Missing a chance for energy independence

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A tanker loads Iraqi oil at the offshore terminal at Khawr Al Amaya. (HASAN JAMALI / Associated Press, 2003)

 

Op-Ed by PHIL WENDT

This Op-Ed appeared in The Press Democrat

February 27, 2016

Did we just reach the point of energy independence and I missed the headline? Congress certainly must think so because it just lifted the ban on U.S. oil exports. Unfortunately, we’re still importing oil from the Persian Gulf, which makes absolutely no sense and would seem to negate any idea of achieving energy independence.

In 1973, the Arab oil embargo wreaked havoc with long lines at gas stations nationwide. Never again were we to be held hostage by Arab oil interests. So in 1975 the U.S. banned oil exports in an attempt to increase domestic production and promote energy independence.

Now, after 40 years and two Iraq wars, we still import oil from the Gulf at historic levels, according to government data. This is occurring at a time when domestic oil and natural gas production is at an all-time high.

In the latest budget, passed in late December, Congress lifted the ban on exporting U.S. oil, so our exports and Persian Gulf imports will continue literally as ships passing in the night. This is not the path to energy independence.

We missed perhaps the best chance in decades to reduce our dependence on Persian Gulf oil. Congress and the president had an opportunity to tie increases in U.S. exports to reducing or eliminating Persian Gulf imports.

Eliminating our use of Persian Gulf oil would give the U.S. one less reason to maintain such a significant military presence there, saving both lives and tax dollars. So much for that idea, and so much for extricating ourselves from the Middle East oil conundrum.

Part of the problem is that policymakers operate as if it doesn’t matter where we get our oil. Many analysts believe the global nature of the oil market makes pricing somewhat disconnected from its place of origin. “Anybody who follows the oil industry will tell you that it doesn’t make any difference where the oil comes from,” according to Keith Crane of the RAND Corp. What undermines this statement is that the U.S., by its military presence, significantly subsidizes the cost of oil from the Gulf.

So as long as the U.S. continues to subsidize this market, Crane may be correct, but it really isn’t a free market, not for taxpayers and not for the young men and women we deploy to the Gulf to defend our oil interests.

Continuing to import Persian Gulf oil makes little economic sense. The unstable political landscape requires a costly military presence to protect our national security interest strictly as it relates to oil.

The United States spends so much protecting our interests in the Persian Gulf that a $50 barrel of Persian Gulf crude really costs us up to $150. So where the oil comes from really does matter. And now Congress has locked the U.S. into a continued commitment to subsidizing Persian Gulf oil for the rest of the world.

Did Congress really think that the U.S. oil industry would magically lead us down the path of energy independence if left to its own devices? Oil companies will always act in their own interest. Only a government can operate on behalf of all citizens, and managing the energy resources of our nation and protecting our national security are two of its main purposes. Congress abdicated its responsibility in both these areas.

Where we buy our oil definitely matters. It matters economically, geopolitically and to our national security. American energy independence requires the mandatory elimination of Persian Gulf oil imports. This can only be achieved by implementing a long-term comprehensive energy policy, which must include ceasing Gulf oil imports.

Finally, just think for a moment what our national security profile might look like if we no longer imported oil from the Persian Gulf. We were so close.

Phil Wendt, an environmental scientist, spent more than 35 years working in business, academia and government on energy and water resource management issues. He lives in The Sea Ranch.