Energy independence
September 14, 2012 2 Comments
Yglesias nicely explains why all the talk of “energy independence” from both parties is nonsense:
This [North American energy independence], however, won’t work either because the whole idea of energy independence is conceptually bogus. Note on the chart that in the mid-1980s the United States was importing a lot less foreign oil than has been the case recently. That’s the Texas oil boom of Dallas fame plus some of the lingering consequences of the oil shocks of the 1980s. But if you recall, the American consumer was still vulnerable to supply shocks from abroad, and people were still really interested in OPEC decision-making. That’s because oil is something we’ve gotten really good at storing and shipping globally. Under normal circumstances, it makes sense to export Mexican oil to the United States rather than to India since Mexico is close to the United States. But if there’s a huge supply disruption at the locations where Indian oil comes from, then suddenly it makes plenty of sense to export Mexican oil to India. To keep the black stuff flowing to our border, Americans will have to outbid Indian purchasers and the price will rise.
From a consumer viewpoint, the geography of the supply side is totally irrelevant.Lobsters are cheap in Maine because storing and shipping live lobster is hard, but globally traded commodities aren’t like that. The price of gasoline is driven by global supply and demand plus local taxes.
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Eastern Canada gets it’s oil from abroad, while Western Canada supplies oil to the United States. It’s cheaper to bring oil in from around the world then building infrastructure that crosses the continent.
But this doesn’t mean that Canada shouldn’t be able to supply the demand should it be necessary. Energy independence isn’t about not having to depend on your friends, it’s about not having to depend on your enemies to supply your countries energy requirements.
Right now the United States (and Canada) both depend on various African countries and specifically Saudi Arabia oil imports, a country that has been and continues to fund fundamental Islamic schools throughout the world. Schools that teach a hatred of the United States. The majority of the 9/11 hijackers came from Saudi Arabia (no matter what Sara Palin thinks).
Energy independence is a rational goal of any country. They may not be able to achieve it, but they can reduce or replace sources and align geo political goals, including reducing massive outflows of currency or debt to countries that don’t have similar global interests to the US or Canada, such as democracy, basic human rights and not just allowing, but approving of the murder of women and girls for being seen in public with a man.
The United States isn’t shipping billions of dollars of lobsters into the US from nations that hate them and are actively outsourcing hate and keeping their women like cattle. Nor does the United States economy depend so much on lobsters that should it not get enough it would drive it into a recession or depression, or at the very least force millions of Americans to choose between putting lobsters into their car so they can get to work or eating the lobsters so they don’t starve.
Nor have I touched on the ever increasing demand for oil from China and India which will continue to drive up prices and divert sources. China has been purchasing sources of oil and purchasing oil and gas companies all over the world. This diverts sources to China and offsets the increasing costs. This certainly isn’t something the United States would do because of fears of the evil “socialism”. So the United States citizens won’t see any benefits unless they own stock in an oil/gas company.
Energy independence means more then just drilling at home. It means switching as much consumption to alternative sources, such as wind, nuclear and solar and creating a grid of natural gas and electrical charging stations to fuel trucks or trains, subways, buses and consumer automobiles. But to be sure, the United States needs energy independence and a rational energy policy that weans it off of oil and coal and off countries that support global terrorism and ignore basic human rights for it’s citizens. It needs to buy oil from countries that it has true trade with, countries that see it’s citizens also gaining from trade, rather then just a few kings and princes.
Best comment ever.
Yglesias overstates the weight of the economic argument for energy independence and understates the weight of the political, moral and environmental arguments.