Energy Independence II ( John Stossel still doesn't "get it!" )

townhall.com | August 27, 2008 | John Stossel

[kellynla]

John Stossel sounds like a real defeatist. ... We have our backs to the wall, and he's raising the white flag."

"Stossel has lost his mind."

My column last week mocking "energy independence" angered people.

I argued that "independence," a favorite slogan of vote-hungry politicians, would require the government to interfere with the global division of labor, which, as economists have understood since Adam Smith's day, make us richer and therefore better able to deal with the future uncertainties. "It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. ... If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them," wrote Smith.

Of course, as many readers noted, the federal government, by doing things like prohibiting drilling in on- and off-shore areas that may have oil reserves, makes it more expensive or even impossible to produce energy in this country. Those policies should go, but that would still not bring self-sufficiency. Our demand for oil is too great.

And anyway, if the economics of oil production favor foreign over domestic producers, it still makes sense to buy the cheaper product. It wouldn't matter how much shale oil we have in the United States.

Readers correctly point out that because governments control much oil production, there is no global free market. But it does not follow that market forces don't work. There are many sources of oil in the world and many buyers. Supply and demand still set the price globally. It is foolish not to buy at the lowest price.

[RobRoy]

>>He’s absolutely right on all counts.<<

I concur. I was expecting to see something shocking in this article. Nothing there that I don’t agree with though.

[Red Boots]

I forgot to add: that military power is based on economic power, so we must be very careful that any solution that we propose to weaken our enemies doesn't weaken ourselves even more.

[RobRoy]

>>Maybe you can clue us in on how we can extract ourselves from the world economy without plunging us back into a pre-industrial revolution life style.<<

As long as we can keep indoor plumbing and avoid the nasties like Polio, I’m down with that!

Oh, and I want to keep my mountain bike. And I really need Google. And I like my electric basses and amps.

Never mind...

[Mad Dawgg]

First tell us all WHERE (what countries) we get our oil from.

[RobRoy]

>>It is the cost of living our lifestyle. Try living a subsistence lifestyle for a year then tell me if it’s worth the cost.<<

I’m with you. I like to camp, but not for more than a week or so. ;)

I like to bike commute, but only because I don’t HAVE TO, like so many in other countries.

[RobRoy]

I had heard several years ago that once oil got to $30 a barrel, it would be cost effective to extract from the oil shale in Colorado.

I take it that was just what in sales is called a BFC (Big Fat Claim) with no real evidence to support it.

[RobRoy]

That post makes no sense. At least not from an historical US perspective.

[GreenAccord]

I suggest a read of the book Gusher of Lies. It is not a Pro-Bush screed or anti-much-of-anything read about how energy independence has been promised by EVERY President since Nixon (all of whom, curiously, had a 10 year goal). Yet, here we are, 35 years later and every bit as dependent as that day. (actually more so)

In short, the bumper sticker-sized synopsis is; The US cannot support it's global leading GNP with the energy we have at our disposal within our borders, and the global economy wouldn't allow for it.

Also, the author spends a lot of time blaming the Jews,....errr, I mean Neocons.

[RobRoy]

>>Stossel still doesn’t “get it!” ) , DManA wrote:
BUT, they are funding RADICAL mosques around the world. It isn’t all black and white with the Saudis, it’s a dark shade of gray.<<

I remember that the Soviet Union was our “ally” during the second world war. It did the job.

Geo-politics is more complicated than some would have you and me believe.

[sima_yi]

...once oil got to $30 a barrel, it would be cost effective to extract from the oil shale...

Shell claims that their in situ retorting process would be cost effective at $30/bbl. After adjusting for inflation and salesman's hype, I think $60/bbl would be a good estimate for profitable extraction. The whole thing is still stalled by being wrapped up in government (read "environmentalist democrat") red tape.

There is enough kerogen recoverable using current technology to supply the entire current US demand for oil for over a hundred years.

[steve-b]

insist on independence from Mexican and Norwegian oil? No.

You know perfectly well that the reason to minimize our dependence on foriegn oil doesn't have anything to do with those particular countries, and which ones it does have to do with.

[steve-b]

However, it’s critical to remember that domestic oil production increases are simply a short-term patch. Ultimately, we need to develop energy alternatives — investments now will have the salutary effect of cutting oil prices on the world market immediately.

[steve-b]

If I had a magic wand I'd invent an energy source that would make their black sludge worthless over night. But we live in the REAL world.

In the real world, we need to work on inventing the energy sources that will make their black sludge worthless* in 10-20 years (and worth less from Day One, as speculators react to the threat that the stuff will lose value in the future).

*Oil is also used as a chemical stock for plastics and whatnot, so it'll still be worth something.