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The recent power outages that crippled cities throughout the Northeast came with a hefty pricetag – and a warning. City officials in New York have estimated that the blackout cost their city just over $1 billion, or $36 million for every hour without electricity. As a nation, however, we will be paying a much higher price if we fail to heed the lessons of the massive power failure. Our overwhelming dependence on a few energy sources puts our economy in an increasingly vulnerable position, and now, more than ever, we must take steps to reduce our reliance on potentially unreliable energy supplies.

Two years ago, Senator Charles Schumer of New York and I released a report by energy experts highlighting the risks to consumers of our vulnerable energy supplies. The report showed that, unless we do more to reduce consumption and increase and diversify our energy supplies, consumers could see a doubling of oil prices, a quadrupling of natural gas prices, and painful spikes in electricity prices within ten years.

The report was made public several months before September 11, and its predictions, dire as they were, did not take into account the vulnerability of America's energy supplies and infrastructure to terrorist attacks. In addition to price increases resulting from the imbalance between supply and demand, we now have to face the possibility of concerted terrorist attacks on pipelines, generating stations, transmission lines, and other components of our energy infrastructure. Clearly, we must reexamine potential vulnerabilities in that infrastructure and do what we can to increase security. However, we cannot stop there.

The United States imports 56 percent of its oil. By 2020, that dependance on foreign oil could rise to 70 percent, and most of the world's oil exports will come from the volatile Persian Gulf nations. The risks of becoming so dependent not just on foreign oil, but also on such an unstable part of the world are apparent. Our response to the terrorist attacks must therefore include a commitment to decreasing our reliance on foreign oil and diversifying our energy supplies.

Perhaps our best opportunity to reduce our reliance on foreign oil is to improve energy efficiency. According to one scientist who testified before the Senate Government Affairs Committee, of which I am chairman, the United States could cut reliance on foreign oil by more than 50 percent by increasing energy efficiency by 2.2 percent per year. We have an impressive record of increasing energy efficiency when we put our minds to it: following the 1979 OPEC energy shock, the United States increased its energy efficiency by 3.2 percent per year for several years. With today's improvements in technology, the 2.2-percent goal should be attainable.

We should also do more to diversify our energy supplies. According to an analysis prepared by the Department of Energy, if only 10 percent of the gasoline in American cars were replaced with alternative fuels, the price of oil would fall by $3 dollars per barrel and Americans would save over $20 billion dollars a year, in addition to greatly improving our energy security.

We must also build into our energy system an increased ability to withstand disruptions. Parts of our energy infrastructure are already strained to capacity. What would happen if terrorists were to strike transmission lines that barely suffice to get the job done now? Improvements in technology, such as the carbon fiber transmission lines that one Maine company, Applied Thermal Sciences, is developing, would allow upwards of three times as much electricity to travel over the same lines. If one set of lines were knocked down, this new technology might allow other lines to make up the difference.

Another way to build increased capacity into our electricity system is to encourage distributed generation. A report by the Maine Public Utilities Commission showed that streamlining interconnection standards is one way to accomplish this objective. By increasing the number and diversity of our generating sources, as well as by moving them closer to the site of consumption, we reduce the risk of widespread disruptions to our power supply.

The recent Northeastern power crisis demonstrated the potential for catastrophe that a disruption in our energy supply poses, and in the post-September 11th world, our vulnerability becomes all the more evident. We must become more self-sufficient, create a more reliable and secure infrastructure, and diversify our sources, in ways that entail acceptable costs. And we must pursue those goals without delay, before a real disaster strikes.