Nate,

I don't find the term "Energy Independence" pleasing at all. It hits me more like finger nails on a blackboard. Above all else, I think most would agree it’s a completely meaningless phrase in that it can mean anything one chooses. Independence from imported oil? Independence from the oil companies? Independent from rising prices? Independent from negative effects of decreasing oil resources? And in what time frame does this independence develop: next month …next year …10 years …50 years? And, equally important, at what price: decreased personal freedoms …decreased domestic growth ...increased unemployment …war?

Let’s assume it means independence from imported oil in the next 10 years. This seems to be a common point of view from many including the politicians. For some reason I find such comments from Sen. McCain even more irritating then from Sen. Obama. Perhaps just because he’s been kicking around the planet longer and should know better. The only approach I’ve seen at TOD or elsewhere that might achieve such independence is a drastic and mandatory increase in consumption taxes on motor fuels. But even under such a plan we likely would still be importing oil though at lower prices. But we would still need those imports and thus would still be dependent.

As far as alternatives fuel sources and other conservation efforts I would be very pleased to see them offered here. But only if they can be developed in the 10 year time frame offered and can be shown they would be accepted today as financially viable with monies readily available to begin immediate implementation. There are certainly many technical approaches out there which could lead to some measure of “independence”. But if they won’t be supported by the public or are not fundable under the current financial system then they are just good ideas with no future.

Glad to see an effort to talk and think through "energy independence." Professor Cleveland makes excellent points.

At the same time, one should not dismiss out of hand popular anxiety about the mismanagement of our country's strategic situation. This anxiety gets attached to oil which is easier to understand than the incompetence and corruption which seems rife in our governing elite.

Here's a thought experiment. Suppose that the world's remaining reserves of oil were concentrated in Australia, New Zealand and the UK instead of Saudi Arabia, Iraq and Iran. Would "energy independence" have quite the same traction with the electorate?

Mexico's production is falling off a cliff. I would be shocked if it ever gets up very much. In July, the biggest source of imports was still Canada, at 2,390,000 barrels per day. Saudi Arabia was second at 1,675,000. Venezuela was third at 1,340,000, and Mexico was number four with 1,290,000. It is possible some months Mexico will trade places with Venezuela, but is hard to see it going up much higher than number three.

Seems the title "Is Energy Independence Even Possible for the Nation" is more to the point. Is it possible for any nation?

If we start to think long term, and I mean decades ahead, I see quasi energy "independence" as a given. Not in the political way the phrase is used, but in a biophysical sense that is inherently local or geographically regional.

Without cheap transportation fuels, wouldn't any economy need to shrink the geographic area in which it extracts and combines materials to make and circulate products and wastes? And wouldn't this area likely be no larger than the size of a major continent such as North America?

Or should I have faith in a global supergrid, where someday I can expect some portion of my electricity here in California to come from arrays dispersed across the Sahara?

"10. Energy independence would accelerate climate change. A push towards independence would inevitably lead to increased reliance on our substantial domestic resources of coal, the most carbon-intensive energy source."

The way Obama talks about "clean coal" and McCain hypes "drill here, drill now" I can understand this point. But I would suggest that Cleveland reframe the issue.

10. Energy independence can not be achieved by further reliance on domestic fossil fuels because these are non-renewable resources and accelerate climate change. Therefore, any push towards independence needs to rely first on conservation, second on efficiency, and third on renewable energy technologies that can operate a less energy demanding economy.

We just dont get it. We cant have it cheap any more. And low oilprices just make it harder to develop whats left.

I think energy independence misses the point and is a distraction from the real issue. Which is that there's going to be less and less of it globally, so we too are going to have less and less of it. How do we adjust to that? That's the issue.

There's an easy part and a hard part. The easy part, rather I should say what could be the easy part given the political will (which there won't be), would be the first steps in reducing our consumption of energy. Easy because we waste incredible amounts of energy. The later reductions will be much harder, requiring a complete rework of our way of life.

Neither those who preach independence nor those who acknowledge the impossibility doing so are facing up to this issue. Ultimately what we need to be and will be, one way or another, is independent of underground hydrocarbons.

