Zero Tolerance For Monopolies?

Tuesday, November 5, 2013

11/01/2013 - Carl Pope, former executive director of the Sierra Club, now senior adviser to Securing America's Energy Future wrote the following op-ed for the Mercury News:

Forty years ago, the Saudi Oil Ministry informed the Secretary of Defense that it would no longer supply fuel to the U.S. 6th Fleet. The OPEC oil embargo had begun. For the next five years, the U.S. made serious efforts to escape monopoly dependence on oil. Then, with the decline in oil prices, we fell asleep.

Even when prices began to rise to the stratosphere in 2004, America kept on snoozing. Whenever voices from the military, who bear the heaviest burden, urge us to end oil's stranglehold on our transportation system, the oil cartel and industry concoct a new theory to put us to back to sleep.

This time, the sedative is the promise that huge, exciting, Saudi-sized oil production in the U.S. will achieve "energy independence."

Increased U.S. oil production, combined with more efficient autos pouring into the marketplace powered by the Obama fuel-efficiency regulations and a revived U.S. auto industry, are indeed lowering the volume of oil that the U.S. imports. But world oil prices have risen so much that the dollars and jobs we export to pay for imported oil are greater than ever. We'll add another $4 trillion to our national debt from importing oil over the next 20 years.

As long as the United States uses almost 20 million barrels of oil each day, increasing our domestic production by fracking a million or two barrels a day — which are the projections — still leaves us importing more oil than we did when the first embargo hit, at a much higher price. And new U.S. oil costs more than $90 a barrel to find and produce, so it only comes to market if oil continues to be unaffordable.

Every American recession over the past several decades has been preceded by, or was concurrent with, an oil price spike. The U.S. economy is tied to the highly unpredictable, cartel-influenced global oil market, which manipulates supply and prices. As long as oil is the lifeblood of the U.S. economy, wherever a specific barrel comes from, our military will be forced to bear the burden of guarding against a supply disruption anywhere in the globe. Oil dependence, at times, requires us to accommodate hostile governments or alter our pursuit of key national security objectives.

We don't tolerate such monopolies elsewhere. We source electricity from hydro, gas, coal, nuclear and now wind, geothermal and solar. If wheat gets too pricey, we buy rice or corn; chicken can replace beef. It's folly that nothing is set up to replace oil in our cars, planes or trucks when there are lots of perfectly good energy sources that could cost less than $100 per barrel.

Whenever oil prices spike, we crowd our underinvested transit systems; let's build them out. Natural gas could power trucks for a fraction of the cost per mile of diesel; electric cars free drivers from the volatile oil market. We just need to make these alternatives the norm.

It's not that oil is imported that is crippling us, or even that it is expensive. It is the fact that it has a monopoly — one our environment, our security and our economy can no longer afford.

After 35 years, it's time for the U.S. to wake up.


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