The Myths of Energy Independence

What did you think energy independence would bring? Elimination of terrorism, a more secure energy supply, growth of new industries developing alternative fuels, bankruptcy for disagreeable countries (Iran, Venezuela, etc.), reform in the Muslim world, anything else?

If those are your thoughts you ought to click on to a well-researched website at http://instituteforenergyresearch.org/ and read a recent article by Robert Bryce. First, the Institute for Energy Research is a public policy research group that applies free market principles to the complex issues surrounding energy. It refuses to accept government funds for any of its research and thus avoids the inevitable taint of “government think.” I suspect, but do not know for certain, that it does accept contributions from the petroleum industry and, therefore, for those of you who are eternally dedicated to “conspiracy theories” you may want to stop now and take in a Michael Moore or Oliver Stone movie instead.
Bryce’s article seeks to dispel the “myths” about some of the benefits from energy independence. In doing so he brings forward some accurate reflections on the state of the world and the global economy but often fails to acknowledge “a” benefit simply because it not “the” benefit everyone thought it would be.

For instance, in countering those who think that energy independence will reduce or eliminate terrorism, he reminds us that terrorism existed long before the “oil era” and that the United States gets the majority of its oil from Mexico and Canada, hardly strongholds of terrorism. All true but he fails to note the effect of the oil cartel dominated by countries like Iran, Saudi Arabia and Venezuela. By applying monopoly-pricing practices, these countries have driven the price of oil from the twenty-dollar per barrel to nearly one hundred dollar per barrel with virtually no attendant increase in the cost of production. Those additional dollars of pure profit have allowed rogue countries and regimes to engage in both economic and actual terrorism. Given that the United States is the major consumer of oil in the world, the removal of our demand on global resources would severely dampen the ability of the oil cartel to command the current prices and profits.

Similarly Bryce seeks to debunk the notion that energy independence will “bankrupt” regimes in Muslim countries and thus cause long awaited economic and political reform. He notes that when the price of oil dropped from the twenty dollar per barrel range in the latter part of the 20th century to eleven dollars per barrel in 1998, no economic or political reforms began in the Middle East. In fact, it was during that period of time that Osama Bin Laden and al Qaida were on the ascendancy. The radical Islamic fundamentalism has found its fertile soil in the vast poverty of the Middle East, not in the middle or upper economic strata. The economic collapse of most of the Middle East despots would go largely unnoticed by the general population who are already dirt poor and will remain so whether burdened by the sultans or the terrorists. However, Bryce seems to ignore the policy alternatives to the United States if we are not worried by the impact of action on our own oil supply.

Even in the area where Bryce is closest to the truth, there is a myopic view. Bryce dispels the notion that a big push for alternative fuels will break our oil addiction. His arguments center on the so-called “bio-fuels” alternative and notes that while some forms exist in theory rather than practice, others have taken decades to reach the stage of a “minor contribution” to the countries energy needs — ethanol being chief among them. He correctly notes that it has taken twenty-five years for the corn ethanol industry to reach a production capacity of five billion gallons — five billion gallons to replace 200 billion gallons of oil being imported annually. The likelihood that soybeans or other cellulose producing plants can add one hundred ninety-five billion gallons to the nation’s pipelines in the next five, ten or even twenty-five years is ridiculous.

However, energy independence does mean we have to rely solely on alternative energies — vast corn fields destined for ethanol, or landscapes dotted with those atrocious and malfunctioning windmills. The use of nuclear power stands the best chance for a rapid increase in energy independence with the lowest impact on the environment. Couple that with increased coal production (we have more coal reserves in Montana and Wyoming than the Saudi peninsula has oil), the opening of ANWAR and offshore drilling, and the increased use of methane gas found in and around the nation’s coal fields will all help to reach a point of relative energy independence.

The strength of Bryce’s article is the debunking of myths surrounding energy independence in light of global market forces. The weakness in his arguments is assuming that market forces are all that goes into making decision regarding the nation’s security and future.