In the meantime, on the downslope, where we acquire our energy is a pragmatic issue. "Terrorism", BTW, is people blowing up pipelines to keep their own oil and gas. Our terrorism is blowing up the people who might even think about blowing up pipelines.

Edit: Obviously almost everyone will need to be energy independent in the long run.

Nate, the CFR is a powerful community of elites including both Obama and Mccain. Obama CFR Video

That shows the connection with the CFR.

True Engery Independence is near to impossible, as we will always rely on other nations for provisions. I am first to say that we will become extremely dependent on Canada, and potentially joining union to create one North American Nation to compete with the EU. Think about it.

" The herd instinct is hard at work in the equity markets, and I believe those markets will continue to deteriorate as pensioners and other investors become increasingly anxious, and continue to make cash calls on their investment funds. I think what we are witnessing each day is an escalating ‘Crisis of Confidence’. The risk to the capital markets is that this becomes a ‘self-fulfilling prophesy’, just as the U.S. Housing Crisis was a predictable ‘self-fulfilling prophesy’ that arose out of the U.S. Interest Rate policies geared to ensure continued U.S. consumer spending, and hence U.S. GDP growth."

Source

Suppose that energy is bound into our physical materials and services so as to make them useful. Further suppose that we must trade and exchange goods and services to make society run.

Wouldn't "energy independence" then hamper certain kinds of trade? Doesn't it also run counter to globalization? Isn't it also less efficient and less profitable?

It seems that TPTB or whoever's pulling the strings these days are venturing into systemic cannibalism in order to keep the machine running.

The snake is eating its own tail.

The problem is that the sound bite cliche "energy independence" polls well among voters, and fits the Kubler-Ross denial and blaming stages of grieving - which I think is where many voters are right now. It offers foreign outsiders as the reason for our problems - with a bonus that they are the also the "same" people who attacked us! The exporters are either Islamic terrorists, or uppity leftist commies who are steadily demagogued as the evil enemy. Now, THAT is a combo package sure to be endorsed and used by any politician.

Sadly, the super majority of voters are not educated, capable of critical thought, or reasoned debate on even simple issues. Energy is very complicated, and while not as abstract and opaque as the current financial crap game, it is still well beyond the capacity of most people to understand. This encourages the cynical lip service given energy independence by polticians and media propagandists, some of whom are actually very aware of how bad the situation really is.

The word "independence" also appeals to vaguely held notions of freedom, patriotism, and the pioneer spirit that made this country great.

There are "reasons" for policies and there are reasons. Energy independence comes from the realization that oil is going to get very scarce and if we aren't overly reliant on it, the US economy is going to have a leg up on the rest of the world economy. What politicians mean is we'd like to give more Americans energy jobs. No surprise they both like nuclear power which has probably the most impact on local economies except maybe hydro made lakes.

To me energy independence is all about diversification. Its about choice. I want to be able to not give a .... when war breaks out in Nigeria, Georgia, or the middle east. People are annoyed that we have essentially 1.15 choices to fuel our cars. I'd like to be able to choose from electric, nat gas, gasoline, and some form of bio-diesel (NOT CORN). The market economy isn't known for being very transformational sometimes so its a tough area.

Point 9 is a good point. You think terrorism is bad now, if oil ever ran out or became worthless in the middle east, things would get infinitely worse. Good economies prevent terrorism.

The trick to energy independence is having a flexible system that is able to achieve the lower cost of energy at any time and I seriously doubt the economy can handle moving to that. So yeah, energy independence as in getting rid of imports is not smart.

Good discussion. While I agree with much of what Dr. Cutler says, I'd like to provide a counterpoint.

1. "Complete" energy independence is a straw dog, both for advocates and skeptics. It will always be a matter of degree. Nonetheless there is a world of difference between being completely dependent on energy from foreign sources, and being somewhat dependent.

2. Dr. Cutler's post assumes that the political relationships we have now are the ones that we will have in the future. This is an unreasonable assumption. A look at 20th century history shows how quickly relationships can change. Friends can become less friendly or hostile (Iran, Venezuela, Saudi Arabia). Enemies can become partners (China, Russia). Energy sales can be tools of political policy, and if one is overly dependent, one is politically vulnerable.

