Independence vs. Interdependence
Yesterday's Wall St. Journal included this commentary concerning Senator Kerry's repeated references to "energy independence." In the next few weeks I plan to revisit my earlier analysis of the Senator's energy proposals (see my blog of 2/27/04) but I think it's worth touching on this aspect now. As Mr. Tucker indicates in this article, it is just not reasonable to imagine that we will be able to do without oil from the Middle East anytime soon.

While I am enthusiastic about alternative energy, including wind and solar power, and intrigued by the potential of a hydrogen-based economy, I would hope that anyone governing this country--or aspiring to that responsibility--would understand the enormous costs and time required for any such transition and the need to ensure that our current energy supplies remain adequate in the meantime.

Any sensible energy policy should be built around several key principles, including the fact that gasoline will remain our primary transportation fuel for at least the next decade and probably longer, that natural gas is the cleanest and best fuel for power generation, as well as for a number of other stationary applications, and that continued economic growth will require increased supplies of oil and gas, from both domestic and foreign sources. It should also recognize the growing importance of alternatives and the need to help them compete against traditional sources, at least initially. It should include the following kinds of measures:
- Incentives for the development and deployment of alternative energy, particularly in areas in which reaching economies of scale is important.
- Revised corporate fuel economy standards that create a level playing field for cars, SUVs and light trucks, and advanced technology vehicles.
- More rational offshore drilling restrictions that recognize the difference between drilling for oil, with its potential for spills in sensitive areas, and drilling for "non-associated" natural gas, for which those risks are negligible.
- Regulations and incentives to modernize and upgrade our electric power infrastructure to make it more reliable and resilient and less vulnerable to sabotage.
- A fast-track permitting process for LNG import facilities that fairly balances local concerns with pressing regional and national energy needs.
- An impartial, fact-based cost-benefit analysis of oil development in the Arctic National Wildlife Refuge, including environmental costs. This should include preliminary, non-invasive exploration at government expense to assess the true scale of the resources that we are presently choosing to forego.
- Removal of current disincentives for industry to hold higher inventories of oil and refined petroleum products, as a way of partially privatizing the function of the Strategic Petroleum Reserve.

I don't think this is merely the standard oil industry laundry list, and I would also suggest that as part of the energy security debate, many of us may need to reconsider old prejudices. Isn't it just possible that some things that look good for Big Oil might also benefit everyone?