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Fall 2006

Oil Junkies

How corruption and greed led America from "green" electric trolleys to polluting, petroleum-powered automobiles--and what we can do now.

RJ Cover, Fall 2006 INTERVIEW WITH Edwin Black

Edwin Black is the author of IBM and the Holocaust, which in 2003 won the top two awards of the American Society of Journalists and Authors for best book and best investigative article; and of three other books, including War Against the Weak: Eugenics and America's Campaign to Create a Master Race. His most recent book is Internal Combustion: How Corporations and Governments Addicted the World to Oil and Derailed the Alternatives, from which the following is drawn. He was interviewed by Reform Judaism editor Aron Hirt-Manheimer.

According to your book, there was a time in America when we as a nation were not dependent on oil to power our cars.

Yes. In the 1890s, most of the original automobiles were smooth-running, quiet, environmentally friendly electric vehicles powered by lead batteries. Thousands of such vehicles traversed our city streets and even the back roads of rural America. How we regressed from electric to oil is a complex story rooted in corruption and control. Here's the short version: During the first years of the 20th century, the electric vehicle people were "the bad guys" in America. The key players were the Pope Manufacturing Company in Hartford--which had secured a monopoly on the bicycle industry; the Electric Vehicle Company in New York and Philadelphia, which controlled a monopoly on batteries; and a small group of powerful carmakers such as Olds and Packard. Together, they created an automobile cartel that tried to dictate who could and could not buy and sell a car in America--and what kind of car. These monopolists acquired a primitive automobile patent called the "Selden Patent," designed from the outset to be used as a patent litigation weapon. Armed with this patent, the cartel threatened to file an expensive patent infringement case and injunction against every American who purchased an inexpensive internal combustion car that the "Selden Trust" did not authorize. At the same time, the cartel allowed its own technologically superior electric vehicles to falter in the marketplace in favor of high-priced, extremely profitable gasoline-burning cars designed for the moneyed elite. Remember, this was before mass production; each car was hand-built. Oil, especially oil from the Mideast, was very cheap, much cheaper than a lead battery. What's more, supply and demand of oil could be manipulated, yielding billion-dollar profits.

Soon, production of electric vehicles became limited to a few dozen small, independent car companies that could barely keep the flame of clean auto-making alive.


Didn't Henry Ford play a major role in popularizing internal combustion automobiles?

Yes, but that's only the end of the story. The beginning is fascinating. In 1903, Ford introduced a cheap, mass-produced internal combustion machine for the average man that revolutionized the car industry. The Model T became the "everyman" car. This was also a time when electric vehicles and battery makers--even decent independent ones--were perceived by the masses as scoundrels, crooks, and liars. For decades, imperfect, broken electric-battery technology had been used by devious financiers to launch stock swindles and monopolistic trusts based on exaggerated technology and capability. Thus, for many Americans, purchasing a Model T petroleum car over an electric car became an act of popular defiance against the rich, powerful, and corrupt transportation tycoons who were attempting to control the people's freedom of choice and movement.

In 1914, however, Ford saw the light, so to speak, and joined his lifelong idol Thomas Edison in a project to replace gas-driven internal combustion machines with cheap electric cars powered by revolutionary lightweight nickel batteries that could power a car or truck about 75 miles on a single charge and last for 40,000 miles--which could be the life of the vehicle in those days. Ford and Edison envisioned that all home and automotive energy would eventually be generated by wind-powered backyard and basement generators. Together, the two men invested years and millions of dollars to perfect a new generation of battery-run vehicles and to create a national infrastructure of charging stations and even curbside charging hydrants--remember, this was before gas stations were even invented. Their creative research and planning coalesced in 1914, when they were ready to launch mass production. America once again stood at the crossroads. Would we drive vehicles powered by electricity or oil?


Obviously oil triumphed. What happened?

The Ford-Edison electric vehicle was mysteriously subverted by an inexplicable and suspect series of events. Edison's batteries worked perfectly in Orange, New Jersey when Edison shipped them--yet when they were tested at Ford's facilities in Detroit, they inexplicably failed to work. Before Edison could recover, his laboratory and facilities were struck by a mysterious flash fire that burned everything. Ford eventually abandoned the project. The story is heart-breaking. I call 1914 the beginning of the end of clean electric in this country.


