well, the president didn't mention production, but there is a big move on the Hill by the Republican Party to reopen discussions, not only about Alaska, but also on our offshore in Florida and other parts of the U.S. Those are all things we have to consider.

    I think we need to remember two things: Number one, we've had thee major hurricanes that knocked down oil production platforms in the Gulf of Mexico, and I can attest as a person from Texas, that I went to the beach this year, and there was no damage to the beaches from any of those storms.

    So we have to ask ourselves what exactly are we concerned about with drilling, and does that just require to us have some more enforcement from the EPA, and could we achieve, you know, sort of safe drilling, which I think is possible?

    The second thing, which I think really has been hit home and people really need to understand is that there isn't one silver bullet. We're going to have to do a wide range of things to make any progress on this problem because of the order of magnitude of the amount of oil we use in this country.

    But when people feel upset or emotional, after Katrina, as the way people felt when they were out panicky in line, trying to get gasoline, is that in our electricity sector, we use a wide variety of fuels. If we have a problem in one fuel, we have the possibility of enhancing electricity production in plants that use other fuels.

    But in our cars, we have no option right now, no option at all, and so if something happened to disrupt the gasoline chain — for example, a Category Five hurricane. It doesn't have to be instability in the Middle East. It could also be something that happens right here at home — we really right now have no alternates, and we need to look at how do we get some alternatives, how do we diversify our transportation system?

    Should we have every good in this country shipped by truck? Would it be possible to revitalize the use of rail to ship goods? We have a lot of different options we can look at, including improvements to our automotive technology.

  • GWEN IFILL:

    Well, let's talk about two of the options the president mentioned last night, Professor. He talked about ethanol, and expanding different kind — sources for ethanol production as an alternative to gasoline. And he talked about making longer-lasting batteries for hybrid cars like the Prius, the one – the fashionable hybrid car. Are those baby steps, big steps?

  • ROBERT LIEBER:

    Both of those are terrific ideas. The Brazilians have made major breakthroughs in the use of ethanol, and clearly given the strength of the agriculture sector in the U.S., that has real promise a half dozen years down the line. It won't solve everything. You need a mix of measures, so it's a good step.

    The attention to better electric batteries for hybrid cars is excellent. These are — these are modest steps, though, in the near term, and the research is all well and good, but for the foreseeable future, the real issue is dependence on oil, whether it is produced here at home or imported.

    We only get about 13 percent of our oil from the Persian Gulf at the moment, but because the market is so tight, almost anything affecting the world supply-demand balance, wherever it occurs — whether in our Gulf with the hurricane or in Nigeria with riots or something unstable in the Middle East — can put us in jeopardy.

  • GWEN IFILL:

    Two discussions on Capitol Hill these days, one is about conservation. The other we heard Sen. Specter talk today about an oil windfall tax. Are any of those starters at all, in your opinion, Professor?

  • ROBERT LIEBER:

    Well, conservation has to be part of the package — energy efficiency. I think one of the reasons why it's been so devilishly hard to get things done is that almost anything you want to do as part of a broader package steps on somebody's sectoral interest, like the auto industry, or pressure group interest, for instance, opposition to drilling in Alaska because of the caribou —

  • GWEN IFILL:

    Or a windfall tax.

  • ROBERT LIEBER:

    Or things like that, so there are both ideological objections on both left or right and there are sectoral objections by interest groups and so forth, which is why I think the real key to a breakthrough would be somebody proposing an overall package with lots of different pieces addressed to the big central question, which is fuel efficiency, but which picks up these other parts, whether nuclear power, conservation, new technologies, or what have you.

  • GWEN IFILL:

    Amy Jaffe, one piece of that or the Whole Magilla?

  • AMY MYERS JAFFE:

    Well, you know, they tried to do the Whole Magilla with the energy bill and because of these sectoral interests, it was a huge failure.

    I really think that Americans need to get a grip. We need to act responsibly. We need to understand that if there are hurricanes again on the Gulf Coast, we're all going to pay the price for that, and we're all going to be disrupted in our personal habits, and therefore we have to pitch together.

    The president has to show more leadership on this issue. It's a good start running off with the state of the union. He needs to stand up. He needs to arm wrestle the special interests, and he needs to move forward, but I really still feel that the key is really in laying out future down with young people, getting them interested in doing energy research, making sure the money is there to pay for them to have jobs in the energy sector, in new energy sectors, in subsidizing research, in these important areas that we've discussed this evening.

    We really need an Apollo-sized program. What the president did last night is say, "I have a great idea. Let's go to the Moon but, by the way, I'm only going to invest $50 million or $100 million to get there."

    He needs to find a way, whether it's through energy taxes or through higher taxes on industry, or whether it's through just having Americans give up their Bush tax cut in exchange for having a major program – we need to pitch together through great leadership to have a major program to change the future of how we use energy.

  • GWEN IFILL:

    Amy Jaffe, Robert Lieber, thank you both very much.

  • ROBERT LIEBER:

    Thank you.

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