It's instructive to see how critical oil and coal were in World War II. The cutting off of oil supplies to Japan by the U.S. was the ostensible reason for Japan's entry into the war. Much of the activity on the Eastern Front represented Germany's need to get access to oil fields.

3. Ensuring a constant supply of oil requires that the U.S. maintain a large military presence in unstable parts of the world. It probably means a continuing series of actions like the Iraq War. It's also the cause of much anti-American feeling, a powerful recruiting tool for Al-Quaeda.

4. Right now, there is political support for energy independence, particularly from those on the nationalistic/military side of the political spectrum (for example, former CIA directors). It is a powerful motivation, articulated by people like Thomas Friedman and Gal Luft (Institute for the Analysis of Global Security - IAGS). Energy security provides a starting point for talking about energy, and perhaps for forming alliances.

Even though energy security may be seen as a conservative preoccupation, it would critical no matter who is in office - Obama, leftists or libertarians.

5. In addition to the political aspect of energy dependence, there are the economic consequences. Paying other countries for oil is bad for the balance of payments. Dependence on foreign oil (or oil in general) means that the economy will be whipsawed by volatile energy prices. Many business people say that they would rather pay a high but constant price for energy, rather than be prey to volatility.

Bart
Energy Bulletin

O.K.,let's turn the question around the other way and ask: Is energy DEPENDENCE good for the nation? Kind of causes one to think doesn't it?

Let's ask a much more interesting question and one that at least may have some technical validity: Is energy diversity, in source and type, good for the nation?

RC

"... Canada, and potentially joining union to create one North American Nation to compete with the EU."

Otherwise known as NAFTA. Political union will never happen though, firstly because it is only proposed by some Americans dreaming of manifest destiny and is opposed by the majority of Canadians. There are some nutcase Canucks proposing it because they can't get green cards, but the Monarchist League outnumbers them.

Secondly, most American politicians would not really want it. Canadian provinces are political equals with the federal government and would expect the same in a union. And do Americans really want to deal with ethnic homelands such as Quebec and Nunavut? Or, horror of horrors, cheaper and better "socialized" health care? Or, even worse, the idea of more than one official language? Or, catastrophically, gun control laws?

Setting all that aside, the USA is realistically Canada's only major customer for energy exports. Pipelines across the Rockies can ship some Alberta syncrude to China, but China can get oil cheaper and easier from central Asia, the Middle East, or Africa. Canada and the USA are joined together economically at the hip whether they like it or not.

Professor:

Good is not relevant. Possible is the actual issue at hand, and I would submit that energy independence in the petroleum vector is not possible, therefore, notions of "Good for the Nation" are not a meaningful conversation in terms of the Transition phase of the post-petroleum world.

However, in a post-petroleum world the ONLY energy will be local, and therefore, again, whether it is "good" or not is of no consequence.

Notions of "Good for the Nation" imply choices, specifically a choice for "not-Good" and I would submit that the USA has no choice. It will import oil for decades to come. After that, it won't and it will be wholly dependent on whatever energy it can put together on its own. Whether this is "Good for the Nation" or not doesn't really matter.

best regards,

Stuart Studebaker
(who is also a professor in RL)

"And don't worry about those folks in Quebec...we've got some Cajuns down here who would be more than happy to head north and administer a little pay back."

Actually the Cajuns came from Acadia, now part of New Brunswick, and are no connection to Quebecois in their history. Also, there are more and better-armed Quebecois than Cajuns, and the Van Doos regiment has been battle-hardened in Afghanistan.

Getting back to the main point I was trying to make, there is no need for the USA to try to annex Canada because they are our best customers and vice versa. The Tories are not lapdogs of the U.S. Treasury. One of the reasons Harper failed to get a majority in the federal election yesterday is because he correctly stated during the campaign that Canada may get some backwash from the Panic of 2008, but our banking system did not have the sub-prime frauds and was not in trouble. The Liberals shot themselves in the foot by announcing their Green Shift carbon tax plan, also what the public didn't want to hear. I've seen complaints on this and other blogs that politicians won't address the true issues of Peak Oil. Damn right they won't; it is political suicide to tell the voters the truth.

