U.S. no longer focusing on energy independence
Copyright ¸ 2000 Nando Media
Copyright ¸ 2000 Scripps Howard News Service
By BOB VON STERNBERG, Minneapolis-St. Paul Star Tribune
(April 8, 2000 2:19 a.m. EDT nandotimes.com) - In 1973, when the Organization of Petroleum Exporting Countries rocked the U.S.economy for the first time, federal officials vowed to break the grip of oil imports and increase reliance on U.S.-produced oil. That refrain was repeated when OPEC struck again seven years later.
Now, in the wake of another OPEC-induced spike in oil prices, there has been scarce official talk about self-sufficiency - despite the fact that oil imports are at an all-time high.
The difference in reactions reflects the fact that as the nation's economy has become increasingly globalized, the place where oil is pumped out of the ground has become less important, industry analysts and economists say.
It also reflects the reality that the United States has essentially no hope of being able to pump enough oil to meet its needs at anything resembling a reasonable price.
"The issue of imports being a bad thing has simply gone away," said John Atcheson, a federal energy analyst for 20 years. "If it's cheap, which it has been, that's fine. It doesn't matter where it comes from. It's a totally utilitarian approach: Get the most you can for the least
cash."
But Atcheson is among those observers, largely energy-conservation advocates, who have argued to little effect that imports should still matter. Increasing fuel efficiency and energy conservation could cut the nation's overall oil bill while producing a cleaner environment, these observers say.
Those were secondary arguments made by President Nixon when, responding to the OPEC embargo, he issued a call for self-sufficiency in late 1973. He dubbed the effort "Project Independence," challenging the nation to be self-sufficient by 1980. It was a time when many experts warned that the world would run out of oil within a few decades, with prices reaching as high as $80 a barrel.
Those shortage fears have faded, and the price of oil has never come close to such an astronomical level (it currently costs about $26 a barrel).
In 1973, the United States imported slightly more than 2 million barrels of oil a day, roughly one-third of the oil used by the nation. By 1980, imports had risen to more than 5 million barrels a day - nearly 40 percent. Now, the nation imports about 8.5 million barrels a day,representing 60 percent of the oil being consumed.
Those imports have been the single biggest contributor to the nation's trade deficit, which reached a record $28 billion in January. Oil accounted for nearly 30 percent of the deficit.
The dependence on foreign oil can be measured in other ways. The Energy Department has estimated that price manipulation by OPEC cost the U.S. economy nearly $4 trillion between 1979 and 1991, about as much as was spent during that period on the defense budget. The department also has calculated that the government spends about $50 billion a year to protect the oil fields of the Middle East.
The Clinton administration has acknowledged that military muscle to keep the oil flowing is more essential than energy self-sufficiency. In a blueprint on national security in the 21st century published in 1997, the White House concluded that the nation "must remain ever vigilant to ensure unrestricted access to this critical resource. In the (Persian) Gulf, where global access to critical resources is key, we will continue to demonstrate U.S. commitment and resolve."
That oil imports have become something of a yawner issue is a tribute to Americans' growing understanding of the global marketplace, said Jerry Taylor, natural resources director of the Cato Institute, a Washington, D.C., think tank that promotes free-market policies.
"The reason people haven't gotten hysterical this time is because Americans have gotten a bit more sophisticated than they were 20, 30 years ago," Taylor said.
In the global market where oil is traded, "it doesn't matter how much we import," he said. "It's irrelevant because if OPEC decreases production, it's going to increase prices even if we didn't import a drop. West Texas intermediate (crude oil) will go up along with everywhere else. A debate about oil imports is only politically symbolic at this point."
Alan Nogee, energy program director for the Union of Concerned Scientists, disagrees. "The question is, when our elected officials will wake up and talk about this?" he said. "The danger here is that complacency could eventually hurt us economically and environmentally."
Groups such as the Union of Concerned Scientists and the Alliance to Save Energy have tried to use the recent oil-price run-up as a platform to push higher fuel-efficiency standards, advanced vehicle technology and expanded conservation programs.
From the other end of the spectrum, the oil industry and its congressional allies are pushing for more domestic production offshore and in Alaska's Arctic National Wildlife Refuge. So far, Congress has not acted on any proposals triggered by the price increase.
Short of any significant cutbacks in Americans' oil use, future increases in imports are probably inevitable as domestic production declines
every year.
"We have the reserves, but they would cost so much compared to the current price of oil that anything like self-sufficiency probably isn't achievable in a reasonable time frame," Nogee said.
Atcheson argues that aggressive investment in alternative energy sources could pay off handsomely, both by cutting pollution created
when petroleum is burned and eliminating the uncertainty inherent in the world's oil market.
"There's still political and economic dangers in our choice to import so much oil," Atcheson said in an interview. "But the question of supply isn't the cutting issue anymore. I think we'll pollute ourselves to death before we run out of oil." |