Yet at the time, much of America's mass transit ran on electricity. What happened to those systems?

In the 1930s and '40s, General Motors, the Firestone Tire Company, Mack Truck, Phillips Petroleum, and Standard Oil of California--all operating through a front company called National City Lines (NCL)--bought up dozens of local mass-transit systems that were operating the popular electric streetcars. Their plan was to control virtually all the leading mass-transit systems in America, and replace electric trolleys with smoky, gas-guzzling buses. In many cases, these trolley transit companies had previously been financially looted by their financier owners and fallen into disrepair, which only made them easier targets for acquisition. Once NCL purchased the trolley lines with "borrowed" money from GM and others, the tracks were torn up and the trolleys sold or destroyed, replaced by petroleum-powered GM buses running on tires and oil supplied by the NCL companies.

NCL started with small cities in Illinois and Texas. Within several years, the company managed to devastate or destroy the trolley systems in some 40 cities, including Baltimore, Tampa, Los Angeles, Oakland, and Salt Lake City. Then, in the years that followed, the badly managed NCL bus companies disappeared as well, leaving no mass transit and, in many cases, no alternative means of transportation other than individual automobiles.


How could such a scam go undetected for so long?

GM and its conspirators operated through National City Lines and numerous other Enronesque subsidiaries and affiliates, substantially under the radar. Yet once the NCL conspirators seized a transit system, so many citizens complained that ultimately the FBI launched a massive nationwide investigation to connect the dots. It began October 2, 1946 when the Department of Justice sent a memo to J. Edgar Hoover regarding "numerous complaints concerning the activities of National City Lines, Inc., and various associated companies in connection with the acquisition and operation of local transit systems acquired by those companies in various cities throughout the country. Through a series of contracts, manufacturers of buses, tires, and petroleum products have become important stockholders in the National City Lines. Investigation of the complaints disclosed the probable existence of a systematic campaign by National City Lines, acting with its manufacturing stockholders, to secure control over local transportation systems in various cities." The Justice Department memo continued: "It appears that National City Lines and its manufacturing associates have entered into a plan to secure control over local transportation systems in important cities of the United States.... One result of the plan for integrated control over local transportation has been the elimination of electric railway cars in city transportation controlled by these companies."


Then what happened?

FBI agents in blue suits fanned out across America interviewing executives, transit experts, community leaders, and local officials. Subpoenas for masses of documents were served. On April 9, 1947, NCL, GM, Mack Truck, Firestone, Phillips Petroleum, Standard Oil of California, and a group of their key executives were indicted by a federal grand jury for conspiracy to monopolize. Count 1 alleged a conspiracy to control mass transit through systematic acquisition and in so doing exclude all competition for motor buses, including electric trolleys. Count 2 alleged a "conspiracy to monopolize" the bus business by creating a network of transit companies that were forbidden to "use products other than the products sold by supplier defendants." This was a first-of-its-kind prosecution--the first antitrust action against companies that were using exclusivity contracts and "required purchase" contracts in another industry, effectively creating a monopoly. All of the defendants were found not guilty on the first count, and guilty on the second. On April 1, 1949 the judge handed down his sentence: a mere $5,000 fine to each corporate defendant, except Standard Oil, which was fined $1,000. As for the individual co-conspirators, they too were fined. Each was ordered to pay "one dollar." The conviction withstood appeals all the way to the Supreme Court.

By the time of the guilty verdict, GM, Firestone Tires, Mack Truck, Phillips Petroleum, and Standard Oil had succeeded in irrevocably changing mass transit in America--42 cities in 16 states were converted from trolley to motor bus--a trend that ultimately converted our country from clean, electric transportation systems to polluting petroleum-powered buses. America has never recovered.


In your book you also point to the business connections of GM and Germany during the Hitler years.

