Between the Lines: Energy policy demands honest talk from our leaders

The quest for honesty continues.

Yes, it�s a familiar theme. I think in the past year or two, I�ve begun at least two columns with the above statement, usually in reaction to something spoken or written by one of our political leaders.

Kristi Noem has provided new inspiration as of late, because its so difficult to know if anything she says is reliable (she voted for the bridge to nowhere, but says she did so mainly because of a procedural issue; she says she is concerned about the flooding that soon will be rampant across South Dakota right at about the same time she voted to cut funding that would help the state deal with the problem � sigh.)

I�ve decided to expand a bit on the Noem-inspired column I wrote last week, in which I reacted to one of her recent commentaries, in which our freshman U.S. representative takes the position that limiting the role of the EPA �is just the first step towards a sensible energy plan that puts us on the path to energy independence.�

Right after this column was published, I covered a forum held on the USD campus. The main topic of discussion just happened to be energy, specifically oil in the Middle East, and whether the U.S. could survive without it. My coverage of this meeting appears in today�s Plain Talk.

The turmoil in Libya and other regions in the Middle East and the ensuing spike in the price of oil and gasoline were briefly discussed. But it proved to be the most meaningful part of the one-hour meeting.

The forum revealed that this notion of �energy independence� that we�ve been spoon-fed for the last 30 years or so is a goal that the U.S. will probably never achieve, and even it did, the price of gasoline would still be nearing $4 a gallon today.

Oil is a global product, in demand by, well, nearly everyone in the world. Meaning that one little blip � like the unrest in Libya � can make the oil market go haywire.

When Noem talks about energy independence, she is merely parroting what politicians � Republicans and Democrats � have been telling us for decades now.

Cutler Cleveland, the director of the Center for Energy and Environmental Studies at Boston University, notes that in the U.S., the elimination of oil imports, even if possible, would only reduce, and not eliminate entirely, the nation�s strategic interests in the Middle East because the economic security of every oil-using nation�and thus the global economy�is still tied to Middle East oil.

Middle East oil is so important to the world economy because 1) there�s so much of it there, and 2) since it�s concentrated there, it�s the cheapest place to obtain it.

I know, it�s a real head scratcher. But if any politician tells you that things will be much more economically stable in the U.S. if we become energy independent, it would be good to think again.

Cleveland (and the economists present at the USD forum) note that increased U.S. production would have little impact on the level or volatility of oil prices. The price of oil is determined in a global market by a complex array of forces including speculation, weather, geopolitics, decisions by OPEC, and most importantly, by market fundamentals�short and long run supply and demand forces. At the margin, producing decisions made in the U.S. have little influence on this process.

Global price determination also means that energy independence won�t protect our economy from supply disruptions abroad, according to Cleveland. He noted over a year ago that a refinery strike in Venezuela, civil war in the Niger Delta, and other events (think Libya) can quickly reduce oil production. Oil instantly becomes more expensive everywhere � the UK, Japan, China, and the U.S. all pay pretty much the same price, Cleveland said.

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 from our dependence on �imported oil� per se, said Cleveland.  A nation can reduce its economic vulnerability to oil price increases only by using less oil in total, regardless of whether it is produced domestically or imported.

Meaning that when Noem states, as she did in the column she sent to media earlier this month that �safe and secure drilling in both the deep waters off our nation�s coasts and the Arctic National Wildlife Refuge (ANWR) will create much-needed jobs for Americans, stimulate the economy, and give the United States more power over our domestic energy policies,� she�s really, in a way, pulling our leg. Probably without even meaning to.  She doesn�t understand that the U.S. will never be able to produce enough oil domestically to have a significant impact on global energy policies.

What she says sounds good. And I think deep down inside, most of us wish that we could easily solve our energy problems by simply drilling more.

This is a complex problem. There are no easy solutions. Hopefully Noem will eventually learn that simply repeating talking points about energy that have been spoken by politicians for the last 30 or 40 years will not make gas any cheaper.

It would be nice if all political leaders � I�m not singling out Noem here � would be honest to us about the vexing issues involved with U.S. energy policy.

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