Wednesday, September 3, 2008

Declaring Independence from Oil Fears

Here are two facts I have difficulty keeping in my head at the same time:
(1) Barack Obama is advised on energy policy by some of the ablest minds in that business; and
(2) In accepting the Democratic nomination as candidate for President last week, Barack Obama actually uttered (or more accurately, exclaimed) the words : "And for the sake of our economy, our security, and the future of our planet, I will set a clear goal as President: in ten years, we will finally end our dependence on oil from the Middle East."

As I have previously tried to argue here, here, here, and here, there is possibly no more empty notion in American political discourse than the goal of "ending dependence" on Middle East oil. Over the past 3o years the share of imports has dramatically increased in virtually every sector of the U.S. economy--from clothing to computers to cantaloupe. The process is called globalization. It is not going away. Oil exporters in the Middle East are far more dependent revenue from us than we are on oil from them. The top two suppliers of oil to the United States are (know the answer?), not Saudi Arabia and Iran, but Canada and Mexico. And on and on. For more, see the above links, as well as a great book by Robert Bryce.

But the idea of enhancing national security and boosting the future prospects of the planet by ending dependence on oil from the Middle East isn't just analytically empty (and it is analytically empty.) It is also terrible politics.

OK, I'm an economist. What do I know about politics? Maybe not much. But there is no way to deliver on this empty promise. There is no way to even talk sensibly about delivering on such a promise. (How is the accounting going to work? Will there be enforcement mechanisms? What about oil futures?...) What is worse, much worse, is that even uttering this empty phrase provides credence to some of the most deeply ingrained and dangerous tendencies in U.S. politics--which also happen some of the most deeply ingrained and dangerous tendencies in politics elsewhere in the world: namely, the tendencies for politicians to pander to (or simply appropriate) rent-generating industries involved in resource extraction. (For attempts to address this governance "curse" endemic to resource-rich countries, see this and this).

For shorthand in the U.S., let's just say that making the Middle East directed variant of "energy independence" a goal plays right into the hands of the already-powerful-enough oil and coal lobbies. "Energy independence" is the preferred slogan used in support of the three least palatable items on this country's energy policy menu: drilling our way to a better future; turning coal into oil; and running the cars of tomorrow on corn juice. (You might know these three policies by their other names, "giving assets in the public trust away to the most profitable companies on earth without changing much of anything else that matters," "going in the wrong direction on climate change while subsidizing environmental devastation," and "distorting world food markets so that the members of the human family who have the least are burdened the most." )

As for our presumptive nominee on the Republican side, indications of serious thought on energy policy are pretty much non-existent. One has a difficult time determining which of the energy policy proposals most recently advanced by Senator McCain is more absolutely pathetic and misguided: the "drill now" refrain of the last couple of months or the abortive "gas tax holiday" proposal from the start of the summer. When reason is absent, what reason is there to criticize?

(An uplifting postscript: I can barely contain my amusement at the marketing of Sarah Palin as a bold reformer who took on established interests in Alaska. In having taken on big oil to ensure that the people of Alaska would get their just share of revenues from resources extracted from her great state she resembles no one more that than that other GOP hero, Hugo Chavez! As we watch the presumptive Republican Vice Presidential nominee tout her reformer's credentials tonight, should we be laughing, crying, or waving Venezuelan flags and chanting "viva la Revolution"?)

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