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Or we could use the saved gas directly to cover all of this balance, or if we used it as hydrogen, which is
more profitable and efficient, we'd get rid of the domestic oil too. And that doesn't even count, for example, that
available land in the Dakotas can cost effectively make enough wind power to run every highway vehicle in the
country. So we have lots of options. And the choice of menu and timing is quite flexible. Now, to make this
happen quicker and with higher confidence, there is a few ways government could help. For example, fee-bates,
a combination of a fee and a rebate in any size class of vehicle you want, can increase the price of inefficient
vehicles and correspondingly pay you a rebate for efficient vehicles. You're not paid to change size class. You
are paid to pick efficiency within a size class, in a way equivalent to looking at all fourteen years of life-cycle
fuel savings rather than just the first two or three.
This expands choice rapidly in the market, and actually makes more money for automakers as well. I'd
like to deal with the lack of affordable personal mobility in this country by making it very cheaply possible for
low-income families to get efficient, reliable, warranted new cars that they could otherwise never get. And for
each car so financed, scrap almost one clunker, preferably the dirtiest ones. This creates a new million-car-a-year
market for Detroit from customers they weren't going to get otherwise, because they weren't creditworthy and
could never afford a new car. And Detroit will make money on every unit. It turns out that if, say, African-
American and white households had the same car ownership, it would cut employment disparity about in half by
providing better access to job opportunities. So this is a huge social win, too.
Governments buy hundreds of thousands of cars a year. There are smart ways to buy them and to
aggregate that purchasing power to bring very efficient vehicles into the market faster. And we could even do an
X Prize-style golden carrot that's worth stretching further for. For example, a billion-dollar prize for the first U.S.
automaker to sell 200,000 really advanced vehicles, like some you saw earlier. Then the legacy airlines can't
afford to buy the efficient new planes they desperately need to cut their fuel bills, but if you felt philosophically
you wanted to do anything about that, there are ways to finance it.
And at the same time to scrap inefficient old planes, so that if they were otherwise to come back in the
air, they would waste more oil, and block the uptake of efficient, new planes. Those part inefficient planes are
worth more to society dead than alive. We ought to take them out back and shoot them, and put bounty hunters
after them. Then there's an important military role. That in creating the move to high-volume, low-cost
commercial production of these kinds of materials, or for that matter, ultra-light steels that are a good backup
technology, the military can do the trick it did in turning DARPAnet into the Internet. Just turn it over to the
private sector, and we have an Internet.
The same for GPS. The same for the modern semi-conductor industry. That is, military science and
technology that they need can create the advanced materials-industrial cluster that transforms its civilian
economy and gets the country off oil, which would be a huge contribution to eliminating conflict over oil and
advancing national and global security. Then we need to retool the car industry and do retraining, and shift the
convergence of the energy and ag-value chains to shift faster from hydrocarbons to carbohydrates, and get out
of our own way in other ways. And make the transition to more efficient vehicles go faster.
But here's how the whole thing fits together. Instead of official forecasts of oil use and oil imports going
forever up, they can turn down with the 12 dollars a barrel efficiency, down steeply by adding the supply-side
substitutions at 18 bucks, all implemented at slower rates than we've done before when we paid attention. And if
we start adding tranches of hydrogen in there, we are rapidly off imports and completely off oil in the 2040s.
And the one thing I'd like to point out here is that we've done this before. In this eight-year period, 1977
to 85, when we last paid attention, the economy grew 27 percent, oil use fell 17 percent, oil imports fell 50
percent, oil imports from the Persian Gulf fell 87 percent. They would have been gone if we'd kept that up one
more year. Well, that was with very old technologies and delivery methods.
We could rerun that play a lot better now. And yet what we proved then is the U.S. has more market
power than OPEC. Ours is on the demand side. We are the Saudi Arabia of "nega-barrels." (Laughter) We can
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