Wednesday, September 19, 2012

Energy Independence: Why should I care?

It is a hobby horse of both political parties and media of both persuasions. But why should I as a customer really care?

Globalization and free trade, the defining traits of American capitalism - why do these not apply to oil?

What ever the product, it is best to produce where ever it is cheapest to produce. Consumers benefit from it and the source countries benefit from an overall uplift. Yes, there are too many barbarians as rulers out there, but even there, rising tide lifts all boats - not as fast, but certainly does.

When it comes to oil, US imports majority from its North American neighbors - Canada and Mexico, followed by Saudi Arabia, not the most despicable of all the rulers. So, why does this topic poll well? Ignorance has got to be the first order. The concern is that in the event of a war with the oil producing nations,  we will have a shortage. We use international markets and international pricing, and our oil companies are privately owned and operated with global operations, not government entities.

National security experts have argued over the years that our fight with Islamists is due to our dependence on Mideast oil. Boy, if that were true, it shouldn't be too hard to find another source that can source the 18% that we currently import from Saudi Arabia. What they argue about is world energy security? That has nothing to do with energy independence.

The thought that one of our adversaries would cut off our oil supply during the time of war - either a direct conflict or due to an alignment of forces. Once again, unlike many other nations, we get our supplies from a fairly wide number of nations. Besides, this is perceived risk than a real possibility.

The left berates us on our dependency on oil, foreign or domestic. And the right belly aches about oil imports. Neither concern is about the consumer. So, why do consumers care? And why does this poll so well?