1. The Culture of Congestion, a new blog by Sandy Ikeda
2. An interview with Oded Galor, on growth theory and human evolution
3. Nogales, Mexico, now and then
4. Myths about energy independence and foreign oil
5. Why FT.com charges for subscriptions, or does it?
6. Singaporean health care, from Bryan Caplan
Not there because it is not a myth: efficiency is the easiest and most rational response to higher fuel costs (and if you choose to frame it that way, energy independence).
A Prius fits the average family (median height, weight and kid-count), and costs less than the average new car. Just do it.
Or you can drive a flex-fuel behemoth and lobby for more ethanol subsidies, I guess.
Mo,
You are making a classic (and common) error in thinking we “need” to be in the Middle East at all. If “they”, whoever they are (present or future), choose not to sell “their” oil to the US, no big deal. Oil is fungible, which is to say, it doesn’t matter where they sell it, so long as they sell it to someone then there is just as much oil as there was before “they” chose to not sell it to us.
Imagine that Saudi Arabia stopped selling oil to the US and sold it all to Europe instead. Shortage for the US? Hardly. We simply buy from whoever used to sell to Europe but got displaced by Saudi Arabian sales.
In short (combined with the article’s points), “energy security”, or lack thereof, is a myth.
The “energy” article ignores the fact that technology is just as mobile as oil, perhaps even more so. If a cost-effective cellulosic ethanol process (for example) is developed in the US, it will soon be in use all over the globe (hopefully with the payment of appropriate license fees.)
I thought the overall tone of the article was quite arrogant.
Let me give a different explanation for oil prices in the 1970s. In the early 1970s the marginal supply of oil was the North Sea and the North Slope. But the roughly $3.50 price that prevailed in 1971-73 was not high enough to make those fields profitable. Prices had to rise to a level that made developing those fields profitable — probably the mid-teens to $20 something prices that prevailed in the late 1970s before the second spike in oil prices and the price that oil returned to in the 1980s after those fields came on line.
I’ve read essays which listed “reduced dependence on the Middle East” as a rationale: for a Pigou tax; for ethanol subsidies: and for higher CAFE standards.
As the low cost and largest producer, Saudi Arabia will remain the key player in global energy markets. It doesn’t matter where or from what source the U.S. gets its energy, does it? The price for that energy should remain dependent on the amount of petroleum Saudi Arabia chooses to supply. That is, as long as governments do not interfere with markets by setting prices.
thank you for this excelent article
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