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The American Recovery and Reinvestment Plan currently making its way through the Congress contains, among much else, the seeds of a multi-billion dollar overhaul of energy. As part of the efforts to sell the bill, President Obama gave a brief speech last week outlining his goals for revamping the supply and use of energy. Starting with the assertion that “America’s dependence on oil is one of the most serious threats that our nation has faced”, coupled with the threat – “violent conflict, terrible storms, shrinking coastlines, and irreversible catastrophe” – of climate change, it is clear the new President clearly understands the seriousness of our oil problems. Moreover, he seems determined to do something about them after decades of inaction.
Once you understand that “energy independence” is a politically acceptable euphemism for peak oil, the details of the proposals such as doubling the production of alternative energy, 3,000 miles of new transmission lines, fuel efficient cars, and massive weatherization make sense. The primary purpose and justification for the expenditure of $800-900 billion envisioned in the plan is to create jobs quickly, not to prepare for oil depletion. While not optimum to prepare for peak oil (do we really need more new roads and more ethanol from corn?) and slow global warming, the plan is the best we have had in recent times and at the minute seems likely to become law.
The major concerns about the plan are the massive cost and its effectiveness in creating jobs. Can borrowing on a multi-trillion scale be accomplished without triggering a period of devastating inflation and will disappearance of jobs be reversed quickly enough? These are the questions for which there are a thousand opinions.