Drill Baby Drill – But for the Right Reasons

Energy Independence is not possible in the United States. It is not even desirable. There are many reasons to want to tap into our natural resources. It’s cheaper than buying it overseas should be the first one. Opening up our continental Shelf to development of our natural resources makes sense if we can drill cheaper than we can buy it.

When I hear conservatives argue that we should not be dependent upon foreign oil, I cringe. The argument smacks of simple protectionism. The same argument could be made for our food source. After all, what is more important than feeding the people.

And the real funny thing is that it is not even true. Not even close. See the first chart which says who imports more foreign oil? The US is by far the worst offender by this standard. But, if you look at dependency as imports vs. total consumption, the US is must less dependent than most of Europe. And Japan is a cou
ntry more than one-third the size of US that doesn't produce any oil. Not a drop; there is no hand-wringing about its so called dependence.

After all, it doesn’t matter how much oil we consume, it is what we do with it that matters. And by that measure, we are anything but dependent. The US imports vs. GDP we are less dependent than China, India, Japan and similar to the other OECD countries.

The US should not drill for energy independence. It should allow the oil companies to drill and they will drill only if it makes economic sense.

Green Jobs Fallacy

The idea that we can stimulate the economy by taxing oil companies and subsidizing wind and solar, doesn’t even pass the smell test. It does create jobs, but at what cost. Think of all the many ways that we could stimulate the economy. We could tax chewing gum and subsidize mints. That would create jobs in the mints sector, but would it be good for the economy? We could tax imported rice and subsidize corn (my bad we already to that). We could tax pornography and subsidize brothels. It would definitely provide jobs, but then Acorn might have to hire all those people back.

The real problem with the green jobs stimulus, is that it looks at the benefits, but fails to look for unforeseen consequences. For every job created in a wind turbine engine factory, there may be another job lost in an oil company. For every dollar spent on subsidized green power, we could have spent that dollar on dirty oil power, and kept the subsidy. Hmm...

Source for oil import and consumption: Energy Information Administration (EIA) - www.eia.doe.gov/emeu/cabs/ . Source for GDP: CIA Factbook.


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