U.S. Energy Policy Ought to Send Iran a Lasting Message

One reason Iran is brushing off international condemnation of its nuclear program so defiantly is that its leaders apparently believe they have the world over a barrel.

Facing broad criticism of its decision to resume nuclear research, Iran has responded with transparent threats to cut off oil supplies if the world imposes economic sanctions or other penalties. Last weekend, Iran’s economic minister said any effort to pressure the country over its nuclear program could “raise oil prices beyond levels the West expects.”

This bluster ought to inspire two responses from the U.S. and its allies. In the near term, the answer is to call Iran’s bluff. In the long term, the answer is to reduce its leverage.

The immediate priority is sending Iran a clear message that the world won’t tolerate its resumption, earlier this month, of uranium enrichment research that would advance its capability to build nuclear weapons.

With China and Russia resistant, it will take skillful diplomacy to steer the United Nations toward meaningful diplomatic or economic penalties for Iran. But largely because President Bush has coordinated with European allies on Iran better than he did on Iraq, he begins this diplomatic steeplechase in a much stronger position at home.

It’s not surprising that two conservative foreign policy groups, the Foundation for the Defense of Democracies and the revived Committee on the Present Danger, have scheduled a news conference Monday to urge Bush to seek international sanctions against Iran.

But in the past week, three Democratic senators -- Hillary Rodham Clinton of New York, Bill Nelson of Florida and Evan Bayh of Indiana -- also have urged Bush to pursue sanctions. Bayh wants the Senate to go on record supporting international sanctions that include blocking travel by Iranian officials and punishing nations that invest in Iran’s energy industry.

The U.N. route could still prove a dead end for Bush if China or Russia vetoes action against Iran. But the early indications of bipartisan concern suggest that if the U.N. fails to act, Bush would have domestic support for assembling a “coalition of the willing” committed to economic and diplomatic pressure on Iran.

Sanctions may not dissuade Iran unless reinforced by more carrots (promises of future energy and economic cooperation) and sticks (the “last resort” possibility of military action against nuclear facilities). But if the world blinks from imposing sanctions for defiance now, Iran’s leaders might conclude that their oil threat will deter real penalties at each future step in the confrontation.

That’s a formula for disaster. As Bayh put it, “If we knuckle under” to oil blackmail today, “tomorrow it could be nuclear-weapons-based blackmail, and that is a place we cannot allow ourselves to go.”

Withholding its oil supplies would be painful for Iran: Oil accounts for about 80% of its exports and about half of its government revenue. But no one should pretend an embargo would be painless for the U.S.

America already bars oil imports from Iran; but if Iran withheld some of the 2.7 million barrels of oil it exports daily, the U.S. would suffer from the rise in international oil prices. (Oil prices are already rising just because of Iran’s threats to close the spigot.) And for that we have no one to blame but ourselves.

Since the first oil shocks in the 1970s, the U.S., inexcusably, has allowed its dependence on oil imports to grow, from about a third then to about three-fifths now. Fuel economy for America’s vehicles is virtually no better today than it was 15 years ago, according to federal figures, as small fuel-efficiency gains in passenger cars have been offset by a shift toward gas-guzzling trucks and sport utility vehicles. Washington hasn’t raised fuel-economy standards for passenger cars in two decades.

More expensive gas will encourage somewhat more conservation and greater demand for fuel-efficient cars. But Washington can’t rely on the hidden hand alone to solve the problems it has been too timid to tackle. The federal Energy Information Administration, in its most recent long-range projection, estimated that market pressures would increase automotive fuel efficiency only modestly over the next quarter-century. As a result, the EIA projects that by 2030, the U.S. will import 62% of its oil, up from 58% now. That means another generation of subsidizing -- and remaining vulnerable to -- regimes that threaten our security.

That’s why the energy bill Bush pushed through Congress last summer was such a disappointment. Tilted mostly toward subsidizing domestic producers, the legislation contained some incentives for efficiency. But it also extended a legal loophole that allows automakers to claim greater fuel economy than they achieve. The net result, according to calculations by the nonpartisan Alliance to Save Energy, is that the bill will reduce America’s dependence on foreign oil by a grand total of: nothing. Zip. Zero.

If Iran’s belligerent threats of oil blackmail are not a fire bell in the night warning America to do better, what will be? Increasing energy efficiency, and reducing dependence on foreign oil, should be as much a cause for neoconservatives concerned about preserving American autonomy in the world as it is for environmentalists worried about global warming.

A grand domestic compromise could bundle together tougher fuel economy standards; mandates (sweetened with incentives) for auto manufacturers to build more high-mileage vehicles and for utilities to generate more electricity with renewable energy; and expanded access for producers to some environmentally sensitive domestic supplies. Such a declaration of energy independence would send Iran, and all other unfriendly regimes in the Middle East, as strong a message as the sanctions Tehran’s nuclear defiance is inviting.

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Ronald Brownstein’s column appears every Sunday. See current and past Brownstein columns on The Times’ website at latimes.com/brownstein.