By: Jeffrey Leonard
Two years ago, as he retired as director, Vice Admiral Richard Truly told the staff of the National Renewable Energy Laboratory: "I honestly believe that it is at the intersection of our energy use, our environment, our economic well being, and our national security that society finds the greatest engineering and scientific challenges on Earth today." Now, virtually the entire American political spectrum is racing to embrace Truly's vision. One gets the growing sense that, at least until 2008, the hot topic in America is alternative energy and that every smart person in the country is talking about it, legislating on it, or investing in it. This tremendous surge of bipartisan support from politicians, leading intellectuals, and "smart-money" financiers could undergird a long-term shift in national resolve to diversify our energy supply, utilize energy more efficiently, and ultimately let the marketplace price energy to reflect its true cost. At the same time, the next few years also mark the period of maximum peril for an America needing once and for all to rise above vested economic interests, petty politics, and slick gimmickry to forge a long-term and sustainable energy policy. In their current frenzy to get on the new energy bandwagon, many politicians, policy advocates, and pundits appear to make little distinction between the concepts of energy independence and energy security. The subtle nuances of language today potentially belie huge wrangles about future domestic environmental and economic policy issues, as well as international diplomatic and trade issues. For example, environmentalists who bandy about the term "energy independence" need to be prepared to live with the consequences as it implies not only exploitation of home- grown American renewable resources but the potential massive development of U.S. coal resources, renewed offshore oil exploration, and the opening of ANWR and other remote areas. As in investing, the safest way to maximize returns and lower risk is to diversify by markets, geographies, and sources of supply. While America has abundant supplies of corn for ethanol, other nations, many in our own hemisphere, may prove to be cheaper and more efficient suppliers of ethanol fuels from tropical sugars. And, with soy oil supplies constrained, and other edible oils trading at high prices, there is no question that the raw material prices for the biodiesel market in America will rise dramatically in years to come if feedstocks are not imported. My opinion is that American consumers and the American economy win if we pursue policies that emphasize energy security -- diverse supplies of all energy sources -- rather than an America First approach to energy independence. It is also important to remember that the new energy solutions being touted as the saviors of the American way