VetVoice.com (a project of VoteVets.org) recently launched a $2 million television campaign supporting the Clean Energy and American Power Act. In all, there are eight television ads that essentially claim that oil money finances terrorism and that we need to wean ourselves off of foreign oil to be more safe and secure. (The red herring in one of the ads is Iran, which does support terrorist groups, but the groups it supports – Hezbollah and Hamas – are threats to Israel, not the United States.) The ads feature veterans of the conflicts in Iraq and Afghanistan and target members of Congress who oppose comprehensive energy legislation and who have taken political contributions from oil companies. Once again, energy and national security have been mistakenly conflated.
Of course, there is a certain logic to the ads. We would be better off if we were less involved in the Middle East. Although it is not fashionable to say so, our interventionist foreign policy in the Middle East has a lot to do with why the United States is a target for terrorism. So to the extent that our foreign policy is influenced by the perceived need to have access to oil and close relationships with countries such as Saudi Arabia (the world’s largest oil producer), the less dependent we can be on Middle East oil, the less need there is for U.S. foreign policy to focus on the Middle East (leaving Israel aside for the moment).
And the reality is that oil is clearly a major factor in how the United States thinks about the Middle East. Oil was a reason for the First Gulf War. According to then Secretary of State James Baker, "The economic lifeline of the industrial world runs from the Gulf and we cannot permit a dictator [Saddam Hussein] such as this to sit astride that economic lifeline." According to former chairman of the Federal Reserve Alan Greenspan, "The Iraq War is largely about oil," which was not a claim the Bush administration made as a reason to depose Saddam Hussein. And the fact that Iran is the fourth largest oil producer in the world probably has a lot to do with why the regime in Tehran is demonized as not just a threat to the region, but to world peace.
True enough, the United States is dependent on oil (for that matter, so is the rest of the world). A little more than half of all oil consumed in the United States is imported. But less than 20 percent of that imported oil comes from the Persian Gulf. And nearly half of it comes from the Western hemisphere – indeed, the top two suppliers of foreign oil are Canada and Mexico (Saudi Arabia is third and on par with Venezuela). It’s also worth noting that the United States imports more oil from non-OPEC (Organization of Petroleum Exporting Countries) producers than OPEC producers (OPEC is often used synonymously with Persian Gulf, but membership extends beyond the Gulf countries to include Algeria, Angola, Ecuador, Libya, Nigeria, and Venezuela and excludes the Gulf country of Bahrain).
Furthermore, achieving the nirvana of energy independence (in terms of becoming oil self-sufficient and not needing Persian Gulf oil) wouldn’t make any difference in how much we would pay for oil, because the price (and supply) of oil is dictated by the market and there is no escaping this reality. Two examples are worth noting. First, in the late 1970s the United Kingdom was essentially oil self-sufficient – virtually all of its oil consumption came from the North Sea. Yet when the price of oil spiked in 1979, the UK was hit just as hard as Japan – a country that was almost entirely dependent on imported oil. Why? Because oil is a commodity traded on the worldwide market and both its supply and price are indifferent as to where it comes from or where it’s going. More recently, Brazil is now a country that is oil independent in that its domestic oil production exceeds domestic consumption. Yet the price of gasoline in Brazil is roughly twice that in the United States, because the Brazilian government heavily taxes gasoline to force its citizens to use ethanol (which the Brazilians can produce cheaply) and to be able to export oil at world market prices.
And there is this reality: the United States – because of the size of our population and economy – consumes more oil than it produces (or could produce even if there were more offshore drilling and drilling in the Alaska National Wildlife Refuge). The gap is sufficiently large (about 15 million barrels of oil per day) that it cannot be closed simply by conserving more or producing more.
Ultimately, oil (and energy more generally) is an economic issue. But it is not a national security issue. We don’t need to go to war for oil. We don’t need to have special relationships with countries such as Saudi Arabia to assure ourselves access to oil – especially when supporting an oppressive, theocratic monarchy in Riyadh that does not comport with American values is one of the reasons we have a terrorist threat represented by Osama bin Laden and the extremist Islamic ideology he espouses. We just need to accept that oil is a world commodity and that its price is dictated by the world market.
That said, there’s nothing wrong with the general idea of pursuing alternative energy. Regardless of what one believes about peak oil and when we are going to exhaust the world’s oil supplies, oil probably won’t be around forever. So we’ll eventually (whenever that is) have to find another primary source for energy (especially for personal transportation). But just as economics dictates the price of oil, so will economics dictate alternative energy. The paradox of trying to break free of oil is that the only way to do that is for the price of oil to go up. Even if it is expensive, as long as oil is still cheaper than other sources of energy there is no rational economic reason to pay more. Therefore, oil actually has to become more expensive than it is now for other forms of energy to be economically attractive and viable. But like it or not, that’s just not the case right now.