Brookings Institute on Fracking and Energy Independence
Sunday, April 29, 2012
Energy Independence - Come on is it really a problem?
Many don't understand the energy picture in the US and don't challenge their leaders about energy policy. Here is why it matters:
1 - We spend huge amounts of our income and wealth on energy. It is something we have to buy to live in our world. Energy gets us to work and to home. It is used to bring us the goods we consume (i.e. food, clothes), it "empowers our workplace", it provides comfort in our shelters. Think about how much you spend on utility bills, gas or alternative transportation, and how much energy cost is built into everything we use in our lives.
2 - Energy cost and availability is unpredictable. This is significant risk to our standard of living and day to day creature comforts. Imagine how our lives would change if suddenly we had less electricity, car gas or natural gas to heat our homes. If there were significant shortages, imagine how costs would increase and how that would impact our ability to buy a new car or take our family to dinner.
The truth is that our country has done a good job in protecting our access to energy at a reasonable cost. In fact, in many cases, our energy costs are less than other western countries in the world. But, have we contained or minimized the risks of changing energy supplies or costs? The answer is no.
3 - The reason it is important that is least discussed is the impact of exporting so much US wealth and income overseas. The simple facts are that we import about half of the daily use of oil. That means that we send to others the cost of half of the crude oil we use. If we use simple math, we import about ten million barrels of oil every day. That 3,650 million barrels of oil every year. At $100 per barrel that is almost $400 billion per year in income and wealth. (For the accountants out there, those numbers can be tinkered with up and down, but the general simple fact is valid.)
Why should you care if we export $400 billion every year for oil?
Two reasons. First, the money we spend overseas goes to people that don't like Americans and the US. They fund terrorists, support our enemies and work against the American people. Think about Iran, Russia, Venezuela and even our "friends" in Saudi Arabia.
These are not easy issues. Saudi Arabia is both a friend and not. While Saudi Arabia supports our interests in many ways, they also work against our interests. There are plenty of cases where their citizens have financially supported our enemies. The export of American dollars and wealth does gain us some influence but also strengthens our enemies.
The second reason that we should care about exporting our income and wealth for energy is that we no longer have what we spend with someone else. The simple truth is that when we send our income and wealth to someone else, we don't have it anymore. If we buy oil or natural gas from an American company or individual, it remains in our country to buy other goods and services. How much better would our standard of living, how many more jobs would we have, and how much more tax revenues would there be if more income and wealth were kept in the US.
A real world example of this is occurring in North Dakota as you read this. Jobs are being created, construction is occurring, and taxes are being paid from the exploration and production of energy products. These jobs are not in Iran or Saudi Arabia.
What would you like to see our country do with another $400 billion every year?
How do we become more energy independent? There are simple facts and simple truths. See a future post.
1 - We spend huge amounts of our income and wealth on energy. It is something we have to buy to live in our world. Energy gets us to work and to home. It is used to bring us the goods we consume (i.e. food, clothes), it "empowers our workplace", it provides comfort in our shelters. Think about how much you spend on utility bills, gas or alternative transportation, and how much energy cost is built into everything we use in our lives.
2 - Energy cost and availability is unpredictable. This is significant risk to our standard of living and day to day creature comforts. Imagine how our lives would change if suddenly we had less electricity, car gas or natural gas to heat our homes. If there were significant shortages, imagine how costs would increase and how that would impact our ability to buy a new car or take our family to dinner.
The truth is that our country has done a good job in protecting our access to energy at a reasonable cost. In fact, in many cases, our energy costs are less than other western countries in the world. But, have we contained or minimized the risks of changing energy supplies or costs? The answer is no.
3 - The reason it is important that is least discussed is the impact of exporting so much US wealth and income overseas. The simple facts are that we import about half of the daily use of oil. That means that we send to others the cost of half of the crude oil we use. If we use simple math, we import about ten million barrels of oil every day. That 3,650 million barrels of oil every year. At $100 per barrel that is almost $400 billion per year in income and wealth. (For the accountants out there, those numbers can be tinkered with up and down, but the general simple fact is valid.)
