Friday, July 7

Once more unto the breach, dear friends...

Tom debunks energy myths again:

+ The truth is, our consumption per thousand dollars of GDP has declined dramtically over the past 30 years, making oil far less crucial to our economy. In 1973 it stood at roughly 1.4 barrels/1kGDP. Now it stands at roughly 0.7 barrels, or a decline of roughly 50 percent...

+ Our total oil consumption has risen only from about 17 million barrels a day in 1973 to about 21 today.

+The real issue for many is one of imports, which stood at only 5 mbd in 1973 and now sits about 11 mbd, so shifting from about one third of our oil use back then to roughly 60% now.  

Still, about the only thing dumber than describing that as an addiction is calling for independence. C. Fred Bergsten, director of the International Institute of Economics, calls the notion "ridiculous," because it implies that "price doesn't matter, that you'll pay any amount to decrease your reliance on imports--and that would be crazy."

+ Instead, Bergsten, like me, calls for more cooperation between us and rising China (with its skyrocketing demand for foreign oil), calling us "natural allies" because we're both big consumers sitting on the same side of the table opposite OPEC.

+ But if we stopped all imports from the Middle East, wouldn't the Middle East stop being a security issue? Well, as one expert points out in this piece, we don't import any Iranian oil and haven't in decades. So much for that theory of disconnectedness leading to security.

+ Autarky in any form is not a realizable strategy in an interconnected world
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