Reply #25: Who Cares? Energy independence is a silly goal. [View All]

[troublemaker]

I cannot see what's desirable about energy independence. I manage to get through the day okay even though we don't manufacture hardly any TV sets in the US. We import shoes, computers, cell phones... all sorts of things were think we need.

Energy Independence is only a meaningful concept if someone thinks the entire world will impose a global oil trade sanction on the US. The danger is having oil prices raised, not having oil supplies cut-off "at any price." There will always be willing sellers at *some* price. Would 'independence' make energy any cheaper? If not, who cares? We are, after all, talking about money.

Say a $20/barrel surcharge was stuck on all US imports. And say that we can cover exactly 50% of our needs domestically. So what would the difference be between a barrel from Texas and a barrel from Venezuela? Probably nothing! We would be buying countless millions of barrels with the $20 surcharge tacked on, thereby demonstrating that when push comes to shove we are willing to pay $20 more/barrel. So why would an oil company price a Texas barrel at $20 below the going rate?

Looked at another way, there's plenty of oil in the US that we don't get out of the ground because it's too expensive to get at it. It's too deep, not concentrated enough, under 500 feet of water, under land too valuable for other purposes, etc..

When the $20 surcharge is tacked on that will make some hard to reach oil worth drilling. What will that newly exploited oil cost? More than oil costs today. That's the whole point. The price hike would drive exploitation of expensive oil. Companies will drill oil here right up to the $20 surcharge price and not a barrel more. Would we spend an extra $21/barrel on domestic oil when we can buy foreign oil for an extra $20?

But what about a real oil embargo? Cold turkey. Well, of one wants to make policy based on assumptions involving the *entire world* (including Canada and Mexico) cooperating in trying to destroy the US I'm not sure I want any part of it. First, it's absurd as a basis for policy because it's not going to happen. Second, assuming it could happen, whatever the hell we would have to do to generate that absurd reaction is probably something we oughtn't do in the first place.