"Oil, oil, everywhere...except in the United States." While this statement is not completely accurate, it is true that the United States imports a lot of oil—approximately 10 million barrels a day to keep the consumer and industrial machinery humming along. The top five exporters of oil to the United States in terms of millions of barrels per day are: Saudi Arabia (1.5 million), Canada (1.5 million), Mexico (1.5 million), Venezuela (1.35 million), and Nigeria (1.0 million).

In the United States, petroleum products—especially motor gasoline, diesel fuel, and jet fuel—provide almost all of the energy consumed in the transportation sector. Moreover, transportation is the greatest single user of petroleum, accounting for an estimated 67 percent of all U.S. petroleum consumed in 2000. Gasoline sales are about 150 billion gallons per year and jet-fuel consumption is around 70 billion gallons. Most of the 60-plus million gallons of diesel used each year is consumed by trucks. Our overall demand for petroleum products is forecasted to grow by about 1.2 to 1.5 percent per year.

The U.S. trade deficit in February 2005 reached a record $61 billion. Rising oil prices accounted for two-thirds of the monthly increase in imports. Most forecasts expect a barrel of oil to fetch between $40 and $60 over the next three to five years. The forecasters generally include a caveat stating that their forecast assumes that no major event occurs that would affect the supply of world petroleum. One major financial firm recently stated that under certain planning scenarios petroleum could hit $105 a barrel.

From these sketchy facts, one might conclude that the U.S. economy is vulnerable and at some risk of disruption due to our energy consumption. Our dependence on imported oil increases daily. And, we are importing the bulk of our oil from sources that range from countries actively opposing the United States to those that are politically unstable. One might conclude that the search for alternative forms of energy is not only a good idea but might be as important as putting a man on the moon.

But all is not lost. Last month, the House of Representatives passed an Energy Bill that its backers say would help wean Americans off foreign oil. The proposed legislation has several key provisions. The first is a subsidy of $2 billion for offshore drilling—a subsidy to an industry reporting sharply increased earnings from higher oil prices. The second involves a $2 billion subsidy to the makers of gasoline additives. The third key provision is a $1.8 billion subsidy for the Energy Department's "clean coal" research and development program.

Passage of this bill in the House might be a victory for lobbyists, but it is hardly a win for the constituents or the stakeholders seeking an assured supply of energy at a reasonable cost. The latest energy bill, like the energy bills enacted over the past several years, does not clearly address the issue of developing alternative energy sources. To be sure, there are a few new wrinkles. For example, the bill seeks to extend daylight savings time by two months to reduce the need for electricity and to allow drilling in the Artic National Wildlife Refuge. But even if these actions are taken, they are simply Band-Aids rather than substantive solutions to the country's energy problems.

President Bush noted a few months ago that he did not have a silver bullet to the energy problem. Representative Joe L. Barton, the Texas Republican who chairs the Energy and Commerce Committee, said after the House vote, "My question is, well isn't something better than nothing?" An independent energy economist might answer the question: "Not much better, Mr. Chairman." Now it's up to the Senate, which will consider its own version of the Energy Bill in May.

Most logistics and supply chain executives know that the nation's transportation systems run on energy. Any bottleneck that develops or a sudden 15- to 20-percent reduction in oil imports would slow the movement of freight to critical levels within two weeks. It's like a table stakes poker game at the end of the evening. The stakes have gone up as developing industrial countries have started to compete for global energy supplies. This competition, combined with new long-term geopolitical petroleum alliances, has ratcheted up both the short-term and longer-term stakes.

So what can we do about the nation's pressing energy situation? I don't have a silver bullet either, but perhaps we should consider the following:

1. Members of the transportation and logistics community should lobby Congress to get serious about alternative energy sources. It's time for Congress to put the pursuit of pork aside and mount a real nonpartisan energy bill—an energy bill that does not dole out money to entities without close supervision and clear outcomes for alternative energy resources. This is probably a quixotic expectation. But at some point, Congress must think about the future of energy in our country and start putting the foundation in place for a new long-term policy.
2. Congress might think about adding one dollar to each gallon of gas sold in the United States. The prospect of another dollar added on top of already record-high prices at the pump would not likely be greeted with cheers from most drivers (and certainly not the SUV drivers). Yet, if every dollar raised were strictly earmarked for the research and commercialization of alternative energy sources, perhaps Congress and their constituents would be willing to make this commitment.
3. In the meantime, every firm, every transportation company, every logistics services provider should be making energy resources part of their strategic plan. Think about it: If energy supplies were cut off or reduced long or even short term, how would that affect your business?

Assuring sufficient levels of energy in the future is not an easy task. But adopting the kinds of measures listed above would at least signal that we're serious about taking on the challenge.