Monday, February 27, 2006

Addicted to Foreign Oil

I found it remarkable that President Bush said in the state of the union that the US is "addicted to foreign oil". Who must he have been placating? Was this an olive branch to the left? What is a republican president, a former oil man himself, doing making a statement like this? What does it mean? Could he be serious?

Since the state of the union, Bush has been saying it more and more. So I think he means it.

Once I got over my intial surprise, I wrestled with vague notions of the government telling us not to drive SUV's, silly pie in the sky alternative energy promises (solar rocks, man!), and general anti consumerist malaise.

Then I realized why it was so important that this statement come from W:

When President Bush says we are addicted to foreign oil, that really means something. From any leftist or even democrat politician, its just the usual propaganda - likely accompanied by all kinds of cynicism, negativity, and the lack of any real alternative. From Bush, it means that he sees a problem, and he's going to act. From Bush, the actual meaning of this statement, and the implications, have a chance of penetrating the minds of the roughly half the country who has completely tuned out the ridiculous left. This message will get through. And if its a problem, Bush will do something about it.

Why is it so bad that we are "addicted" for foreign oil? What does this even mean?

It means that the entire US economy is dangerously tightly linked to oil. We can't live without it. We can't make enough of it on our own. We have to buy from all these awful nations like Iran and Venezuala, who then use their riches for anti American purposes. We have to care about what happens in the Middle East - A LOT! - because instability harms our economy. Don't get me wrong, this isn't the retarded left wing "blood for oil" or "don't drive SUV's" or "Americans are bad" pitch. The hard fact is that oil is critical for the survival of our economy.

On Friday Al Qaeda tried to blow up a Saudi oil terminal, thankfully failed, and oil prices spiked. With oil and energy prices high, almost every US citizen is impacted directly. Worse, large companies eat price shocks in their recurring cost structure. This lowers profits, maybe alot, maybe they go into the red. This hurts the stock market, maybe alot. Maybe some people lose their jobs.

Imagine what would happen if we had to go to war in Iran? Would our economy survive it? Is that the choice, either we let these nutcases develop nukes and save our economy, or we blow up their processing plants and cost US workers a million jobs?

Wouldn't it be great not to have to worry about that?

Sure, its a pipe dream at the moment, but what about this wind power stuff? If wind works as an energy source, then what could be better? OK so wind isnt going to power our cars, but it could sure reduce consumption of fossil fuels in, say, electic power generation. That would be really good.

What about ethanol for our cars? Too expensive? Up until now I would have said ethanol programs only exist because of the Iowa caucus, and they typify government handouts that should be eliminated. Now I'm not so sure. We are addicted to foreign oil, and the addiction is harmful. I don't think the solution is conservation, I think the solution is innovation. Conservation will occur naturally when prices get too high - never before that - but by then it will be too late. Innovation will also occur when prices get high. But the hidden costs today should also be considered. The cost of making hostile regimes rich, the cost to our economy of supply shocks, the cost of have to use our military in the middle east. These costs are high. These are national issues. In this addiction, the low prices are the drug, and the economic shocks and hostile regimes are the harmful effect.

Wouldn't it be great if Venezuala and Iran didnt matter? If the whole middle east didnt matter? I think it would.

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