Greenspan urges U.S. away from oil dependence | AspenTimes.com

Greenspan urges U.S. away from oil dependence

Greg Schreier

Economic mastermind Alan Greenspan has a few ideas of his own about sustainable energy – and very few of them include long-term use of crude oil products.The former Federal Reserve chairman dissected the nation’s dependence on oil Thursday at the Aspen Ideas Festival. One thing was clear, however: The current state of affairs simply won’t do.”I don’t know what it is to say we’re independent,” Greenspan said.A big problem with oil prices is that the United States no longer has control over them like it once did. Now the country is subject to the whim of other markets. And that control is not likely to return.”Can we in any meaningful way regain price supremacy?” Greenspan asked rhetorically.However, he didn’t paint a completely bleak picture. Despite some market observers’ disdain of electric hybrids, Greenspan said they ultimately will have to be an option.”We’ll move on not only to hybrids, but to plug-in hybrids,” he said. “We will gradually wean ourselves off petroleum.”Ethanol fuels have also been discussed on a national level as a potential solution, but not even all the corn in the United States could produce nearly enough ethanol fuel to decrease oil dependence significantly. America uses millions of barrels of oil per day, and the United States can only replace a fraction of that with ethanol.Besides, using every bushel of corn for fuel wouldn’t be practical.”The pigs would starve, and that would be unfortunate,” Greenspan joked.Another alternative could lie in nuclear power, which France has used successfully for many years. Using that source could displace coal, which is responsible for most of America’s carbon emissions.Geopolitical crises, which were not such an issue in previous decades, could also have a disastrous effect on oil prices, he said.”We can absorb a higher price than $3,” Greenspan said, noting that disposable income among American families is generally high. In addition, a smaller portion of that income is spent on fuel compared with previous decades.Greenspan also spoke about Iraq, an invasion he supported, not because of weapon threats or partisan politics, but because he feared what would have happened if Saddam Hussein had remained in control of Iraq’s plentiful oil supply.”Taking him out, frankly, was a major positive,” Greenspan said.And while oil prices will continue to go up, Greenspan said, it’s an increase the American economy will endure at least temporarily. It’s a system that stabilized relatively quickly after 9/11, defying expectations of potential depression, Greenspan said.”We have over the years developed a very flexible system,” he said.Greg Schreier’s e-mail address is gschreier@aspentimes.com