Reality is stark: Nearly every major foreign policy challenge we face is aggravated by our continued addiction to oil. Recent developments in Europe, the Middle East and Africa only underscore this fact. But a new president and changed economic conditions offer the chance to take a bold step toward freeing our nation from the grip of foreign petroleum.
In March 2006, I characterized America's excessive reliance on oil as "the albatross of national security." When oil prices soared to a peak of nearly $150 a barrel last summer, oil riches emboldened authoritarian rulers from Venezuela to Iran to the genocidal regime in Sudan. Yet the huge external costs of our oil addiction -- in terms of national security, economic vulnerability and environmental damage -- are not accounted for in the price Americans pay at the pump. In the Jan. 5 edition of the Weekly Standard, conservative writer and columnist Charles Krauthammer made a strong case for a "net-zero gas tax" proposal that would match, dollar for dollar, an increase in the federal gas tax with a decrease in payroll tax, which is paid by every working American. Because it represents no net tax hike, it would bring the benefits of reduced consumption while putting money into the hands of Americans.
A gasoline tax is transparent, easy to administer and targeted at the one sector that burns most of our oil. We know it would cut imports. When gasoline prices topped $4 a gallon last year, Americans chose to use less, leading to a major drop in gasoline consumption.
The gains from accurately priced gasoline would grow as Americans demanded more fuel-efficient vehicles, chose nonpetroleum alternatives to power them and found public transit options that work. Pricing gasoline to reflect its true cost to the nation would help spur a vast market in which oil alternatives such as advanced biofuels would become competitive and innovation would flourish.
The auto industry would benefit from knowing that it could invest aggressively in high-mileage technology without worrying that consumers might turn back to inefficient gas guzzlers. Americans sent nearly $430 billion to other countries in 2008 for the cost of imported oil -- an amount equal to almost half of the stimulus package.
Those hundreds of billions should be spent to build a new energy economy here, not shipped to dangerous regimes overseas.
No tax is perfect, and some special provisions may be necessary for individuals and groups disproportionately affected. But we as a nation are already suffering every day from our oil dependence, and decisive measures are needed.
U.S. Sen. Richard Lugar, R-Indiana, is a member of the Senate Foreign Relations Committee. This column first appeared in the Washington Post.
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