“America is addicted to oil”. I think that we have all heard that phrase and many of us have thought that it was true. I will admit that we sure do use a lot of petroleum (22% of all petroleum worldwide*) and we definitely love our cars. However, the phase has always annoyed me, because I thought of it as a bit too hysterical and emotional. Yes, we have a problem in that we use too much, but it isn’t like we are taking dangerously foolish actions just to ensure that we get the next barrel. Addicts are people who ignore their family, friends, and finances just to secure their next fix. Addicts are people who cash out their 401k so they can pump more money into a slot machine. Addicts are people who skip work on a regular basis because they have been drinking too much. This doesn’t describe the US, does it? Up until today, I would have said no.
In the past, I have heard people accuse the US of being addicted to oil, because we go to war to secure it, but I did not find that argument convincing. Some people may believe that these wars are justified and others may say that they are unjust, but this is immaterial as to whether we can accuse the US of being an addict. Addiction is about ignoring, or threatening long-term health in order to find short-term pleasure. The various oil wars have for the most part shown the promise of long-term benefits for the US and perhaps even the populations of the countries that have been invaded and bombed. I would argue that they have been the actions of a country that is disciplined enough and sufficiently in control of its actions.
High petroleum prices are painful, but pain is a good thing when it tells us that we need to make changes.
What has the US done to make me change my mind? The President and the Secretary of Energy have decided to release 30 million barrels of oil from the Strategic Petroleum Reserve. Why was this done? It seems that the reason was to reduce gasoline and diesel prices for a few months. This is the equivalent of cashing out your 401K in order to go on a cruise. The purpose of the Strategic Petroleum Reserve is to ensure a supply of oil during a national emergency when oil is not available at any price. This action is especially dangerous because higher petroleum prices are a symptom of a much larger problem, world oil demand is exceeding supply. There are approaches to solving this issue that are likely to succeed, but it is not by recklessly opening the emergency reserves, which is really just applying a tiny bandage to a dangerous wound. High petroleum prices are painful, but pain is a good thing when it tells us that we need to make changes. One viable approach is to increase supplies by more drilling, enhanced production methods, or better international relations. Another approach would be to reduce oil demand by switching to other sources of energy, using oil more efficiently, or changing our wealthy lifestyle. None of these changes would be particularly easy, but they would be real solutions instead of feel good measures by politicians thinking only about their poll numbers for the next election.
What is so disturbing about the short term thinking shown in releasing oil from the Strategic Petroleum Reserve is that it is yet another example of the national behavior that created our current financial problems. It is the energy equivalent of taking out additional home mortgages in order to buy a new television. It is like sending jobs overseas to make some additional profit for shareholders. It is like consuming without any regard for the future. We are eating the seed corn because we didn’t bother to save enough for the winter. I didn’t want to believe that we are addicts, but like all addicts, I was in denial. America wants cheap oil and it is willing to do some very foolish things in an effort to get it. Like all addicts, we are about to wake up full of regret.
* The US consumed 22% of all petroleum products produced globally in 2009 according to the Energy Information Administration
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