Outside perspective is always useful, especially in Detroit. It's a one-industry town, and we talk to each other a lot. Ourselves, and Washington regulators and policians.
So James Woolsey turned heads today when he told the Society of Automotive Analysts that Detroit and Washington can't break OPEC's strategic energy hold with either fuel economy rules or cautious searches for alternative fuels.
Woolsey was speaking as co-founder of the U.S. Energy Security Council, but his view was forged by his past. Woolsey was director of the Central Intelligence Agency in the 1990s and also served as undersecretary of the Navy and in two other positions as a result of presidential appointments.
So while other speakers from General Motors, Ford, Toyota and Chrysler talked about the nuts and bolts of meeting tougher 2025 fuel economy standards, Woolsey said the United States can't get energy independence by requiring automakers to sell fuel-efficient vehicles.
"It will help our balance of payments a bit," he said. But America can't substantially affect world oil prices or availability by using less auto fuel or bumping oil production, he added. As long as OPEC has 78 percent of global petroleum reserves, if the U.S. cuts consumption, "OPEC will simply pump less oil and keep prices high."
The SAA session at Federal-Mogul headquarters in Southfield, Mich., was billed as "Future Fuels and Powertrains: A Reality Check," and Woolsey offered several.
- There's high potential for more global energy shocks like those of the 1970s. "Iran is a year away from having a nuclear weapon" and then the Saudis and others will counter with their own nuclear weapon programs, he said. The oil-rich region is becoming even less stable.
- Woolsey strongly backs switching the primary U.S. auto fuel from oil to natural gas, which is available in abundance in North America. He prefers converting it to liquid methanol rather than using it as a compressed gas. His view: It's cheap, readily available and less subject to global disruption, and vehicles can be converted to run on it for under $100 a unit.
- Woolsey also advocates scrapping subsidies for corn-based ethanol production and oil exploration.
Woolsey didn't dwell on the impediments to implementing his recommendations. But for an industry usually more focused on compliance than vision, some provocative ideas are kind of refreshing.