28 May 2012

The pipe dream of energy independence

RM sent me this great clip from the Daily Show. Watch how eight US presidents have promised -- and failed -- to deliver independence from "foreign" energy sources. Why is this? Because (1) we like using energy and (2) foreigners can sell us energy at lower prices than we pay for domestic supplies.

Will fracked natural gas end this cycle? Not until (1) it replaces oil for fuel in transport and (2) comes in sufficient volumes to have a significant position in the market.

Bottom Line: We are not "dependent" on foreign oil. We buy it because it makes our lives better. Get over the silly nationalist rhetoric and welcome your market overlords. (Oh, and note how there's not a SINGLE sign of falling demand for fossil fuels. Prepare for climate change too!) Enjoy your holiday!

2 comments:

plumbing supplies said...

American Energy Independence will be achieved when American drivers have the choice to fill their cars and trucks with non-petroleum fuels. Today, cars and trucks use gasoline and diesel made from petroleum. Technology exists today that can enable all cars and trucks to run on USA produced synthetic fuels (alcohol or diesel), natural gas, biofuels, and electricity.

Alex Trembath said...

Oil does make our lives better, but it's also an example of "technological lock-in." We're path dependent on an industrial economy that relies on oil as a primary energy source, but only a few decades into that model, the North American supply of oil was outstripped by growing demand. Oil is a non-fabricable, non-renewable commodity which is absolutely essential to the modern economy and which the United States doesn't have enough of to fully meet demand. In theory there's no problem with having a trade partnership with foreign suppliers, but there are costs to this one. We're supplying petro-states that use oil revenues to train anti-American militants and suppress their citizenry. Meanwhile, 1 American soldier dies for every 50 oil convoy missions.

We are dependent on foreign oil, because our cost-benefit calculation put us in a position of sacrificing soldiers and citizens for our energy use.

There are also signs of falling demand for fossil fuels. Demand for coal and oil in the US are probably on a permanent downward trajectory, due to increasing fuel economy and the cheapness of natural gas (also a fossil fuel, but a sign that technological substitutes can replace commodity energy demand). The challenge is accelerating and scaling these shifts around the world where, yes, growth in demand for fossil fuels is sustaining its torrent pace.