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Is Energy Independence Undesirable?
- Jul 7, 2018 12:38 am GMT
According to Mitt Romney, the United States will become energy independent when it no longer imports oil from unfriendly and unstable countries such as Venezuela and Middle Eastern kingdoms; in a Romney presidency we will only import oil from Canada and Mexico. Presumably, that strategy will make the U.S. energy supply more secure.
Romney’s view matches the one expressed by Barack Obama. According to Obama, energy independence is necessary because oil could be used as a “weapon” by “unstable, undemocratic governments.” Independence and energy security will be achieved, Obama says, by a vague “all-of-the-above” energy strategy.
It is undoubtedly true that Canada will not use the “oil weapon,” but then in reality, neither will anyone else. As Roger Stern pointed out in an article in 2006, the “oil weapon” has existed mainly in the minds of Americans since 1973. In fact, the Arab embargo was a fiasco for the Arab exporters who imposed it; the embargo became a crisis in the U.S. because of our own policies, especially price controls that prevented prices from rising to market levels. But that’s clearly not how it is remembered here. Most Americans, like Obama, see the oil “weapon” dangling over our heads, wielded no doubt in the popular imagination by the robed sheikhs of 1970’s lore, or maybe these days by masked jihadists.
But it is an odd notion that the energy supply will be more secure by having fewer sources of supply—by, in fact, deliberately excluding most of the world’s sources. The more a country relies on itself and one or two others, the greater the toll any disruption would cause, the less secure in fact would be that country’s energy supply.
An embargo is certainly not the only possible reason for a market disruption. The oil and gas markets could be affected by natural disasters, such as hurricanes that shut down refineries or earthquakes that damage pipelines. Drought would disrupt biofuel supplies, and all energy markets could be affected by labor conflicts, acts of terror and so on. The key point is that the more limited the sources of supply the larger the impact these sorts of problems (and others) would have on the nation’s ability to meet its energy needs.
Back in the 1970s, when politicians of both parties made energy independence the ostensible goal of policy, officials of the Nixon and Ford administrations tried to decide just what “energy independence” was really supposed to mean. Nearly all experts agreed complete U.S. self-sufficiency was technically and economically impossible, but no one wanted to abandon a politically appealing slogan. Among the many definitions of energy independence, one that stood out. William Simon, Treasury Secretary to both Nixon and Ford, suggested that energy independence meant having diverse sources of supply. The more the better. That was the key to energy security; that way no one country or even a group of countries could disrupt America’s access to oil. In other words, energy self-sufficiency was not only technically and economically infeasible, it was also undesirable, and made us potentially less secure.
Few others bought into Simon’s argument and instead argued for the panacea of U.S. self-sufficiency. But Simon was right. Any deliberate policy that excludes access to foreign oil makes us less secure. Still, we can take some consolation from the Romney/Obama energy independence plans; like all the other such plans (except for William Simon’s), they will remain rhetoric and will likely never be achieved
Image: Oil Tanker via Shutterstock
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