Canadian investors are just as panicky now as elsewhere in the world. At a time when commodity futures and blue-chip stocks are cratering around the world, not from fundamentals but because "investors" have to cover their margins, the general public is not interested in anything other than c.y.a. As a result, the Tories had to throw a milk sop to the public, not for any real need, but just to sooth the lumpenproletariat.

Let's clarify terms.

"Energy independence" suggests a state where the USA has zero energy imports. I do think that is a questionable goal.

However, a more practical interpretation of "energy independence" might that the percentage of U.S. OIL supply derived from imports DECLINES each year. (In recent decades, it has increased most years.) Easy to achieve through appropriate taxes and regulations (as other import-dependent countries do).

This would help to ease pressure on world oil markets and help the U.S. to regain some strategic flexibility.

When the import share is rising, we are like a desperate drug addict.

Everybody else knows exactly what we need. Makes us easy to "play."

Brazil has found huge oil reserves offshore.

The nine fields discovered in the last year are thought to hold 50 billion to 80 billion barrels of light crude — more than four times Brazil's current proven reserves. With the find, Brazil could supply all of its own needs for nearly a century or become one of the world's top oil exporters.

We should take a look off our shore.

http://www.newsvine.com/_news/2008/10/09/1976527-brazil-poised-to-become...

The argument for energy independence is flawed for economic, strategic, and environmental reasons:
1. “Unfriendly” nations are not our primary source of oil.

Why does this make energy dependence better?

2. The U.S. oil resource base is depleted to the extent that it could not yield the roughly 3.7 billion barrels of oil the U.S imported in 2007

How do you know? Brazil did not know until they drilled the exploration wells.

3. Increased U.S. production would have little impact on the level or volatility of oil prices.

Energy independence would insulate us from world oil prices. If we stopped exporting corn, (not a recommendation) corn prices in the U.S. would drop while world prices would skyrocket.

4. Global price determination also means that energy independence won't protect our economy from supply disruptions abroad.

Why not. Independence means independence. If the wheat crop fails in Russia we still have food here.

5. The sensitivity of our economic well being to changes in the price of oil stems from the overriding importance of oil to human existence, not to our dependence on imported oil per se.

Why does this make energy dependence better than independence?

6. Oil imports are a hedge against domestic supply disruptions.

True. How does energy independence prevent us from keeping the import option as a hedge against domestic supply disruptions?

7. The costs of substitutes for oil (ethanol, electric cars, fuel cell propulsion) are more expensive than oil, and will be for at least the next decade. Forcing a transition to these fuels now will raise costs and prices. Many substitutes also carry a significant environmental cost.

We are not talking about forcing more expensive energy substitutes. We are talking about increasing domestic production of oil, gas and energy substitutes that are cheaper than imported oil.

Why is energy dependence better than that?

8. The U.S. cannot wall itself off from the international energy market.

That is what energy independence would allow.

9. Energy independence would not significantly reduce the risk of terrorism.

Yes it would, by taking away several terrorist options. Closing the straits of hormuz, sinking tankers, attacking ports, OPEC blackmail etc..

10. Energy independence would accelerate climate change. A push towards independence would inevitably lead to increased reliance on our substantial domestic resources of coal, the most carbon-intensive energy source.

Increased natural gas production would allow us to close some coal plants. Oil from OPEC releases as much CO2 as domestic oil + the shipping emissions.

The notion of energy independence is comforting and makes for a great sound bite, but it is not a sound basis for a national energy policy

Why not?

Energy independence could improve our trade balance by $400 billion or more.

Luckily we still live in the age of fossil fuel. We should have a $100 billion R&D program for when that age really does come to an end.

In fact we should accelerate that end by developing new technology cheaper than fossil energy.

I don’t want the U.S. to be energy independent, I want the U.S. to be a net energy exporter, by developing those new technologies and selling them to the rest of the world.

Discussion points on alternative/new energy are false based upon Oil's ability to stamp out any and all alternative energy that SERIOUSLY threatens their bottom line.

