Mitt Romney has vowed to drill the nation's way out of its foreign oil addiction instead of investing in clean fuel technologies—but according to Dan Senor, one of Romney's closest political advisers, that's bad economics.
Senor's 2009 bestseller, "Start-Up Nation: The Story of Israel's Economic Miracle," argues that economies geared toward advancing and adopting new technologies like oil-free cars will transform entire global industries. He says economies focused on traditional oil drilling will continue to generate short-term wealth, but at the cost of innovation.
"You look at some of these countries in the Arab world that are so dependent on oil ... They're being held back by so little innovation in those sectors," Senor said last year in a lecture at the University of Rochester. "The real economic growth is coming in biotech, medical devices, cleantech, greentech, IT."
Senor's argument calls into question the Romney campaign's claim that developing all U.S. carbon energy reserves would spawn an economic resurgence.
Senor (pronounced see-nor), 41, has deep ties in the Republican party and has been advising Romney since 2006. In a recent profile, the New York Times described him as one of the "key people" shaping Romney's views on the Middle East. Last month, he was given a much broader role, as senior adviser to vice presidential hopeful Paul Ryan.
News accounts of Senor almost always mention Start-Up Nation, the pocket-sized book that hypes the Israeli economy as one of the most innovative and resilient on the planet and blames the stagnation of Arab economies on their overdependence on oil. Co-authored with American-Israeli columnist Saul Singer, the book was written, at least partly, to shore up support for Israel at home. Singer is married to Senor's sister, Wendy Senor Singer, director of the Jerusalem office of the American Israel Public Affairs Committee (AIPAC), the powerful pro-Israel lobby.
In propping up Israel, however, the book exposes a glaring irony for Romney and the entire GOP—that Senor's shining example of Israel's economic vitality is the country's commitment to get itself, and the world, off oil through electric cars.
"Is there anything more important?" Israeli President Shimon Peres is quoted as saying in Start-Up Nation.
Electric cars have been slow to take off in the United States, mainly due to their high price tag—the Chevrolet Volt costs about $40,000—and to consumers' fear that the batteries will run out of electricity mid-drive. In 2009, President Obama pledged to put a million plug-in cars on U.S. roads by 2015, but only about 55,000 such vehicles are cruising around today.
During his first presidential run in 2007, Romney said the U.S. needs to invest in electric vehicles and other non-oil alternatives to reduce the country's dependence on oil.
In obvious contrast to Romney and other GOP leaders, Senor's book and recent lectures gush over Better Place, the Palo Alto, Calif.-based startup that is building the world's first network of electric cars in Israel. The firm's Israeli-born founder, software magnate Shai Agassi, is portrayed as the epitome of the moonshot-thinking Israeli entrepreneur.
"I think he has a good shot at changing the world—or at least making it a better place," Senor has said. Neither Senor nor the Romney campaign returned requests seeking comment for this story.
In a telephone interview from Jerusalem, Singer, Senor's co-author and brother-in-law, said, "I'm sure Dan is very supportive of energy independence, and I think electric cars are a big piece of that puzzle." He said he doesn't not know the specifics of Romney's energy plan.
Dan Senor Emerges as Key Emissary to Israel
In a detailed account last month, the Jewish magazine Tablet described Senor's career path, which now straddles the Wall Street-Washington divide, as "itinerant and mostly accidental." It began with an internship on the Hill in the 1990s, where he caught the eye of William Kristol, editor of the conservative magazine, The Weekly Standard. In 2009, the pair started the Foreign Policy Initiative, a think tank, with Robert Kagan, a neoconservative historian.
Prior to that, Senor worked with GOP members of Congress, including U.S. Senator and U.S. Energy Secretary Spencer Abraham under George W. Bush. He earned an M.B.A. from Harvard Business School, founded the private equity firm Rosemont Investment Partners with John Kerry's stepson Chris Heinz and served as chief spokesperson for the Coalition Provisional Authority in Iraq. In 2010, Senor was courted by Republican leaders to run for the New York senate but turned down the offer.
In the past few years, the New York-born and Toronto-raised GOP player has emerged as a critical emissary for Romney to Israeli leadership and to the Jewish-American community, Tablet found. Senor has planned tours of Israel for Romney and other high-profile GOP leaders. Senor reportedly has close ties with Ron Dermer, the U.S.-born chief adviser of Prime Minister Benjamin Netanyahu.
