Time Essay: How to Counter OPEC

(2 of 3)

It has become a commonplace that America has scarcely begun to conserve. Small, voluntary steps can add up to major savings. A driver can save about 5% of the gas he normally uses by keeping his tires properly inflated and another 10% by keeping his engine in tune. A householder can save 15% on his heating bill, and 7.5% on his air-conditioning bill, simply by keeping his storm windows on all year.

But the largest savings will have to come from a combination of more tax incentives for buying home insulation, wood-burning furnaces and other oil-conserving devices, and much stiffer mandatory conservation rules. A number of innovative companies, including Du Pont, A T & T and General Motors, have reduced their energy use relative to their output by 17% to 30% since the Arab oil embargo of 1973; yet many more firms have gone on giddily wasting energy. Consider the beneficial effects of a 20% surtax on the commercial use of electricity: skyscrapers that are lit up all night long and advertising signs that glisten at 4 a.m. would be turned off.

The nation will have to make the most of its available alternatives to oil, and to do that it will have to moderate some of its stringent environmental protection laws. The U.S. is the Saudi Arabia of coal, but a maze of regulations retard the mining, transportation and burning of coal, greatly inflating its price.

Many power-generating companies would switch from oil to coal if the U.S. removed the need for expensive scrubbers on plants that use low-sulfur Western coal. The U.S. also has to dig more coal mines (including strip mines), build more and safer nuclear plants, construct more oil refineries, drill more offshore wells, develop more oil shale projects. All of these will require some trade-offs with antipollution laws, and none of the projects can be accomplished if small groups of zealots set out to block them while OPEC's new Midases sit back and applaud.

The U.S. could also reduce OPEC's power by buying more oil and gas from nations outside the cartel, especially those in the Americas. The need is urgent to create a North American Common Market. Canada has vast supplies of natural gas; the U.S. could negotiate to provide guaranteed markets and much needed capital in return for a steady supply of gas. Mexico is proud and sensitive about its patrimony of oil and gas, but the U.S. could acquire more of it by admitting more Mexican immigrants, giving trade preferences to Mexican exports, exchanging American agricultural technology to help feed one of the world's fastest growing populations and generally treating its neighbor as an equal partner.