DEFEND AMERICA, BUY MORE IRANIAN OIL: ENERGY INDEPENDENCE ISN'T A GOOD NATIONAL SECURITY STRATEGY

"Our dependence on Middle Eastern oil is only the flip side of their dependence on our purchases. But given the narrow base of Middle Eastern economies, the power in the relationship is firmly on the side of the oil buyers. If that relationship were to end because of "energy independence," we would give up crucial leverage to control the worst behavior of some of the world's worst regimes."


www.reason.org/commentaries/dalmia_20060505.shtml [link to www.reason.org]

Commentary

Reason.org [link to www.reason.org]
May 5, 2006


Defend America, Buy More Iranian Oil

Energy independence isn't a good national security strategy


By Shikha Dalmia


As the nuclear stand-off with Iran helped push oil prices to near-record levels, President Bush once again declared, "Dependency on oil creates an economic problem for us, and it creates a national security problem for us."

But if Iran's behavior makes the case for anything at all, it is that America should become more – not less – "dependent" on foreign oil. In fact, the best way for America to defuse the so-called Middle Eastern oil weapon is by purchasing even more oil from the region.

The economic case for energy independence has always been nonsensical. It is not possible to shield American consumers from rising prices at the pump simply by replacing foreign oil with domestic oil. Why? Because regardless of where the oil is produced – Oman or Oklahoma – its prices are set by the global market.

The global demand for oil and its ease of transportation have synchronized oil prices everywhere. Therefore, unless compelled by draconian government mandates, no American company that can command $3 a gallon in Oman would sell it for much less in Oklahoma. If war prevents Middle Eastern oil from reaching its global customers, the incentive for American companies to sell U.S. oil overseas would be even greater given the higher prices that it would fetch. War or peace, no amount of domestic production will give us "independence" from the law of supply and demand.

But if domestic production won't ensure access to cheap oil, some believe that it will at least shield us from the kind of geo-political manipulation that Arab countries attempted during the 1973 oil embargo. That, however, is also a myth.

[link to reason.org]

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