Just one of dozens of examples, Purdue University not getting funding for a serious hydrogen technology because it is a technology that is too good and competes with the U.S. Governments (which is Big Oil in case you are not paying close attention) oil intensive and won't really work scam to build hydrogen re-fueling stations all across the country. The Purdue Univ. researcher has gone on record as saying that funding won't come through because it competes with the big oil/governments half baked, completely ridiculous hydrogen car fraud.

Or research Edwin Grays work. Before you dismiss him as a fraud, you really need to r e s e a r c h . Gray had received an award, had numerous write ups, had his motor already verified as doing what he claimed and is now dead. Look at the intense shut down by the local DA, and how not a single one of his investors went after him for fraud because he had demonstrated his magnetic motor (if it were voodoo magic then it would in hindsight 'smell' like a fraud-sniff it out yourself)

Or research this firm (duplicate from above) http://www.int.iol.co.za/index.php?set_id=1&click_id=143&art_id=vn200602...
and look for the follow up story, or just (risky) take my word for it that Shell has bought them and it is now a 'dead' story. I'll bet it gained the Solar guys a hell of a nice life style, oh come on you'd take the money to shut up and go away too (even if you didn't think that you would). What is actually remarkable is that many here will once again ascribe this as something that looked really good but upon closer inspection wasn't. You have been 'had' over and over and over. Do you really think that a breakthrough that is cheap and will let man power an entire American Household on Solar will just appear on the market through the good graces of the dirty oil boys?

Eventually the good stuff may break through, but it will not happen by Government funding of alt. energies or an Oil
companies solar division, just as the pharmaceutical mafiosos wont market or advertise natural cures and an amino acid such as L-lysine -almost as cheap as dirt) that cure oral herpes. Oh, and don't ascribe these examples as conspiracy, they are simply true stories of greed winning again and again.

Regards,
Bryan

Energy independence is a worthy and essential goal for the US.

First it would require Americans to become more energy literate.

The energy companies don't want people to comprehend the issue and instead rely on PR firms for answers(like energytomorrow.org. of the American Petroleum Institute).

Hopefully, energy independence will force people to think of ways of reducing their energy use and also make corporations invest in energy conservation.

Unworkable proposals like "drill, drill, drill" would soon be debunked if there was a national consensus on energy(proponents would look idiotic when it is pointed out that less than 25% of offshore oil is in offshore areas under moritorium or that we keep losing rigs in GOM due to regular hurricane events.

Second it is a way to reduce our exposure to risky foreign entanglements. Today about 51% of US oil imports is from 'America's enemies' by which I mean our economic adversaries--OPEC and Russia(the reason is that these countries are not so much our enemies as the enemies of Big Oil, who we patrioticly ape and so we reflect Big Oil's attitude). Strangely our natural economic competitors-the OECD and Chindia are not considered 'enemies'.

Third, America is a large producer of energy today and is as abundant
(though limited) in natural resources, more than any single country expect Russia. It is blindness and greed for us to covet
the resources of other countries even under the pretence of protecting international trade (a trade which favors americans over others).

(Is it any more logical to import fuel to burn in this country? Should the US burn up resources in other countries so they can't use them?)

It isn't inevitable that energy independence will lead to more domestic fossil fuel production and more CO2 if we understand that fossil fuels are limited.

The biggest advantage of energy independence is that it forces the government to attempt to create a coherent government energy policy. This won't happen without a policy of energy independence because the alternative, energy dependency is BAU.

Anyone who talks about energy independence should be required to put a time frame on it. Can the US eliminate its energy imports in two years? No, not a chance. In a hundred years? Almost by definition, as the world's available stocks of shippable fuels deplete. The interesting questions are when and how, not whether it will eventually happen.

And yes, I know I'm discounting plans to build enormous high-voltage DC transmission facilities and "ship" electricity from equatorial deserts and wind-rich areas to the rest of the world. Such systems may be technically practical; but I think they are far too fragile to defend from the people who want to keep the electricity for themselves and their own economies.