Yes. At the same time that GM was involved in undermining electric mass transit in America, the company built trucks and other military vehicles which Nazi Germany used to launch World War II, beginning with its 1939 blitzkrieg invasion of Poland. GM's direct involvement with the Reich continued until the U.S. entered the war in 1941. GM and Standard Oil of New Jersey also collaborated with the German company I.G. Farben to produce tetraethyl lead, a fuel additive which became indispensable both for Blitz trucks as well as the JU-88 bombers that were later manufactured in GM's German plants to rain devastation upon the civilian populations throughout Europe. When a stockholder complained about the alliance with Nazi Germany, GM president Alfred Sloan defended the business, calling the profits "outstanding."


Henry Ford's anti-semitism is well known, but GM's executives seem to have escaped this legacy.

True, even though GM portrayed Hitler as a hero. For example, in the June 1934 edition of its official company publication, "General Motors World," the automaker praised der Führer as a visionary lover of children. Overseeing GM's German operation was James D. Mooney, president of the General Motors Overseas Corporation. Mooney had learned early on to pump his arm diagonally, palm outstretched, in the Hitler salute. On one occasion, in 1934, Mooney practiced his Heil Hitler salute in a mirror to get it just right before an important meeting with der Führer in Hitler's Chancellery office. We know this from Mooney's own papers. Mooney eventually received the Merit Cross with Eagle (Germany's second highest honor) for invaluable assistance to the Reich.

A generation later in 1974, a Congressional report condemned GM and Ford for assisting the Nazis while undermining American mass transit: "Given the dominant structural positions of GM and Ford in the war economies of both America and Germany, these firms had the power to influence the course of World War II. They could determine, for example, which belligerent would benefit from their latest advances in war-related technology.... In any event, due to their concentrated economic power in both economies, they were able to shape the conflict to their own private corporate advantage. Whether in fact their profit-maximization determinations were also in the best interests of international peace, or, more specifically, in accord with the national security objectives of the United States at that time, is entirely unclear." GM would later launch a successful vilification campaign directed at Bradford Snell, who authored the report, calling it "totally misleading" and "slander."


Given this history and our technological advances, should we be weaning ourselves from oil, especially with the high cost at the pump?

The cost consumers pay for a gallon of gas is only part of the story. The U.S. Defense Department alone allocates $55 billion to $96.3 billion annually to safeguarding petroleum supplies, two-thirds of which are pumped from the Persian Gulf. Annual tax incentives and government programs supporting oil are estimated to be somewhere between $38 and $114.6 billion, and the U.S. 2005 energy legislation extended $8 billion in additional tax incentives to oil producers, despite the industry's record multibillion-dollar profits. And the social, environmental, and health consequences of oil--including the death and dismemberment arising from America's military presence in the Middle East to protect the oil flow--are staggering and admittedly incalculable costs.


The government, American auto companies, and some in the oil industry have been advocating ethanol made from corn as an alternative fuel. Is this a good idea?

Bad idea--corn ethanol is America's next big fuel mistake. At first blush, ethanol from corn appears to be a solution from America's heartland, a win-win proposition in the struggle to free the world from harmful hydrocarbons and dependence on foreign oil. But American ethanol actually depends upon the continued use of petroleum. And when you factor in ethanol's production and distribution costs, many experts say ethanol actually uses more petroleum than it saves. For example, a key series of studies conducted by Tad Patzek, a University of California geoengineer, and David Pimentel, a Cornell University expert in sustainable agriculture, found that "it takes 1.29 gallons of petroleum or petroleum equivalents to produce one gallon of ethanol." According to these experts, even proposed alternative ethanol cellulosic sources, such as switchgrass, wood, and straw, "require 50 percent more fossil energy than the ethanol fuel produced." Unfortunately, the ethanol industry has effectively tried to silence its critics, especially since its lobby--remember those key Iowa presidential caucuses and Iowa is one of the key corn states--enjoys so many allies in Congress. Pimentel says that ever since he and Patzek reported on their finding, they have been subject to a vilification campaign by ethanol industry lobbyists.

What's more, the price of gas is inflated. U.S. cars currently run on gasoline that is generally 5-10 percent ethanol and our tax dollars pay for an amazing 51-cent-per-gallon government subsidy to the oil companies for every gallon of ethanol used.


And yet, GM and Ford are rushing more "Flex-Fuel" cars to market?

