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The correct way to think about oil and geopolitics is 'pricing'. High oil prices prop up the Russian, Venezuelan, Iranian and Saudi regimes. If the US were to substantially lower its oil consumption, the global price of oil would drop (we are seeing a temporary version of this thesis now due to the global economic situation). In that case, those regimes would have to make changes in order to deal with substantially lower oil revenues.
Now, I am not one that thinks we'd get a Saudi democracy with lower oil prices. Syria, Egypt and Pakstan do not have substantial oil reserves, and they're hardly models of Jeffersonian constitutionalism. But there is a respectable foreign policy school of thought that says permanent lower oil prices=reforms in Russia, Saudi Arabia, makes the Iranian mullahs look less beneficient, etc. If a cut in US oil consumption could reach that goal (assuming that Chinese/Indian growth does not overwhelm any cut in US oil consumption) then there is a foreign policy case for decreasing our oil consumption.
I would disagree. Without bananas, our lifestyles are little affected. Without oil, our entire culture crashes. We won't go to war for lack of bananas; we now are at war for oil resources. Oil is our lifeblood.
Henderson says we are dependent on trade for bananas and oil, but we are dependent in different ways. We are dependent on trade for bananas as a source of bananas. We are dependent on oil, independent of trade. We are dependent on oil like a drug addict is dependent on his drug suppliers just like President Bush said. Our foreign policy often turns on questions of who has the oil.
Henderson also does not mention that oil is a limited resource. Just like house prices could not rise forever, oil supplies also can not rise forever in the face of increasing demand. Someday we will be forced to look elsewhere for our energy needs just like the farmers in the high plains will need to start looking for new water resources after pumping out the Ogallala aquifier.
Henderson and you may be right that energy independence is a crazy idea. It certainly is a crazy idea anytime soon. But I do not think your free trade argument makes the case, because it ignores too much of the reality of our current oil economy. Oil is not like bananas. But we should work to make it so. We do not need to be independent of foreign oil, but it is dangerous to remain dependent on it. I believe a case can be made to aggressively pursue other energy sources now rather than to have those changes forced on us later.
Finally, I would just throw out here that, per (1), I have it from one who works in energy security that natural gas is the source of the future, that this is probably an achievable goal, and that it would be good for the US, bad for Europe.
Yeah, except that for some reason "energy independence" for Sen. Obama extends to "we can't allow ourselves to become dependent on cheap Brazilian sugar ethanol."
Instead of asking "can we achieve energy independence" we should just ask, "are we letting companies explore sources of energy to the fullest extent?" Right now the answer is no.
Will: The only even half-plausible argument I can see for "energy independence" is non-economic (because as you point out, in terms of basic Ricardian theory, it falls flat on those grounds), but rather military-strategic.
(This is a variant of lxm's argument, the difference being that I'm not claiming that we're in Iraq or Afghanistan for access to oil.)
The US gets enough of its oil from Canada and Mexico (and domestic sources) that even a total sea blockade wouldn't destroy the Republic - especially given military fuel reserves to crush a blockade, so in practice this doesn't matter much.
But at least it's an economically and politically coherent point to make.
This means that we are forced to take stronger measures to protect our supply of oil and that we are more sensitive to shortages. If our supply of bananas dropped precipitously because, some war started in Brazil over bananas, people would be unhappy, but fundamentally, very little would happen to our economy systemically. If a war broke out between Iran and Saudi Arabia and the Straits of Hormuz became inaccessible or some nation bombed a bunch of our refineries, we're fucked. We had gas lines this year in some parts of the country (like Atlanta) because of our low reserves as a result of hurricanes battering our refineries this year. If more of our refineries were taken out, it would be a disaster.
As a matter of sustainability, this is a weaker argument because market forces will hopefully correct for it, but not without some pain. Oil is not a renewable resource and eventually, we will have to switch to some other energy source that it currently more expensive if we want to keep living the way we do currently.
So, that is the case for reducing "energy dependence", though the notion that we would be "energy indepedent" at face value is silly, but I think that the notion that we should diversify our energy sources is a very good one, as that will make us less susceptible to oil shocks, which are a much more real and threatening problem than banana shocks. I think the use of the phrase "energy independence" is meant to appeal to certain xenophobic and anti-trade tendencies of the electorate, but at least a subset of the policies proposed to "reach energy independence" are desirable policies, and that's the real point.
With all due respect, these definitions are so simplistic as to be strawmen.
A more sensible defintion is here:
http://www-cta.ornl.gov/cta/Publications/Report...
"For all conceivable world market oil conditions, the cost of oil dependence to the US economy will be so small that they will have no effects on our economic, military or foreign policy."
This author argues that this goal would be acheived if oil imports are equal to or less than 1% of GDP. Oil imports as a percentage of GDP are graphed here:
http://photos1.blogger.com/img/243/2888/640/oil...
You can draw your own conclusions. But the notion of reducing oil imports has merit. Consider first that imports are partly necessitated by excessive restrictions on drilling. If the government got out of the way in the United States, the result would presumably be lower and more stable prices worldwide, as well as greater independence. Henderson talks about the oil production in the middle east being inefficient, and notes the futility of embargos. But that misses the real problem - look at Iraq, which has scads of oil, that hasn't been, and still isn't being exported, not because of conscious policies, but because of ethnic strife, repressive governments, and international policies.
There are good reasons to dramatically cut oil imports, and good reasons to believe that substantial cuts could be accomplished without unacceptable consequences. Many of the strategies to decrease imports favor free markets. Henderson is right that nothing comes without a cost, but his simplistic definitions grossly exaggerate the costs.
Going back to the example:
We do not need to be "Banana Independent", Car Ind, etc. But if we are Zimbabwe and are not food independent then something is clearly wrong and there are countless other examples where restrictions are blocking the full effects of free trade.
Here in the USA, we seem to block what resources we do have from getting to market like ANWR.
But ridiculing energy independence is, for many libertarians and so-called "conservatives," just a way to pooh-pooh the many manifest benefits of reducing our reliance on fossil fuels.
Henderson acts as if people only make one valid argument for such a reduction: we might get cut off.
That is in fact one of the weakest arguments, one that the presidential candidates have never made, to my knowledge, and as such reveals it as Henderson's straw man and red herring.
Let him answer his opponents' strongest arguments, not their weakest ones, or the ones they rarely if ever deploy.
"It is important to understand that energy independence does not mean closed borders or economic isolation. Energy independence will be achieved by producing abundant, clean and affordable domestic energy through new technology that will enable all countries to do the same. The path to American Energy Independence leads to global energy independence."
http://www.AmericanEnergyIndependence.com
Now, you can argue that energy independence is an impossible goal, you can argue that government intervention is the wrong way to go about it, and I'm as principled a free trader as you can get, but simply saying "Protectionism Bad. Free trade Good." does nothing to rebut their energy policy. It's like saying the candidates' education policy is bad because drugs should be legalized.