Thursday, November 29, 2007

Energy Independence?

Fire of Liberty

Steve Chapman has a good column in the Chicago Tribune which points out that the quest for "energy independence" being offered up by various politicians is a pure fantasy and will have a more negative than positive effect on the environment. Chapman hit the nail on the head of the unlikelihood of achieving such independence when he made the following observation:

If energy independence were truly feasible, it probably would have been achieved back in the 1970s, after President Richard Nixon embraced it. In 1973, we imported about a third of the oil we used, compared with 60 percent today. Domestic production was at its peak. OPEC was in the process of turning the energy world upside down by quadrupling the price of oil.

But the idea withered on the vine -- because of the brutal reality that even at a steep price, imported oil was cheap compared to doing without. That remains true today. And though global warming calls for cutting greenhouse gas emissions, the most likely replacements for oil are a poor fit for that role.

The chief attraction of energy independence is that we could fill up our cars and operate our economy without caring what happens in Iran, Venezuela or Russia. As if. So long as we use a significant amount of oil, regardless of where it's produced, we remain aboard the cost roller coaster. When the price of Middle Eastern oil soars, it takes the price of domestic crude along for the ride.

It's enchanting to imagine swearing off foreign oil in favor of ethanol made from wholesome Illinois corn, or fuels derived from West Virginia coal. But even if all the corn grown in this country went toward ethanol, it would cut our gasoline consumption by no more than 12 percent. In cost terms, ethanol can thrive only with lavish federal subsidies. In climate terms, the switch offers small benefits at best.

So why does ethanol get treated like the prettiest girl at the prom? Because our leaders' motive is pandering to American farmers and corporations, not making sound energy policy. If you want to know the main reason the federal government subsidizes ethanol, I've got two words for you: Iowa caucuses.

It's be nice if a lot of the politicians would take the sage advice of Steven Chapman and refuse to endorse policies that give government subsidies to multi-million dollars corporation and farmers who should be able to make ethanol based on market demand. From my observations of this political season, I'd have to say that Senator McCain is the only one brave enough to take on the corn lobby of Iowa and call for the elimination of government subsidies. (I guess McCain remembers the sage advice on farm subsidies that Barry Goldwater gave in his 1960 classic book Conscience of A Conservative.) I say let the market not the government decide the fate of ethanol.

No comments: