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Crude Awakening

As we move toward more fuel-efficient vehicles and lower imports of crude oil, we must restructure our entire approach to meeting our transportation needs.

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There's much discussion regarding reducing our oil imports from countries that really don't like us, an action that would allow us to become more energy independent. Clearly this is a laudable reason for restructuring our energy consumption and sourcing, not to mention a way of avoiding catastrophes such as BP's accident in the Gulf of Mexico.

According to the Energy Information Administration, the 2008 distribution of uses for petroleum products and their relative share of the total U.S. petroleum consumption had fuel uses at more than 75 percent of consumption. Of the remaining uses, none exceeds 5 percent.

We can certainly make vehicles more fuel efficient and hence cleaner thereby reducing our dependence on foreign oil. But we should take a closer look at these other uses coming out of a barrel of crude oil.

Coming in at only 2 percent is asphalt and road oil. In addition to being used to make asphalt paving, this portion of a barrel of crude is also essential in the manufacture of the common roofing shingle, which has a typical useful life of 20 to 25 years.

The downturn in the economy has motivated Americans to drive less.  This reduction has had a negative impact on the volume of crude-oil imports.

A contractor acquaintance of mine was recently bemoaning the increase in the cost of asphalt roofing shingles. When I inquired as to the cause of the increase she explained that the asphalt portion of a barrel of crude is near the bottom and that the reduced imports had resulted in a shortage of asphalt to make shingles, among other products.

Among the other uses for crude are petro-chemical feed stocks and lubricants. Clearly these products are of significance to our economy.

Let's focus on asphalt. It's possible to recycle asphalt road surfaces, but in the process it's necessary to replenish the volatiles. Our highway system is in a deplorable state of disrepair as a result of decades of neglect. Paving and bridges are at or beyond their load limits and useful lives. One paving contractor I spoke with recently told me that last fall his supplier required a month's notice for his asphalt needs because crude was in such short supply.

Some suggest that we switch to concrete paving for our highways. The rapid expansion of the Chinese economy, among other factors, has placed large demands on the global supply of concrete, causing prices to rise. Also, it's been decades since we constructed a kiln in this country, in large part because of environmental concerns.

These aspects of our transportation infrastructure are problematic, but an even more obvious and often overlooked problem is a result of the law of unintended consequences.

Many states fund their transportation systems largely from fuel taxes. Fuel taxes are generally levied per gallon. As we push for higher fuel efficiencies to reduce imports, we're also reducing the revenue generated by fuel taxes. With the advent of plug-in electric cars, hybrids that get 50 mpg, compressed natural gas, propane and possibly hydrogen we'll see vehicles on the nation's highways that generate little or no fuel tax revenue.

Clearly, as we move toward more fuel-efficient vehicles and lower imports of crude oil, we must restructure our entire approach to meeting our transportation needs. Our economy is based in large part on the ability to move goods and people efficiently.

The cost to correct this situation will be staggering. This change will require that we change our thinking on materials (old and new) and how we pay for the construction, renovation and maintenance of our transportation infrastructure. As we allocate scarce resources, we must also examine the roles of private automobiles, public transit to include buses, bus rapid transit, light rail, passenger rail, high-speed rail, freight rail, and air passenger and freight.

One possible source of revenue that could generate the funds necessary for our transportation needs: a levy based on the mileage recorded between state inspections. The levy could be weighted for vehicle size with lighter vehicles paying lower fees since they do less damage to our infrastructure and heavier vehicles paying higher fees. This arrangement would encourage the use of public transportation to reduce such fees and would also encourage the purchase of lighter, more fuel-efficient vehicles.

There are no doubt other ideas and systems that could generate the revenues needed. All of them should be discussed and evaluated.

Whatever the solution, it's clear that our current system is ill-suited for the inevitable change in the types of vehicles and transportation that will be needed. This country is long overdue for a robust discussion focused on how we're going to pay for and maintain our transportation infrastructure in the future. S

Roy Reynolds, president of the Princeton Group consultancy, is former vice president of work force, economic development and transportation at Virginia Manufacturers Association.

Opinions expressed on the Back Page are those of the writer and not necessarily those of Style Weekly.

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