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The Ongoing Myth of Energy Independence

Now that the Democrats have swept aside the Republicans in both the House and the Senate, they are clamoring for major changes in policy. The first item on their list, rightly, is a change in America's military occupation in Iraq. They also want to raise the minimum wage and make prescription drugs more affordable. Bully for them. But the other item on their to-do list--energy independence--shows the profound, willful, ignorance of American voters and their politicians.

On November, 8, the new Speaker of the House, Nancy Pelosi, was on national television declaring that her party was going to be pushing for "energy independence and all that means."

To be fair, Pelosi isn't the only politico in the U.S. promoting the mirage of energy independence. A bunch of neoconservatives, led by pro-Iraq war militarists like Washington insider and super-hawk Frank Gaffney, former CIA director James Woolsey, and New York Times columnist Thomas Friedman, have also been pushing for more domestic production of ethanol and less reliance on imported oil--particularly the crude that comes from the Persian Gulf. For the neocons, and their allies in a new group called the Set America Free coalition, buying less oil from the Persian Gulf will magically result in less terrorism in the U.S.

Of course, these calls for less foreign oil aren't new. Way back in 1970, a U.S. Representative from Houston named George Herbert Walker Bush, was declaring that America should be wary of oil imports. "This is particularly true now when instability in the Middle East severely threatens sources of our petroleum imports from that region of the world," he said. At the time when the George Bush the Elder uttered those words, the U.S. was importing just 1.2 million barrels of crude oil per day and domestic producers were providing the majority of America's oil needs. In early 2006, the U.S. was importing nearly 10 million barrels of oil per day (about 60 percent of its needs) and George Bush the Younger was declaring that the U.S. was "addicted to oil" and thus, it should quit importing so much oil from the Persian Gulf.

Alas, both of the George Bushes and their fellow politicos are ignoring the reality of the global market and the growing interdependence of the energy sector. For instance, in 2000, the U.S. imported less than eight percent of its gasoline needs. By 2006, it was importing about 13 percent. America's imports of other motor fuel, including jet fuel and diesel, have also increased.

The U.S. needs more foreign natural gas, too. Canada, America's biggest gas supplier, has passed its peak gas production. Over the past two decades, as American gas fields have declined, U.S. imports of Canadian gas quadrupled. But Canada's gas production peaked in about 2002, and the country's gas output could fall by half over the next two decades. The decline in Canadian gas, coupled with America's ongoing hunger for natural gas means that by 2010, the U.S. will be importing about 10 percent of its daily gas needs in the form of LNG. Much of that gas will come from OPEC countries like Qatar and Nigeria. By 2025, the Federal Energy Regulatory Commission expects LNG to account for 20 percent of America's daily gas consumption.

Making the matter even more absurd is that politicos of both parties, Republican and Democrat, have been restricting the expansion of oil exploration in America's coastal waters. The eastern Gulf of Mexico alone holds an estimated 20 trillion cubic feet of gas and 3.6 billion barrels of oil. But politicians from coastal states like Florida and Alabama don't want tourists to see drilling rigs when they go to the beach. So those resources are kept off-limits, even though they would help reduce America's need for imported energy. Further, those offshore resources are close to Texas and Louisiana where deepwater drilling is booming. And the technology and pipelines that are helping produce that offshore boom could easily be transferred to the eastern Gulf of Mexico.

Despite all of these facts, American politicians continue to push the fantasy of energy independence, a world where ethanol made from corn (and, they hope, from switchgrass) will replace oil and American soldiers will never again need visit the Persian Gulf, except, perhaps, on vacation

The truth is this: the last time the U.S. was independent of energy imports was 1949. Unless or until America accepts the reality of the energy market, and America's interdependence with the Arab and OPEC worlds, then the idiotic political rhetoric--both Republican and Democratic--will continue.

If Pelosi and the Democrats are serious about conserving oil and reducing imports, the most effective way is simple: raise the federal fuel tax by a dime per gallon every year for the next ten years. It won't be politically popular but it's the best solution. Of course, observers shouldn't hold their breath while waiting for that tax to be implemented. Instead, they should brace themselves for (at least) two more years of inane discussions about energy by Washington insiders who know little--or nothing--about the reality of the modern energy business.

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