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sense. The more we keep on using the oil, particularly the imported oil, the more we face a very obvious array of
problems. Our analysis assumes that they all cost nothing, but nothing is not the right number. It could well be
enough to double the oil price, for example. And one of the worst of these is what it does to our standing in the
world if other countries think that everything we do is about oil, if we have to treat countries that have oil
differently than countries that don't have oil.
And our military get quite unhappy with having to stand guard on pipelines in Far-off-istan when what
they actually signed up for was to protect American citizens. They don't like fighting over oil, they don't like
being in the sands and they don't like where the oil money goes and what sort of instability it creates. Now, in
order to avoid these problems, whatever you think they're worth, it's actually not that complicated. We can save
half the oil by using it more efficiently, at a cost of 12 dollars per saved barrel. And then we can replace the other
half with a combination of advanced bio-fuels and safe natural gas. And that costs on average under 18 dollars a
barrel. And compared with the official forecast, that oil will cost 26 dollars a barrel in 2025, which is half of
what we've been paying lately, that will save 70 billion dollars a year, starting quite soon. Now, in order to do
this we need to invest about 180 billion dollars: half of it to retool the car, truck and plane industries; half of it
to build the advanced bio-fuel industry. In the process, we will gain about a million of good jobs, mainly rural.
And protect another million jobs now at risk, mainly in auto-making. And we'll also get returns over 150 billion
dollars a year. So that's a very handsome return. It's financeable in the private capital market. But if you want it
for the reasons I just mentioned, to happen sooner and with higher confidence, then -- and also to expand choice
and manage risk -- then you might like some light-handed public policies that support rather than distorting or
opposing the business logic. And these policies work fine without taxes, subsidies or mandates. They make a
little net money for the treasury.
They have a broad trans-ideological appeal, and because we want them actually to happen, we figured out
ways to do them that do not require much, if any, federal legislation, and can, indeed, be done administratively
or at a state level. Just to illustrate what to do about the nub of the problem, namely, light vehicles, here are
four ultra-light carbon-composite concept cars with low drag, and all but the one at the upper left have
hybrid drive. You can sort of have it all with these things. For example, this Opel two-seater does 155 miles an
hour at 94 miles a gallon. This muscle car from Toyota: 408 horsepower in an ultra-light that does zero to 60 in
well under four seconds, and still gets 32 miles a gallon. I'll say more later about this.
And in the upper left, a pioneering effort 14 years ago by GM -- 84 miles a gallon without even using a
hybrid, in a four-seater. Well, saving that fuel, 69 percent of the fuel in light vehicles costs about 57 cents per
saved gallon. But it's even a better deal for heavy trucks, where you save a similar amount at 25 cents a gallon,
with better aerodynamics and tires and engines, and so on, and taking out weight so you can put it into payload.
So you can double efficiency with a 60 percent internal rate of return. Then you can go even further, almost
tripling efficiency with some operational improvements, double the big haulers' margins. And we intend to use
those numbers to create demand pull, and flip the market.
In the airplane business, it's again a similar story where the first 20 percent fuel saving is free, as Boeing
is now demonstrating in its new Dreamliner. But then the next generation of planes saves about half. Again,
much cheaper than buying the fuel. And if you go over the next 15 years or so to a blended-wing body, kind of
a flying wing with internal engines, then you get about a factor three efficiency improvement at comparable or
lower cost. Let me focus a minute on the light vehicles, the cars and light trucks, because we all know the most
about those; probably everybody here drives one. And yet we may not realize that in a standard sedan, of all the
fuel energy you feed into the car, seven-eighths never gets to the wheels; it's lost first in the engine, idling at zero
miles a gallon, the power train and accessories.
So then of the energy that does get to the wheels, only an eighth of it, half of that, goes to heat the tires
on the road, or to heat the air the car pushes aside. And only this little bit, only six percent actually ends up
accelerating the car and then heating the brakes when you stop. In fact, since 95 percent of the weight you're
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