Energy Independence Not Necessary?

Here is a view that I don't understand - 'even if we produce enough oil on this side of the pond to support our own needs, we will still be dependent on others for price control'? - We import 15% of our gasoline now, wouldn't it wise to not do that? We spend over 700 billion dollars on imported oil. Wouldn't it smart to at least keep some of those dollars here in America?

And if we just continue to import a significant amount of oil and gas, given the reduction in our navy that protects sea lanes that is proposed by Obama, and the Chinese securing major oil fields around the world, it sure seems funny that world events will not effect how we depend on oil from foreign suppliers.


Is Energy Independence Realistic?
Source: John Tamny, "T. Boone Pickens Unwittingly Reveals the Absurdity of 'Energy Independence,'" Real Clear Markets, February 3, 2011.

This week's uprising in Egypt that occurred in concert with a minor spike in the price of oil unsurprisingly led to renewed commentary suggesting the United States must achieve "energy independence." But looked at with a more reasoned eye, the events in Egypt exposed the sheer absurdity of the charitably false notion of energy independence, says Real Clear Markets.

For one, the not so notable increase in oil prices was to be expected either way. On the other hand, assuming some of the oil price increase was related to fears of supply shortfalls given the shipping lanes under Egypt's purview, what becomes apparent is that even if the United States were totally oil sufficient, our being that way would in no way shield us from global events that might reduce supply while increasing costs.

Oil is oil is oil, and it's a commodity whose price is discovered in deep world markets.
Much as we might like tonaively fantasize about walling ourselves off from international market realities, we'll never be immune to the activities around the world that impact oil's price.

Of course assuming a major uprising in the Middle East that does include a major reduction of shipments from that part of the world, the United States is poised to weather such an occurrence better than most countries. Not only is the United States the world's third largest producer of oil, it's 11th in the world in terms of proven reserves (Canada is 12th), plus the three countries we import the most oil from -- Canada, Mexico and Venezuela -- are far from the Middle East.

The false god of independence will not wall us off from supply-driven increases, and more important, the waste of human and financial capital necessary to achieve the silly notion would be far more economically crippling than any presumed supply shock could ever hope to be.