Energy independence better as sales slogan than as policy target

April 2, 2012
In service to the quality of discourse, the oil and gas industry should fall silent on energy independence and hope that others who converse about energy recognize the consequent boost to public enlightenment and do likewise.

In service to the quality of discourse, the oil and gas industry should fall silent on energy independence and hope that others who converse about energy recognize the consequent boost to public enlightenment and do likewise.

Energy independence is an appealing ideal. So is perpetual youth. The problem in both cases is achievability.

Among countries that import more energy than they export, the view prevails that energy independence exists as an inverse function of imported energy's share of total consumption.

This view ignores too much. Saudi Arabia exports many times more energy than it uses yet depends on revenue from those exports to fund not only its petroleum operations but also most of its national budget. It is as energy-dependent as any of its net-importing customers.

As soon as a country trades anything internationally and encounters US dollars in the settlement of its accounts, in fact, it becomes subject to the vicissitudes of energy markets, no matter how much energy it does or does not import. From that moment on, it cannot be energy-independent.

With one theoretical exception, therefore, countries are no more likely to be energy-independent than people are to be forever young. That exception would be the country economically isolated from all others, the country that produces nothing for trade and that buys nothing not produced within its borders. In such a country, most energy probably would come from combustion of wood and dung.

Freighted with such problems, energy independence means little. It's a concept devoid of content, a rallying cry.

But it makes an effective sales slogan. Everyone marketing an energy program uses it.

Oil and gas producers have asserted the ideal of energy independence in their policy arguments for years. So have antoil advocates of taxpayer subsidies for economically hopeless alternatives. Both sides can't be right.

But empty concepts are like that. They work in any argument. This helps explain the lamentable state of contemporary political discussions about energy.

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