Romney frequently cites Start-Up Nation and recently got himself into trouble at a fundraising event in Jerusalem for distorting its findings. There's a "dramatically stark difference in economic vitality" between Israel and "the areas managed by the Palestinian Authority," Romney told the audience, saying that culture makes "all the difference." The statement sent Senor on damage control on morning TV to clarify what the book says. It largely focuses on the oil-rich Persian Gulf countries and doesn't mention the Palestinian Authority.
Accidental Irony? Senor Hails Israeli Support of Electric Cars
The book marvels at Shai Agassi's ability to overcome range anxiety, one of the biggest obstacles to widespread adoption of electric cars. Recharging an empty battery takes six to nine hours. Agassi's business model solution is to erect not just thousands of home and parking lot chargers, but also to build robotic battery swap stations that can replace a depleted power pack in five minutes or less.
Building cars with switchable batteries also removes another obstacle, the book says: the high cost of going electric.
Under the Better Place system, consumers buy or lease the car, and Better Place owns the battery, which costs about $10,000. Drivers pay to use the power pack, for the electricity and for smart charging software through a mileage plan, bringing down the sticker price. Better Place is offering its drivers 55 agorot (about 14 cents) a kilometer, compared with 64 agorot (about 16 cents) a kilometer for a gas-powered car. Israel gas prices were ranked by Bloomberg last month as the third highest in the world, at $9.28 a gallon.
Better Place is a darling of the Israeli government. Its vision is endorsed by Netanyahu, and especially by Peres, who helped Agassi get his startup and his idea off the ground. The company has raised about $780 million from investors and is trying to build networks in dozens of other regions around the world. "It was important that the government of Israel ... was willing to support it from a regulatory point of view," said Singer, who drives a Better Place car.
"If it succeeds, the global impact of Better Place on economics, politics and the environment might well transcend that of the most important technology companies in the world. And the idea will have spread from Israel throughout the world," Senor and Singer wrote.
Romney Zips Around with Agassi, Pre-Candidacy
Romney is no stranger to Agassi's ideas. In a visit to Israel planned by Senor, a smiling Romney took a test-drive with Agassi in the company's Renault-Nissan Fluence Z.E. (for zero-emissions), the first electric car in the world with a swappable battery.
That was in January 2011, five months before Romney announced his candidacy for president.
Since then he has toed the Republican line on energy, which has grown increasingly resistant to clean energy and clean and efficient vehicles.
In addition to flip-flopping on the need to electrify transportation, Romney now says that higher fuel-economy standards are "disadvantageous for domestic manufacturers." He opposes the Obama administration's new rules that require automakers to get a fleet average of 54.5 miles per gallon by 2025, which the White House says would help cut oil use by about 2 million barrels a day. Ironically, Romney's father, the late George Romney, a renowned former president of the American Motors Corp. and governor of Michigan, was seen as the "father of American fuel-efficient cars," in the late 1950s, E&E News reported last year.
Romney has vowed to end most federal government spending on clean technology research, including loan guarantees, cash grants and tax incentives. "Government has a role to play in innovation in the energy industry. ... However, we should not be in the business of steering investment toward particular politically favored approaches," says the Romney energy platform. (To jumpstart electric cars in Israel, the government charges an 8 percent import tax on the vehicles, compared to 83 percent for conventional cars.)
Romney's latest energy white paper, drafted in consultation with oil industry executives, says he would target North American energy independence by 2020 and rev up the economy by bringing more Canadian oil sands into the United States and by increasing domestic drilling.
Reliance on oil as an economic engine doesn't quite jibe with Senor's thesis. In the book, and in a follow-up paper called, "What's Next for Start-Up Nation?" Senor and Singer prop up Silicon Valley—the world's leading innovation hub—as the bright spot of the U.S. economy.
Oil Versus Innovation
Senor and Singer credit Agassi's drive—and Israel's "economic miracle"—to a number of factors, including an entrepreneurial culture, a risk-taking mindset and a strong military contribution to the technology scene.
The authors contrast that with the Arab world, which the book calls "chronically underdeveloped."
A leading critique of those countries is their dependence on traditional sectors, especially on oil, which stymies entrepreneurship. "Neither oil nor real estate clusters have built a high-growth entrepreneurial or innovation economy,"the book says.
Despite Start-Up Nation's conclusions, there's no plugging of clean vehicles or other green technologies by Senor, or by anyone on the Romney stump these days. But not everyone is concerned. Elon Musk, the chief executive of electric car company Tesla Motors, recently told reporters that he doesn't believe Romney is "really against" electric cars, though he "may not be as for them as, say, President Obama is."
"Romney would have a minor impact," Musk said. "There's such momentum behind electric vehicles."
InsideClimate News reporter Maria Gallucci contributed to this report.