Prof Cleveland,
While most of your points make sense, point 7 does not!
"The costs of substitutes for oil (ethanol, electric cars, fuel cell propulsion) are more expensive than oil, and will be for at least the next decade. Forcing a transition to these fuels now will raise costs and prices. Many substitutes also carry a significant environmental cost".
We cannot calculate the cost of oil in the next 10years but its clear that the US cannot afford to import 13 million barrels per day unless its price is less than $70/barrel.
You have ignored the one very large substitution; dramatic increases in fuel economy from the present 25mpg and a dramatic decrease in vehicle miles traveled.
I would question your assertion that EV are more expensive than oil, certainly, at 0.2kWh per mile energy costs are 2-3cents/mile for EV, while at 25mpg gasoline costing $4/gallon works out at 15cents/mile. Battery costs will depend upon range and technology but with 25mile range used twice a day would be saving about $6 x360 days= >$2,000 a year, assuming that oil prices don't go above $120/barrel. Even using lead/acid batteries you would be ahead in the first 2 years.

I don't think that the lack of connection between oil and terrorism is very well founded. Offering as evidence the dollar cost of the 9/11 operation seems unpersuasive. There is also the cost of maintaining the Taliban in Afganistan and the network of schools which promote the idea that the US is the great enemy. All of this benefits from oil profits.

On the other hand, those profits are present above $20/barrel and surely we see fluctuations of US military annual budgets as a fraction of GDP both in response to security concerns and GDP behavior so the amount of support terrorism gets will have a similarly complex relationship to oil profits.

Energy independence efforts which seek to minimize oil profits could have the effect of reducing financial support for terrorism but they might also encourage fanaticism which is even more needful for terrorism than funding. It is a mixed bag. One thing that might be tried is a boycott of Saudi oil growing to a naval blockage if the responsible parties are not turned over. This would take discipline beyond the apparent capacity of current political leadership but might settle the whole matter quickly and satisfactorily. This would be more direct than attempting to use price as leverage.

Chris

Sorry to be jumping in a bit late into this discussion, but I must make an important point:

If the Export Land Model analysis by westtexas is correct, then the US WILL eventually see energy independence, whether it wants it or not, because there will be NO MORE oil available to be imported.

To be sure, this won't be happening for a couple of decades (hopefully), but happen it eventually will.

Thus, rather than talking about how we can achieve energy independence, what we really need to be talking about is how we can prepare to cope with this looming energy independence.

It won't be very long at all now before the imports start coming up short, and then start declining more and more. Add to the mix the threat that as our oil imports decline, we will become even MORE VULNERABLE to sudden supply disruptions, whether by natural accident or geopolitical event. We've only got a couple of decades to adjust our economy to the reality that we will only have our own (and maybe just a little of Canada's and Mexico's) continually depleting oil resources. This is going to be a huge adjustment. Yes, we do need to be developing the whole range of other energy resources, as much as we can and as fast as we can. I am doubtful, however, that we can come anywhere close to a 1:1 replacement for those declining oil exports. Thus, one way or another, there will have to be demand destruction as well. We would all prefer that the demand destruction be realized through energy efficiency, and certainly some of it will be. Unfortunately, given the poor leadership and planning that we have in this country, there will likely be a lot of pain as well.

This is something that the US public needs to hear, but they are unlikely to hear it from either of the Presidential candidates, unfortunately.

Everyone just saw blantant manipulation of the markets.

Up to the open futures were 1% in the green.

Already down 71 pts at 8:34.

"HAHAHA. Literally 5 days before Nixon unilaterally ended the 100 year old gold peg, Burns was assuring everyone that all was well! The reports of the coming demise of the dollar was just mere hysteria. It was only due to some oddball business in international exchanges that was troubling us, no big deal! Nothing to worry about. This is typical of the gang that runs our nation: they are bald-faced liars who then spring their 'solutions' on us in a flash when they yell, 'Forget what I said 5 days ago! Things are in a CRISIS! We got to rush and fix it, fast! Give me all your future earnings! Thanks in advance.'

We saw this in September. They said over and over again, there was nothing wrong with the fundamentals. All was well. The disorders were temporary. Not to worry, dudes! Then, despite many of us online doomsters yelling about these very same things, the mainstream media joined the Bilderberger-based leadership in screaming, 'Its the end of the world! The sky is falling! Give us all your future earnings and let us have draconian powers and we will save you!'

