On one hand energy independence would allow us to treat the Middle East like we do Africa. On the other hand, an I am not an economist so bear with me, we have the Law of Comparative Advantage which says its better for everyone if we all concentrate on what we do well. So, is U.S. energy independence an unqualified Good Thing? Is it a relative Good Thing? Or is it a bad idea championed by people who haven’t thought it through?
Thanks,
Rob
Well, Nigeria is energy independent, and Singapore imports all its energy needs. Which country is better off economically?
Well, Singapore, but energy independence or lack thereoff isn’t the reason.
Right – my point being that energy independence is only one factor among many in economic well-being.
Doesn’t Nigeria import gasoline? It is my understanding that there are no energy independent countries.
FWIW,
Rob
I think energy independence will become much more important down the road, but right now it’s just one factor in multifaceted economies.
For the US, it would be a good thing, on one hand, because it would pretty much by definition mean that we’ve at least begun to address our excessive consumption habits (I don’t think we’re going to suddenly discover vast new oil deposits here). I don’t necessarily think that it would mean that we would be able to thumb our nose at Arab countries, either, as they’re already sitting on tremendous amounts of the money they’ve already made, and could continue to be a factor whether we are buying oil from them or not. Also, not buying oil from them may cause even worse instability in the region, for all we know. (I know those seem like conflicting statements, but I’m trying to illustrate how we really don’t know what will happen)
However, it’s a complicated subject, and you rarely get an equal and opposite reaction out of every action. The law of unintended consequences also comes into play.
Good thing. The oil won’t last forever, it can be used for other things than burning anyway, being dependent on nations and people who hate you is foolish, and importing oil from far away itself takes up energy and resources.
We’ve been messing around in the Middle East for a hundred years (or thereabouts) trying to ensure a steady supply of oil, but I don’t know if that messing around has made things better or worse. Maybe it’s a false premise that we need to police that area, especially in the manner that we have been doing.
Otherwise, it will only be better of us to be energy independent if our new source of energy is cheaper and burns cleaner.
If the U.S. were energy independent, we could get by with a much smaller military budget. That would be a Good Thing.
Actually, we’ll probably always have some oil. It’ll just get a whole lot more expensive. The arguments aren’t really about whether we’ll have oil or not - they’re about whether we’ll have cheap oil or not.
An Arky: Your comment on vast new supplies of oil (or not being likely to find them) is a good one. The key there is vast. We’re using oil now at the rate of over 20 million barrels each day. That means we need 100 million barrels of oil every 5 days, and 1 billion barrels every 50 days. What always amazes me is that people cry about the oil in the Alaska National Wildlife Refuge - “It’s a 10 billion barrel pool of oil! It’ll save us!” 10 billion barrels is less than 500 days at our current rate of consumption. We should charge into this wilderness area for 18 months additional supply? Doesn’t make a lot of sense to me.
Well, sad to say that both you and Der Trihs are wrong about that. Not that I think we’ll ever use it, but there ARE vast reserves of oil in the US and Canada (in the form of shale oil and tar sands)…deposits that make all of the ME look like small potatoes. Yeah, they will be more expensive to extract…but they are there if we need them. Trillions of barrels worth.
I think it unlikely we ever tap those reserves fully…but not because they won’t be viable economically. I simply think that the social pressure to stop using hydrocarbon based energy will eventually force the market to new alternatives (or perhaps to use crude oil in new ways…like, say, as an abundant source of hydrogen).
That said, I’m not seeing a down side to the US being energy independent to be honest. I don’t think we WILL be, at least not any time soon…but I really don’t see a down side too it.
-XT
I still say that the US shoulod change all vehicles to diesel and commit to making biodiesel the legal fuel. That would save the oil for other uses such as lubrication and other less demanding uses. It would also aid the recycling process as it would give us something to do with all the used fry oil, soybeans and other renewable sources of oils. Cutting our dependences down is just a grand side effect.
And where are we going to get the unused land to grow the plants to make biodiesel out of ? And what will be the ecological effect of ripping up and destroying that much biomass, year after year? At least food ends up back in the ecosystem, instead of as smoke. We don’t need to add to the stress we are putting on the ecosystem.
My estimate is that the most logical source of future energy is nuclear; as for fuel, it’ll be either batteries, hydrogen, or some synthetic.
Additionally, would it be worth it to use ALL the oil? Let’s assume that the oil is pretty much out of the Middle East and that Africa is still as it is. Do we want to get to that point where pretty much all the oil is gone? It seems that you’d want to save some, even if it is the most expensive to get to, as a big emergency plan.
Saving some for use later has been one of the guiding principles of US oil development policy since the early 1900s. Basically develop overseas sources and keep the local oil industry ticking over, but keep conservation of local reserves in mind for a rainy day when the rest of the world runs out.
That said the US is still the one of the worlds largest producers of crude.
You can’t truly use it all - Ever. The “Peak Oil” reports always confuse me because, as noted, Canada has an absolutely mind-boggling supply of oil sitting right there in the Alberta Tar Sands and the infrastructure needed to tap it is being built now and the price of other sources of oil goes up to the point where tapping it is economically viable. Venezuela has roughly the same thing and both the Gulf of Mexico and Alaska are no slackers in oil reserves as well. If you ignore those, the U.S. has so much coal it is laughable and coal can be made into any petroleum product with established technology. Various estimates put the U.S. supply of coal anywhere from 200 years to well over 1000 years even with increasing demand. Now, all of this probably isn’t that great for the environment but we are not even close to using up the world’s petroleum reserves even based on what we have in hand this second and there is likely much more out there.
“the price of other sources of oil goes up to the point where tapping it is economically viable” = “much higher prices at the pump.” Which is sufficient to cripple the American economy. Think about it. Everything that is not made at or near its point of consumption has to be shipped over the highways. If fuel costs more, everything costs more – not in a monetary-inflationary sense, but in terms of real costs no monetary policy can reduce.
Cripple the economy? Slow it down yes, but cripple would be a exaggeration. Current prices are supporting oil shale, oil sand and heavy oil production and these price levels have been around for a few years now, but the economy is not crippled.
Everything in this post is true except that it follows that higher prices at the pump are sufficient to cripple the American economy. How high? The price of gas has tripled in less than ten years and I don’t seen any bread lines. That, of course, is not to say that $200/bbl. oil wouldn’t hurt, especially if it happened suddenly, but I’ll bet that we can probably make synthetic gas for less than that. The problem is, we need mass infrastructure to exist before the price goes up, or we’re in for a lot of pain and we also need investors to believe that the price will stay up or they won’t invest. That is part of the reason our refining capacity is stretched to the limit.
Moving away from foreign oil, fossil fuel dependence, etc. seems like a good idea on the face of it, but I am open to the possibility that there are consequences of that that I am unaware of and maybe someone on this board knows about.
Thanks for your help,
Rob
Extraction and refinement of petroleum is something the U.S. does well. We did it before any other country. We have all the infrastructure for it. We don’t do as much of it as we used to only because oilfields within the U.S. have been largely though not entirely played out (we passed the all-time peak of oil production within the U.S. around 1970, as Hubbert had predicted back in 1956). I’m not an economist either, but I doubt the “Law of Comparative Advantage” applies to that kind of situation.