Energy Security Breakdown: How Thorny It Is

Then there’s the matter of “blood for oil.” Contrary to Bush administration claims, Alan Greenspan, chairman of the Federal Reserve when the United States invaded in 2003, wrote in his memoir that “the Iraq War is largely about oil.” Explaining the remark, Greenspan said in the run-up to the war he saw “clear evidence the Iraqi leader was moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day passing through.” Greenspan said he told the administration that Saddam Hussein’s removal was “essential.”

The real divide in the energy security discussion comes in how to deal with the pernicious effects of relying on foreign oil. This fuels fights on domestic oil production and government subsidies for green technologies and nuclear energy; on how to mitigate climate change and other environmental impacts; and on the wisdom of gasoline taxes and market-correcting mechanisms like a carbon tax or cap-and-trade. In many ways the arguments cleave on the age-old question of the role of government – in this case, on how far government should go in shaping energy markets.

After the president’s March speech, in which he set a goal of decreasing oil imports by one-third, Kenneth P. Green of the American Enterprise Institute more or less summed up the conservative reaction: “affordable and abundant energy is vital for America’s future; fossil fuels are cheaper and vastly more abundant than alternatives; energy transitions take decades and are best driven by markets; and government cannot pick winning and losing technologies – all it does when it tries is waste taxpayer dollars, weaken the economy and kill jobs.”

U.S. Army, net-zero energy use

image via U.S. Army

The problem with that, some say, is that it ignores market realities.

“The embedded infrastructure of our fossil fuel networks are too great to overcome simply by letting the market take care of everything,” Tyson Slocum, director of the Energy Program for the left-leaning policy watchdog Public Citizen, said in an interview. Slocum was referring to the physical infrastructure of pipelines and transportation systems – and the political infrastructure. “The fossil fuel and nuclear industries have entrenched, powerful lobbies, and they receive massive subsidies, totaling billions of dollars annually.”

The very tactics that conservatives dismiss as “picking winners and losers” – investments in renewables as well as incentives for their adoption – are in fact measures that level the playing field, Slocum and other liberals say. For instance, they love the president’s support for electric vehicles, even if EVs figure to represent a small fraction of the transportation sector for years to come. The centrist Brookings Institution noted that “achieving the president’s target of 1 million electric vehicles by 2015 will be remarkable, but insignificant next to the 260 million vehicles already on the road,” but still called it “a laudable, realistic first step in curbing oil consumption while helping to achieve his goal of reducing oil imports by one-third by 2025.” Similarly, though its preference would be for a higher gasoline tax, Brookings backs the president’s “politically palatable” push to hike automobile fuel-efficiency standards to perhaps as high as 62 mpg by 2025, a move conservatives see as meddlesome, ineffective and potentially deadly.

“You’ve got to have the incentives for renewables and alternatives to overcome the advantages fossil fuels have in an economy that’s been based on fossil fuels for more than a century,” Slocum said.

That’s one way to approach the issue – but Jerry Taylor has another idea. “How about getting rid of all the energy subsidies?” the CATO Institute senior fellow suggested in an interview. “Oil, gas, coal, nuclear, renewables – right down the line.”

Taylor’s libertarian critique offers a provocative counterpoint to the familiar left-right energy security debate. He begins by rejecting the narrative that gave rise to the whole “energy security” concept, arguing that price controls imposed by President Nixon in August 1971, which prevented oil companies from passing on the full cost of imported crude oil to consumers at the pump, were the chief cause of the gasoline shortages of 1973.

“The embargo story is a very useful myth, for people on both the left and the right,” Taylor said. “It justifies all sorts of interventions. On the left it’s used to justify subsidies for solar and wind, which aren’t competitive on their own…. From the Republicans, you hear arguments for more drilling, but also for subsidies for nukes and ethanol and on and on. They talk about an ‘all of the above’ strategy, which really seems to be a way to get the taxpayers to support the entire energy industry.”

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.