BizJournals Portfolio
Jul 16 2008 12:00am EDT

Andy Grove Sings The Car Electric

Blaise Zerega says plug it in. Oil at $140 per barrel. President Bush wants to drill for oil offshore. Gas is heading towards $5 a gallon. Oh, and the United States could soon be in a bidding war with China among others, for the petroleum needed to power the U.S. economy. Think the housing crisis is bad? We ain't see nothing yet.

Unless, as Andy Grove writes in the current issue of The American, we move to electric cars -- and now. Grove's analysis and insight are spot-on, particularly in the context of the current events I mentioned up top.

His scoop of perception rests on debunking the myth of energy independence. In a global economy, it's an oxymoron. "Oil moves to the highest bidder, " he writes. This is a point lost on the politicians and the gullible public when talking about drilling off the coast lines of California or of Florida. There's no guarantee that the oil will end up being sold in the U.S.market, Oil companies are out to maximize profit, not to serve the public interest.

And then here comes the breakthrough. Grove introduces the concept of stickiness. He argues that
oil is not sticky. "Fleets of tankers carry it across oceans day and night," I'll go further and say that oil found in Florida could wind up powering cars on the streets of Beijing. It' simple. Oil is a commodity to be bought and sold, traded and distributed around the globe.

On the other hand, "Electricity can be transported only over land. In other words, it is "sticky": it stays in the continent where it is produced," Grove writes. And electricity can be produced from multiple sources like coal, hydro, solar, and wind.

Only by adopting a sticky energy policy, can the U.S. protect its economy from "interruptions in the supply of such a critical commodity." And of course, there are enormous environmental benefits to be realized as well.
But If it's true that the public takes action only when its pocketbook is affected, then pushing the economic consequences front and center is one way to get people to wake up.

Now, if only others will echo Grove's rallying cry.


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