Brittle Power- PARTS 1-3 (+Notes) - Natural Capitalism Solutions

256National Energy SecurityEven before high sticker prices and high interest rates devastated new car salesduring 1980–82, gas-guzzlers were starting to stay in the fleet longer—at thevery moment when, to reduce oil dependence, they should be turning overfaster. (This is especially damaging because fleet efficiency is a geometric, notan arithmetic, average: a fleet in which eighty percent of the cars get sixty mpgwhile twenty percent get ten mpg has an average efficiency of thirty, not fifty,mpg.) Just as buildings can be fixed up faster if efficiency loans from, say, utilitiesrelieve people of the up-front capital burden, 72 so gas-guzzlers can bereplaced faster if investment that would otherwise go to increase oil supplieswere instead loaned or given out for car replacement. For example: 73Rather than spending twenty-odd billion dollars now (plus perhaps sixtyeightbillion dollars later) to subsidize synfuel plants which will probablynever compete with oil, 74 the U.S. could save more oil faster by using some ofthe same money to give people diesel Rabbits or equivalent—provided theywould scrap their Brontomobiles to get them off the road. (A gas-guzzler cannotjust be traded in, because then someone else might drive it; it must berecycled and a death certificate provided for it.)Alternatively, compared with synfuels it would save oil faster to pay peopleat least three hundred dollars for every mpg by which a new car improveson a scrapped one. (People who scrap a gas-guzzler and do not replace itshould get a corresponding bounty for it.) This oil-supplying measure wouldpay back in fewer than five years against synfuels.Instead of merely redirecting synfuel subsidies into better buys, as in the twopreceding examples, it would be still better to abolish the subsidies and use afree-market solution. The U.S. car industry plans to spend on the order of fiftybillion dollars on retooling during 1985–95. 75 Suppose that the industry spent asimplausibly large a sum as one hundred billion dollars extra during the 1980son retooling, in one giant leapfrog, so that the average car made would get sixtympg—twenty-odd worse than the best prototypes today. A hundred billion dollarsis much too high a figure; it is probably enough to rebuild all of Detroit. Amore realistic figure might be only a fifth or a tenth as large. Nonetheless, anextra retooling cost of one hundred billion dollars, spread over a new U.S. fleetof cars and light trucks, would raise the average cost of a vehicle by about sevenhundred and seventy dollars. Buyers would recover that cost from their gasolinesavings, at the 1981 gasoline price, in fourteen months.The trouble with this last illustration is that Detroit does not have themoney. But the oil industry does, and is currently spending it on extremelyexpensive and risky drilling. If instead Exxon drilled for oil under Detroit byloaning the car-makers money for retooling to state-of-the-art efficiencies,everyone would be better off (assuming some solution to the obvious antitrust