Correct. From a PR point of view, introducing cars that can run on a combination of fuels from gasoline to homegrown ethanol appears like a dynamic move toward energy independence. Ford has already sold 1.6 million such Flex-Fuel cars and trucks, and it's estimated that by the end of 2006 another 250,000 vehicles will be sold. GM is aggressively marketing E85 (85 percent ethanol) for its Chevrolet Avalanche. But the fact remains that every gallon of American corn ethanol consumed requires the consumption of more petroleum to produce and transport it. That is no way to break our addiction to oil and gain true energy independence.


What about the foreign carmakers?

Alternative fuel leaders such as Honda, BMW, and Toyota have refused to jump on the ethanol bandwagon. They know that corn ethanol is not so much an alternative as it is a petroleum adjunct merely backed by a strong lobbying and advertising campaign--big corn and big oil getting together at the expense of America's future.


But isn't using corn ethanol in our gas tanks a more environmentally friendly alternative to petroleum?

That's what the ethanol lobby wants us to believe. In fact, the production of corn ethanol is contributing to global warming because much of it is produced in plants that run on coal. For example, the Gold-Eagle Cooperative of Iowa is now burning 300 tons of coal daily--three railroad carloads--to produce 150,000 gallons of ethanol a day. I asked the company if the coal was mined by traditional smoke-spewing, heavy, diesel-thirsty coalmining equipment, then transported by diesel trains, and offloaded and processed by any number of greenhouse-inducing diesel processes. The company spokesman answered, "I guess it is."


Is all ethanol use environmentally harmful?

Not at all. Some ethanol products offer a perfect balance of environmental safety and oil independence. In fact, ethanol is achieving genuine green independence for Brazil. But Brazilian ethanol comes from sugarcane, which American soil cannot grow in cheap abundance. Most importantly, ethanol refineries in Brazil are driven not by coal or hydrocarbons but by a non-polluting sugarcane-stem byproduct called "bagasse." Hence, Brazilian ethanol, which packs eight times the energy of a gallon of corn ethanol, is genuinely renewable and sustainable. Flex Fuel vehicles manufactured by Ford and GM for the Brazilian market can run on E100--that is, 100 percent ethanol. Today, more than 28 percent of all Brazilian vehicles operate on 100 percent sugarcane ethanol.


If we can't grow sugarcane ethanol, shouldn't we import it from Brazil?

Of course. But American importation of Brazilian ethanol is obstructed by a 54-cent-per-gallon tariff, which is effectively keeping this energy solution out of the country in any great quantity. If our government were to truly put environmental concerns before corporate oil and corporate agriculture interests, it would eliminate the subsidy for American corn ethanol and lift the import penalty on Brazilian sugar ethanol.


Is America in danger of running out of oil before we find an affordable replacement?

Oil reserves are expected to last from 15 to 30 years, but much depends on the voracious usage in China, India, and other emerging economies. However, oil reserves are hardly as important as oil refinery capacity. If hurricanes or terrorism damage our refining capacity, we can swim in a sea of oil that won't drive an automobile. Moreover, if the price of the remaining oil is vastly escalated, it will simply become a punitive expense, out of reach or economically crippling. As non-Gulf sources deplete, the day is coming when most of the world's remaining oil comes from the Persian Gulf. Petropolitics is the most dangerous aspect of all future oil. That is why America must break its addiction to oil now.


So what's the answer?

The answer is hydrogen--everywhere abundant, and it can be produced in our back yards in small, inexpensive boxes.


How soon can we harness hydrogen?

Within three to four years, Honda and BMW are both planning to roll out production models of hydrogen-fueled vehicles. Honda's FX hydrogen vehicle comes with a home refueling dispenser that creates the hydrogen and also powers the entire house. Say goodbye to gas stations and electric company bills. Understand, these vehicles exist today. I have driven them and they are slick. While Honda uses a hydrogen fuel cell, which creates electric energy from hydrogen gas without internal combustion, BMW utilizes liquid hydrogen to drive its fuel cell; its vehicles can be refueled from public hydrogen pumps. Both GM and Ford have developed experimental hydrogen cars, but they are jolting, sluggish. I have driven them as well and consider them technologic tokenism.


