For an investment manager to attack oil-based energy policies is unusual. For a successful investment manager with ties to the oil industry to do so is very unusual. But for Dick Cheney’s own investment manager to do so is kind of shocking.
The oil-based energy policies usually associated with Vice President Dick Cheney have just come under scathing attack. There’s nothing remarkable about that, of course — except the person doing the attacking.
Step forward, Jeremy Grantham — Cheney’s own investment manager. “What were we thinking?’ Grantham demands in a four-page assault on U.S. energy policy mailed last week to all his clients, including the vice president.
Titled “While America Slept, 1982-2006: A Rant on Oil Dependency, Global Warming, and a Love of Feel-Good Data,” Grantham’s philippic adds up to an extraordinary critique of U.S. energy policy over the past two decades. What Cheney makes of it can only be imagined.
“Successive U.S. administrations have taken little interest in either oil substitution or climate change,” he writes, “and the current one has even seemed to have a vested interest in the idea that the science of climate change is uncertain.”
Yet “there is now nearly universal scientific agreement that fossil fuel use is causing a rise in global temperatures,” he writes. “The U.S. is the only country in which environmental data is steadily attacked in a well-funded campaign of disinformation (funded mainly by one large oil company).”
That would be ExxonMobil, as readers may recall from last week.
Keep in mind, Jeremy Grantham is not exactly a liberal activist. He’s one of the highest-profile investment managers in the country. He’s “the ‘G’ of the world-class GMO money management outfit.” He’s both “sage” and a “guru.” He was a Bush-Cheney supporter. He’s Dick Cheney’s hand-picked investment strategist.
And he now thinks the Bush administration and its conservative allies are screwing up royally.
As for the alleged economic costs of going “green,” Grantham says that industrialized countries with better fuel efficiency have, on average, enjoyed faster economic growth over the past 50 years than the U.S.
Grantham says that other industrialized countries have far better energy productivity than the U.S. The GDP produced per unit of energy in Italy is 50% higher. Fifty percent. Japan: 60%.
And China “already has auto fuel efficiency standards well ahead of the U.S.!” he adds. You’ve probably heard about China’s slow economic growth.
Grantham adds that past U.S. steps in this area, like sulfur dioxide caps adopted by the late President Gerald Ford, have done far more and cost far less than predicted. “Ingenuity sprung out of the woodwork when it was correctly motivated,” he writes.
There is also a political and economic cost to our oil dependency, Grantham notes. Yet America could have eliminated its oil dependency on the Middle East years ago with just a “reasonable set of increased efficiencies.” All it would take is 10% fewer vehicles, each driving 10% fewer miles and getting 50% more miles per gallon. Under that “sensible but still only moderately aggressive policy,” he writes, “not one single barrel would have been needed from the Middle East.” Not one.
It took guts for Grantham to not only state his opinions, but to do so in a four-page letter sent to his very wealthy clients, including Cheney.
My only question: how fast will Cheney fire him?