5 Myths About Breaking Our Foreign Oil Habit

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By Robert Bryce
Sunday, January 13, 2008

With oil prices still flirting with $100 a barrel, everyone is talking about the need for "energy independence." Late last year, President Bush signed the Energy Independence and Security Act of 2007; Sen. John McCain has declared, "We need energy independence"; and Sen. Barack Obama has called for "serious leadership to get us started down the path of energy independence."

This may all be good politics. But the idea that the United States, the world's single largest energy consumer, can be independent of the $5 trillion-per-year energy business -- the world's single biggest industry -- is ludicrous on its face. The push for energy independence is based on a series of false premises . Here are a few of the most pernicious ones.

1 Energy independence will reduce or eliminate terrorism.

In a speech last year, former CIA director R. James Woolsey Jr. had some advice for American motorists: "The next time you pull into a gas station to fill your car with gas, bend down a little and take a glance in the side-door mirror. . . . What you will see is a contributor to terrorism against the United States." Woolsey is known as a conservative, but plenty of liberals have also eagerly adopted the mantra that America's foreign oil purchases are funding terrorism.

But the hype doesn't match reality. Remember, the two largest suppliers of crude to the U.S. market are Canada and Mexico -- neither exactly known as a belligerent terrorist haven.

Moreover, terrorism is an ancient tactic that predates the oil era. It does not depend on petrodollars. And even small amounts of money can underwrite spectacular plots; as the 9/11 Commission Report noted, "The 9/11 plotters eventually spent somewhere between $400,000 and $500,000 to plan and conduct their attack." G.I. Wilson, a retired Marine Corps colonel who has fought in Iraq and written extensively on terrorism and asymmetric warfare, calls the conflation of oil and terrorism a "contrivance." Support for terrorism "doesn't come from oil," he says. "It comes from drugs, crime, human trafficking and the weapons trade."

2 A big push for alternative fuels will break our oil addiction.

The new energy bill requires that the country produce 36 billion gallons of biofuels per year by 2022. That sounds like a lot of fuel, but put it in perspective: The United States uses more than 320 billion gallons of oil per year, of which nearly 200 billion gallons are imported.

So biofuels alone cannot wean the United States off oil. Let's say the country converted all the soybeans grown by American farmers into biodiesel; that would provide only about 1.5 percent of total annual U.S. oil needs. And if the United States devoted its entire corn crop to producing ethanol, it would supply only about 6 percent of U.S. oil needs.

So what about cellulosic ethanol, the much-hyped biofuel that can be produced from grass, wood and other plant sources? Many in Congress believe that it will ride to the rescue. But the commercial viability of cellulosic ethanol is a bit like the tooth fairy: Many believe in it, but no one ever actually sees it. After all, even with heavy federal subsidies, it took 13 years before the corn-ethanol sector was able to produce 1 billion gallons of fuel per year. Two and a half decades elapsed before annual corn-ethanol production reached 5 billion gallons, as it did in 2006. But now Congress is demanding that the cellulosic-ethanol business magically produce many times that volume of fuel in just 15 years. It's not going to happen.

3 Energy independence will let America choke off the flow of money to nasty countries.

Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Ch¿vez's Venezuela. But the world marketplace doesn't work like that. Oil is a global commodity. Its price is set globally, not locally. Oil buyers are always seeking the lowest-cost supplier. So any Saudi crude being loaded at the Red Sea port of Yanbu that doesn't get purchased by a refinery in Corpus Christi or Houston will instead wind up in Singapore or Shanghai.


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