Energy Independence: Why Bother?

January 11, 2017

NOTE: Images in this archived article have been removed.

It doesn’t make economic or geopolitical sense.

In a global economy where we drive cars built in Japan, work on computers made in China and eat shrimp caught and peeled in Thailand, why do we hesitate to use oil pumped in Saudi Arabia?

Do we fear oil shortages or embargoes? We’ve weathered those before. The oil exporting countries can only hold back so long- they have to sell the stuff. Camels won’t drink it, and you can’t make vodka from it.

A nation prospers in global trade by exploiting its comparative advantage, exporting the goods it can produce better and cheaper than others. For the U.S., that’s not oil. Of twenty major oil producing nations, our production costs are in the top three, and the range is wide. It costs nearly twice as much to produce oil here as in Russia; more than three times as much as in the Middle East.

Image Removed
Data from CNN Money, reference below.

Notes: Other oil exporting countries not shown. Production cost figures vary from source to source, but the contrast between US and the lower cost producers always shows up.

Our president-elect has pledged to boost the tight oil (fracking) industry by removing virtually all federal regulation- a giant subsidy, paid not in dollars but in damage to our land, waters and atmosphere. Fracking is so destructive that New York, Maryland and Vermont have banned it, and Pennsylvania has it under a moratorium. Many counties and cities have enacted their own bans.

Rather than sacrificing air, land and waters to try to compete in the oil trade, we should work to strengthen our industries, possibly bringing back some that have offshored. Boosting industry will give us more jobs as well as more goods to trade for oil. Mr. Trump has made some progress in this direction already.

From a geopolitical point of view, energy independence is a fallacy. “Independence Now” assures dependence later, as Howard Odum pointed out decades ago:

“Such efforts made by nations which are short of energy will have the effect of using up what energy they have even more quickly..By becoming more independent now, these nations would certainly run out of resources even sooner and become even more dependent on others.”

Many energy and foreign policy analysts are equally skeptical. In a 2012 poll of 57 energy experts, nearly two-thirds said energy independence was not a sensible goal. Daniel Yergin, summarizing the survey, called energy independence “A chimera which has been invoked by every U.S. president since 1973.”

An article in Foreign Policy magazine that year traced the history of the concept, calling it “A century and a half of an idea whose time has never come.” A defense department report, also published in 2012, criticized the concept.

Let those vast reserves of tight oil stay underground in the fracking plays, for now. Later on, if we desperately need the oil, we can decide whether it’s worth the cost and trouble to extract it: Paying $4 or more for gasoline; polluting ground water and coastal waters with acids and carcinogens from fracking fluid; triggering earthquakes in vulnerable regions; creating millions of tons of radioactive solid waste; adding vast volumes of CO2 and methane to the atmosphere.

In desperation, we as a nation might decide to pay these costs. But we certainly aren’t desperate now, with oil in the $50 range and gas around $2 a gallon.

Kai Wang, “Energy Independence, Yes? No? and How?”, University of Pennsylvania Public Policy Initiative,

Howard T. Odum and Elizabeth C. Odum, Energy Basis for Man and Nature, 1983, McGraw-Hill Inc.

Foreign Policy, “Energy Independence: A Short History,”

Daniel Yergin, “How is Energy Remaking the World”, Foreign Policy magazine,

Energy Security Leadership Council, The New American Oil Boom: Implications for Energy Security,


Tags: energy independence, environmental effects of fracking, Fracking