This is why it pays to read musty, old speeches and put them into context with their own time frames as well as today. We learn to be very suspicious of these guys. And rightfully, so!"
-Elaine Supkis

Discussion on energy independence always irritates me. Imagine for a moment that the US was completely self sufficient in fuel products. This could be in ten, twenty, fifty years, whenever, the key assumption is that domestic supply could meet domestic demand regardless of its level of demand and regardless of whether supply was traditional oil, CTL, biofuels, oil shale, hydrogen, whatever. The point I want to focus on is the price – which is really all that matters. When we worry about energy security we are really worried about the price because it is the price which distributes scarce resources. Fewer resources means higher prices and fewer people able to afford them.

In the self sufficient case, would the price of domestic fuel be completely independent of the world price?

No. Of course not. Not unless the fuel used in the US was different to that used in the rest of the world – very unlikely (I could go into why, but wont).

Why would the US price still be the world price?

Think about what would happen if the price of fuel in the US was below the world price. US fuel producers would have a strong incentive to export to the world market and get higher prices for their product. To dissuade them from exporting, either the US Government would have to ban or restrict exports, or the domestic price would have to rise to the world price.

Why wouldn’t the government restrict exports? Well, two reasons. Firstly that would mean that US companies would have lower exports and lower profits than they might otherwise. This would result in lower welfare (lower incomes, lower living standards) for US citizens and lower taxation revenues for the US government.

Secondly, there would be less incentive for further exploration and fuel development in the US – multinational companies would shift these activities outside the US and over the longer term, the US price would rise – or the world price would fall.

In the second case where the US price was above the world price, well, that’s simple; importers would buy low on international markets and sell high on the US market until US prices matched world prices. Its called arbitrage.

Again, should the Government act to restrict such imports this would result in a real and immediate welfare loss for the US. Its citizens would have to pay more for a resource than people elsewhere. This would be an unnecessary drag on the economy which would then grow more slowly (or shrink more quickly) than it would if prices were level. This would be a classic case of a gain from trade.

Subsidizing expensive US fuel would be even worse – this would imply some sort of government redistribution. This means higher taxes to both make oil cheaper, and pay for the collection and administration of the subsidy. The cost of subsidizing fuel would show up as higher prices or taxes elsewhere. (This is of course, a more general argument against those who advocate government support for otherwise unviable alternative fuels.)

The point is that we are all better off if markets are open - interdependence here really is the best choice for the US. And importantly, we are all better off if the US is connected to the international market even if a significant proportion of global suppliers are part of a cartel which manipulates the price. Energy Independence is neither a good nor practical aim if the foundation for policy is increasing the welfare of US citizens.

I have to take issue with #9. To claim that it only costed a half million dollars to pull off 9/11 totally ignores the fact that it would not have been possible without the help of an enormously corrupt and inefficient military and security infrastructure. Even if you believe in the tooth fairy and that 9/11 wasnt an inside job, you still cant deny the fact that these trillions of dollars of systemic flaws were a key contributing factor.

If imported oil (or "energy") is considered bad, then why not put a tax on it to discourage its use?

Because we all know that the price of gasoline is set by the market, a tax on imported crude oil would have the effect of driving down revenues to oil exporting countries. The federal government would have some extra revenue to pay for bank bailouts.

OPEC hates the high taxes on oil products imposed by European governments (that mostly have little domestic production) because it lowers their oil rents.

Am I the only one here who things that this point is, well, pretty lame?

9. Energy independence would not significantly reduce the risk of terrorism. Terrorism thrived when oil was $10 per barrel—it doesn’t need $100 a barrel oil. Terrorism can be done on the cheap: the 9/11 Commission found that those attacks were accomplished with as little as $500,000.

Let's see: Terrorists can bring down a couple of skyscrapers on a half $million budget. And he's saying, implicitly, that increasing their budget to, say, $10 million isn't going to effect the frequency or severity of their attacks? Because, of course, 9/11 is worst conceivable terrorist action that could possibly be perpetrated on the US?

Say WTF?!

There are rouge nukes out there for sale, if you know the right people and have enough money. But I'll bet a black market nuke costs in the millions or tens of millions -- a budget that has historically been out of reach of non-state-sponsored terrorists. That may not be true any more.