How much will hydrogen vehicles cost?

Senior sources at Honda have told me that the cost will be "affordable" for the average person.


What does the future hold?

Within a few years, hydrogen will be able to power our homes and factories, and fuel our vehicles. Our government has adopted a so-called "Hydrogen Road Map" to a full hydrogen economy. The technology is available today. But the government and commercial interests are arranging for this hydrogen to come online in about a decade--thereby allowing the oil companies to squeeze every last drop out of their Mideast oil supplies, regardless of the political or economic price, wealth transfer, or terrorist potential.


Can GM and Ford compete?

GM is staving off bankruptcy now; Ford is not far from that. Both companies are hoping that corn ethanol can save their gas guzzlers. It won't. It can't. But remember, this is a problem that GM and other big U.S. automakers consciously created when, after the 1973 oil shock, they aggressively marketed massive, fuel-inefficient vehicles, from Ford's Navigator to GM's Hummers and Cadillac Esplanades.


Will Israel be safer if the world is no longer so dependent on Arab oil?

Not just Israel, but the world as a whole will be a safer place. The sooner we stop the transfer of Western wealth to Arab and Islamic states that fund terrorism, the better for everyone. As for Israel, the sooner we can neutralize the power of the oil weapon, the less likely we are to see European and American acquiescence to Arab demands at Israel's expense. We witnessed this in 1973 when President Nixon initially held back weapons during the Yom Kippur War.


What does America have to do to achieve energy independence?

We don't need to reinvent the wheel, but to distribute the wheel. In other words, we already have the knowledge to harness hydrogen; now we need to ramp it up and apply it. A good analogy is the Manhattan Project, which ramped up and applied existing nuclear knowledge more than it developed new knowledge.

As for cost, the true numbers are more feasible than nearly anyone imagines. Total expenditures for the original Manhattan Project were about $1.89 billion in World War II dollars spent over four years--or about $20 billion in 2005 dollars.


How realistic is such an expenditure?

It simply requires national will and a national priority. Take, for another example, the Apollo program to land a man on the moon. Apollo totaled nearly $20 billion, or about $135 billion in 2005 dollars.


What else can the government do to reduce oil consumption?

Our government needs to restrict gas-guzzling vehicles in the same way it discourages cigarette smoking--with high taxes, limited use restrictions, label warnings, and advertising bans. Cities with high pollution should do as central London has done--ban or restrict vehicles or at least hyper-tax gas guzzlers. Create a punitive carbon tax. Set a positive example by encouraging the depiction of environmentally friendly rather than gas-guzzling cars in movies and TV, the same way cigarette use and stereotypical imagery have been discouraged in the media. Launch disincentives against GM, Ford, and other low-efficiency vehicle makers. At the same time, offer tax incentives for high-fuel efficiency and alternative-fuel vehicle manufacturing and adoption.

In addition, government and industry with fleets can pave the way to energy independence by being the first to adopt widespread use of pure electric, hydrogen, and other alternative-fuel cars. Doing so would bring down the cost for everyone. The federal fleet alone is 600,000 vehicles strong. Government purchases alone could spur the rapid adoption of alternative-fuel vehicles.


And what can we as individuals do to free our nation from this addiction?

First and foremost, I believe we need to get serious and stop allowing ourselves to be deceived and manipulated by special interests, oil companies, and politicians. Today, energy interests are using such catch phrases as "environmentally friendly," "hybrid," and "alternative fuel" the way food companies used "fat-free" and "low-fat" a few years ago, but made us no thinner.

Second, drive smarter. While hybrids are an improvement over standard internal combustion engines, they nevertheless prolong petroleum use and delay real progress, by which I mean mass production of hydrogen-powered vehicles. Until they're available, we're better off switching to bridge technologies, such as compressed natural-gas cars, which serve as a bridge between the existing technology and the target technology--hydrogen. Bridge technology vehicles are available now from Honda and come with home-fueling stations as easy to install as a gas grill. While compressed gas--a climate-killing hydrocarbon--is not good for the environment, the compressed gas automobiles don't contain petroleum and thereby can begin to wean us from our oil dependence.

