Isolationism is neither sound nor achievable as a route to energy security. Yet it’s the path toward which US President George W. Bush says he’ll steer his country.
In his Jan. 31 state of the union address, Bush set a goal of replacing more than 75% of US imports from the Middle East within 20 years.
With a few adjustments, the US could do that now without terrible strain.
But what would be the point? Other than how it affects shipping distances, where oil originates matters very little. What matters to importing countries is that enough oil be available in trade to cover aggregate needs.
On that score there is reason for concern. Global oil consumption seems certain to keep straining production capacity, the growth of which depends on investment. Especially important is investment in the Middle East.
There, producers have a reciprocal concern. Under pressure to make huge, long-term investments, they worry as much about future consumption as consumers worry about future supply.
Bush has validated those worries and jostled exporters’ reasons to commit capital and natural resources to future oil supply. He supported his case by disparaging oil from “unstable parts of the world.” From the commercial perspective, it’s the US that looks most unstable here.
On Feb. 2, the president again asserted that America is “addicted to oil” and said, “It’s a national security problem and an economic security problem.”
In fact, there is no security like the complementary interests of buyers needing an essential commodity and producers of that commodity needing money. Security problems grow out of disruptions to those relationships.
Bush’s jawboning against oil and the Middle East could become that kind of disruption. While foreign policy crises sometimes justify disengagement, it’s far from clear what overarching problem in the Middle East warrants a lurch by the US into uneconomic fuel choices and a chill on petroleum investment.
Oil isolationism can insulate the US neither from a market full of surprises nor from a continuing need for oil, much of it from elsewhere.
Economic mistakes by governments are costly. They certainly do nothing for security.
(Online Feb. 3, 2006; author’s e-mail: [email protected])