What You Should Think About Energy Independence

“If money is your hope for independence you will never have it.  The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.”

–Henry Ford

Ten years ago, the few Americans readily able to associate a concept with the phrase “energy independence” tended toward a consensus that its pursuit was a bad idea.  Energy imports were a path of least resistance sure to make the economy more efficient in the short term, and other considerations were quickly discarded.  Today many Americans contemplate issues that were once the province of academic specialists.  Today many Americans are willing to judge choices by an outlook that goes beyond the short term.

This is excellent.  In my opinion, only a great party or a terminal illness justifies failure to incorporate some sort of long term perspective into one’s thinking.  It is never responsible to look at the national economy as a great party, and it is absurdly melodramatic to look at climate change as a terminal illness.  This leaves us with a real need to look at both . . . look at them long and hard.

All the economic trends favor sweeping and swift change.  Oil prices have sustained a multiple of their peak from the 20th century.  Political responses to atmospheric carbon emissions remain undefined and shamefully belated, but they now seem inevitable.  As if those indicators were not clear enough, the American car buyer is increasingly inclined to favor smaller more efficient vehicles over uselessly large SUVs and their accompanying fuel demands.  In a sense, petrochemicals are simply going out of style.

Yet beneath the trends remain many complex problems.  Most obvious is the delay between a national committment to a new energy policy and the saturation of new technologies in the real economy.  More subtle is the role oil plays outside of combustion reactions.  Byproducts of fuel production are a primary source of raw materials for the plastics industry.  A staggering array of household chemicals also have their roots in the fractional distillation processes taking place at oil refineries.  Even if we could do without gasoline, could we also do without sandwich baggies, paint thinner, and dozens of other ubiquitous items?

I believe both major party Presidential candidates have observed aloud that the oil trade causes our nation to send large sums of money to parts of the world where “people don’t like us very much.”  To me, this says that we ought to work on our image.  To many, it seems to say that we ought to stop buying oil outright.  I suspect those views would change as the matter is examined in more detail.  Given a choice between spending $700 billion on fuel imports or spending $750 billion on domestic energy development to get the same result, and I suspect most Americans would endorse energy independence.  Put forth a choice between spending $700 billion on fuel imports or spending $2 trillion on domestic energy development to get the same result, and suddenly the price tag becomes much harder to justify.

The sticky bit here is that no honest individual can claim a high degree of confidence in pinning down the real numbers.  The science is in on climate change as an ongoing and economically devastating phenomenon.  However, the precise nature and extent of that devastation cannot even be confined to a particular order of magnitude.  Perhaps longer growing seasons will soften the impact of regional famines and expanding deserts, while transpolar shipping partially offsets losses in coastal real estate.  Then again, perhaps the Pentagon was right and global warming will be the driving force behind a new age of savagery and desperation in modern warfare.

Even if some omniscient entity were to spell out the real annual costs of climate change if status quo policies continue indefinitely, humanity would remain in the dark about the extent to which change could mitigate these harms.  Some of the damage has already been done.  Some will result from processes too far along to be stopped.  Much could be minimized or averted, but just how much?  Even for the most informed experts, ultimately it is a matter of opinion just how much economic value ought be placed on various levels of industrial emission restraint.

Also, the monetary cost of petrochemical dependence today is clearly an aberration.  Fundamental forces, like the growth of the Chinese economy, create an upward pressure on oil prices.  From a vantage point in the United States, the plunge of the dollar exaggerates import inflation.  Yet the behavior of those prices does not reflect the realities of those forces.  The real rise in the cost of this particular commodity is clearly a function of market manipulation rather than a reflection of an entirely real, but much more gradual, trend upward.  Alternative energy ventures risk having the economic rug yanked out from under them if business models marginally sustainable under present price levels must contend with much cheaper oil in the near future.

“Energy independence” has a nice sound to it.  As a principle, there is no good reason to oppose it.  Elements of any sound energy independence plan are good in practice.  Take conservation — whenever you can consume less to get the same result, scarcity is alleviated and economic conditions improve.  Research is another good example.  Our society could reach a fairly high multiple of present levels of investment in fields like theoretical physics, miniaturization, solar energy, etc. before diminishing returns would make further spending unrewarding over the long term.  Bold actions that effectively promote efficiency or discovery are entirely appropriate responses to present conditions.

On the other hand, a rush to abandon old ways could prove as costly as the inept dithering we have experienced under the sitting President’s guidance.  Imagine a huge national investment in traditional nuclear power plants is only just completed when the latest and greatest supercollider reveals a much safer and less costly method of generating nuclear power.  The United States would be hamstrung by this committment to old technology while other societies remain poised to fully capitalize on scientific achievement.  That scenario is speculative, but it is far from a worst case scenario.

President Jimmy Carter once helped guide this nation onto a course toward efficient renewable energy technology and national energy independence.  His successor promptly undid much of that work.  Many noble projects, including numerous growing businesses, were wrecked by the double whammy of falling energy prices and rescinded federal subsidies.  A long term outlook must not only consider the challenges of unresolved technology gaps, but also the pitfalls of failure to provide any new paradigm with long term support.

In the abstract, I believe trade is a good thing.  Imports and exports brings distant peoples closer together.  When conducted fairly, trade makes life better for everyone involved.  For all its rhetorical appeal, “energy independence” is nothing more than a state of doing without imports in the energy sector.  In some contexts, it offers a way to rally support for genuinely useful initiatives like raising fuel efficiency standards or funding alternative energy research.  Yet it may also distract from important priorities like addressing climate change or optimizing economic efficiency.

Energy independence itself is no big deal.  However, it intersects with several issues that are each very big deals in their own right.  To the degree that a proposed plan or policy may make our nation more economically productive, less ecologically destructive, more technologically advanced, and/or less heavily involved in resource depletion, it is likely to be a good thing.  If actual energy independence is a side effect of those gains, so be it.  The danger lies in the prospect that none of those gains will be realized even as energy independence is pursued with tremendous national zeal.