Third, when there is a movement to ship green, we can choose the shipper that is leaving the smallest petroleum footprint. Today in America, the three largest fleets are UPS, Federal Express, and the United States Post Office. That could create an immediate fleet decision in the marketplace.

Many solutions are available to us if we resolve together to put an end to our addiction to oil. But we must act.


Judaism & the Environment:

Taking Action


I. Jewish Teachings

* "God placed the human in the Garden of Eden, l'ovdah (to serve/till) u'l'shomrah (and to guard/tend it)" (Gen. 2:15).

* God spoke to Adam: "See my works, how fine and excellent they are! Now all that I created, for you I created. Think upon this, and do not corrupt and desolate my world; for if you corrupt it, there is no one to set it right after you" (Ecclesiastes Rabbah 7:28).


II. Reform Jews Speak Out

* "The U.S. holds 2% of the world's population, yet we are among the world's top producers of harmful carbon dioxide emissions that are causing climate change. If we are to heed God's warning, 'If you spoil [my world], there is no one after you to repair it,' we must recognize the immediate dangers posed by our consumption of oil and the corresponding impact of climate change (including global warming)--the issue understood by the Reform Movement to be the most serious environmental threat facing our planet today." --Judge David Davidson, URJ Board of Trustees, responding to President George Bush's 2006 State of the Union Address

* "Virtually all the cars the American auto industry is manufacturing are poisoning the air, warming the planet, punishing the poor, weakening America's security by dependency on foreign oil, jeopardizing the future of our children.... just plain violating our covenant with our Creator. All of us who drive these cars are implicated as well. But the choices we are being given are largely coming from Detroit. Some are good--and improving--but a lot of them are lousy. SUVs particularly are blowing second-hand smoke into the lungs of God's creation and contribute disproportionately to our nation's environmental and health problems. Indeed, transportation is the largest single source of global warming emissions in our country and the second largest in air pollution. Global warming has already caused changes in precipitation patterns, warming in oceans, and Arctic ice thinning. The scientific consensus is that, if not reversed, these global changes will endanger coastal areas, disrupt agriculture, increase drought and desertification, and lead to spreading diseases.... These problems cannot be addressed without the auto industry.... Raising fuel efficiency and building cleaner cars can save lives, benefit consumers, improve America's health, strengthen our economy, help ensure our national security and protect future generations. The problem is not the technological capacity to achieve these goals; it is the moral commitment to reach them. The technology exists to build cars that reflect our values--that protect our children, our environment, our freedom, and our future. But you have to use it."--Rabbi David Saperstein, director, Religious Action Center of Reform Judaism, at the Driven by Values--A Clean Car Campaign Press Conference, Detroit, November 20, 2002

* The 1998 Central Conference of American Rabbis (CCAR) resolution, "Confronting the Challenge of Climate Change," calls on the federal government to sign binding international agreements to minimize climate change and calls upon the Jewish community to conduct energy audits of private homes and communal facilities. The 2000 CCAR resolution, "National Energy Policy," calls (among other things) on Congress and the Administration to phase out all subsidies for coal, oil, and nuclear industries and encourage the development of alternative energy sources.

* In 2001, the URJ adopted a policy opposing drilling in the Arctic Refuge: "We believe that our nation's energy needs can be better met through energy efficiency, conservation, and the development of alternative energy sources... increasing fuel-efficiency standards for new passenger vehicles could save significantly more oil than the likely yield from the coastal plain."


III. Taking Action

* Make use of the Religious Action Center's A Climate Change Resource Page, which includes discussion questions about the movie An Inconvenient Truth, text studies, sample sermons, programming suggestions, and ways to take action to fight climate change.

* Join the RAC in the "Virtual March to Stop Global Warming".

* Use the Stop Global Warming's "Carbon Calculator" to determine your carbon dioxide output and learn ways to reduce emissions.

* Consult the Coalition on the Environment and Jewish Life (COEJL) for resources on climate change, other environmental issues, and holiday guides as well as links to individual COEJL chapters working on local environmental issues.

* For more information contact the RAC at 202-387-2800 or visit http://rac.org.

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