The Stoner Pundit

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Wednesday, March 01, 2006

Energy independence is a disaster in the making?


"it could doom the economy, the environment and our position in the world."

If you ask me, this article is a just bit pessimistic. The writer must be a free marketeer, which is what I used to be. I believed in markets and the power of the invisible hand. One day I woke up and planes were flown into the World Trade Center towers. Is it possible that the some economic transactions cost more than the price paid?

If we look at the world, there are times when the full economic costs are not reflective of the price. Cigarettes, for example, cost a few bucks a pack. The economic damage done by them to the lives of human beings through cancers, emphysema, heart disease, and lost economic performance are enormous. Therefore perhaps we should raise the price to a point where individuals partake in a manner that is beneficial or at least neutral to society. Thus we see higher taxes on cigarettes, designed to create government revenue to pay for the damage done to the public health and welfare.

So when we look at oil, we see a world where the vast majority of proven recoverable reserves are in the hands of people who regularly scream "Death to America". These people are empowered by the money we spend on oil and they spread their ideology with the money we give them. This is a recipe for disaster for our country. We can't continue on this path.

What to do? We have to become energy independent, at least to the extent that it reduces our need to deal economically and culturally with these fanatics. We need to become efficient. We need to conserve. We need alternatives to oil. We need to devalue oil. We must recognize the true costs of oil.

First, let me say I believe it is impossible to become 100% energy independent. In the future technological advancements may be made that allow us to be 100% independent. For now though our focus on energy independence must be to escape the Mideast-OPEC sphere of oil influence.

We should start with efficiency. Hybrid engines, plug in hybrids, raising CAFE standards on automobiles, using strong plastic composites to lower car weight are some of what is needed.

Next we should conserve. One idea is to tax a gallon of gas so that it will always be $3.00. At current prices this would put an additional 60 to 70 cents (OH-KY area) onto a gallon of gas. A higher price should reduce consumption. It also would incentivize drivers to get cars that are more efficient.

To this end there should be a national campaign to promote recycling. A single aluminum can takes 350 watts/hr to create. That means one can in my area takes the equivalent of about 2-3 cents of energy. If we're going to one day start plugging in our cars at night to suck up electricity from the grid, we're going to have to find ways to save electricity. There are many recyclable items in every household in America and unfortunately most of them wind up in landfills. We can reduce energy use by recycling.

Ethanol, biodiesel, synfuels. These are some alternatives to oil. Certainly some people talk about these alternatives like they are pie in the sky. I don't believe we're capable of eliminating our full need for oil, but we can use these to greatly reduce our need for oil. We must move forward with technologies to produce these alternatives. There is no other choice.

In looking at the article, the writer points out that if we make advances in alternative fuels then the price of oil will likely drop, which is likely true. Let's say our reduced demand for oil results in an overall gas price of $1.50 (oh the days so long ago when the precious liquid was at that price). If we're paying $3 for ethanol, biodiesel, etc, then we would be vastly overpaying wouldn't we? Or would we? We're not adding in the cost of oil wars, terrorism, or kissing peoples asses who hate us. That $3 for ethanol would be spent in the US, stays in the US, and would be taxed in the US. It would create American jobs, not Saudi or Iranian jobs.

I would rather pay $3 a gallon for fuel if the money stayed here than pay $1.50 to the Saudis. It would allow me to sleep better at night, knowing that we've reduced the value of their oil and thus reduce the terrorism they create. If fuel is $3 a gallon, I have the incentive to use it more efficiently than I do if the price is $1.50, (which at the price is way too low for the additional external costs).

We must forward with measured steps, but most of all we must move with urgency.