Why should you care if we export $400 billion every year for oil?
Two reasons. First, the money we spend overseas goes to people that don't like Americans and the US. They fund terrorists, support our enemies and work against the American people. Think about Iran, Russia, Venezuela and even our "friends" in Saudi Arabia.
These are not easy issues. Saudi Arabia is both a friend and not. While Saudi Arabia supports our interests in many ways, they also work against our interests. There are plenty of cases where their citizens have financially supported our enemies. The export of American dollars and wealth does gain us some influence but also strengthens our enemies.
The second reason that we should care about exporting our income and wealth for energy is that we no longer have what we spend with someone else. The simple truth is that when we send our income and wealth to someone else, we don't have it anymore. If we buy oil or natural gas from an American company or individual, it remains in our country to buy other goods and services. How much better would our standard of living, how many more jobs would we have, and how much more tax revenues would there be if more income and wealth were kept in the US.
A real world example of this is occurring in North Dakota as you read this. Jobs are being created, construction is occurring, and taxes are being paid from the exploration and production of energy products. These jobs are not in Iran or Saudi Arabia.
What would you like to see our country do with another $400 billion every year?
How do we become more energy independent? There are simple facts and simple truths. See a future post.
What is Simple about Facts and Truth?
More is simple than you realize. Many important issues facing our country are really quite simple when you simply want to make America great. If you decide to check in here over the next few months, you will have a chance to learn how simple the facts and truth are. The reason I write on these topics is to offer readers and my fellow Americans a chance to gain an insight on facts and truth on issues affecting America.
America is exceptional and if you don't agree then you will find little of value here. Exceptional does not mean that we should rub other countries nose in it. It does not mean that America should be condescending or demanding. Simply put - we should not be apologetic about our exceptional-ism. Be proud of what we are and what we stand for. The world is a better place when we respect all views and peoples.
In coming posts, I will offer several types of information for your consideration. 1) I will try to inform about important issues facing the country and the coming elections. Key issues for our country are education, economic growth, energy independence, terrorism, federalism, federal spending - debt and deficits and voter empowerment. 2) I will focus on information in the media that I think helps frame these issues. 3) I will encourage you to be informed, to vote and to demonstrate that this country exists to serve the interests of its people, not the other way around.
One last think you can expect. The educators, politicians and the media have failed in informing the public to make wise choices in self governance. Examples and criticism will be free flowing on this topic so that any reader can call out their favorite educator, politician or media outlet.
I welcome your comments and disagreements. However, I will not tolerate rudeness or comments that are clear attempts to mislead readers. No demagoguery here. For the record, I don't like labels as they oversimplify important ideas and people. But, if you must, I tend to think like a conservative and libertarian and vote Republican most of the time.
Lets get to the simple facts and simple truth.
America is exceptional and if you don't agree then you will find little of value here. Exceptional does not mean that we should rub other countries nose in it. It does not mean that America should be condescending or demanding. Simply put - we should not be apologetic about our exceptional-ism. Be proud of what we are and what we stand for. The world is a better place when we respect all views and peoples.
In coming posts, I will offer several types of information for your consideration. 1) I will try to inform about important issues facing the country and the coming elections. Key issues for our country are education, economic growth, energy independence, terrorism, federalism, federal spending - debt and deficits and voter empowerment. 2) I will focus on information in the media that I think helps frame these issues. 3) I will encourage you to be informed, to vote and to demonstrate that this country exists to serve the interests of its people, not the other way around.
One last think you can expect. The educators, politicians and the media have failed in informing the public to make wise choices in self governance. Examples and criticism will be free flowing on this topic so that any reader can call out their favorite educator, politician or media outlet.
I welcome your comments and disagreements. However, I will not tolerate rudeness or comments that are clear attempts to mislead readers. No demagoguery here. For the record, I don't like labels as they oversimplify important ideas and people. But, if you must, I tend to think like a conservative and libertarian and vote Republican most of the time.
Lets get to the simple facts and simple truth.
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