There are some phrases that always guarantee voter’s agreement: “money for schools”, “proud of the men and women in uniform”, “healthcare for our kids”.

In recent years the catch phrase has been “energy independence”, the mythological concept of self-sufficiency as way to remove external influences from energy prices. Sometimes driven by xenophobic distortions, the concept finds fertile ground among presidential candidates. In truth, we import about as much oil from the Middle East (25%) as from Canada (22%). But McCain was quick to comment that “by relying upon oil from the Middle East, we not only provide wealth to the sponsors of terror.” Likewise, Obama compared oil producers to “terror-harboring kingdoms”: “they get our money because we need their oil.”

Problem is, even if the United States were energy independent, it would not be protected from spikes in global prices, supply disruptions elsewhere or political problems in distant kingdoms. It’s a matter of basic global economics. As the Saudi oil minister Sheik Yamani once said, “the world is really just one market”.

Obviously; oil prices are set globally: even if all the oil consumed in US came from domestic supplies, “prices would still be just as high today. And the main reason is that domestic prices will rise to the world price.” (Jerry Taylor, interview with NPR, October 5, 2000)

The main ideas to replace foreign oil are threefold:

# Increased oil supply through domestic drilling (Alaska, off-shore) and/or strategic alliances for foreign drilling.

# Increased production of biofuels.

# Alternative energy production (wind, solar, geothermal).

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Domestic supply will not reduce oil or domestic gasoline prices. The two options for drilling (Alaska’s Arctic Refuge and off-shore) are simply not enough.

Using USGS estimates of technically recoverable oil, EIA found that if oil were discovered in commercial quantities, it would take 10 years before a drop of Arctic Refuge oil could first be produced. In 2015, it would only make up 0.06% of world oil production. Even assuming EIA is 4x or 5x wrong, it is still absurdly small.

Even twenty years down the road, when Arctic Refuge oil is at or near peak production, gas prices would be affected by about a penny per gallon. At or near peak production (in 2025), Arctic Refuge oil would make up only 8/10 of 1 percent (0.8%) of world oil production and only 3% of U.S. oil consumption.

The report estimates a reduction of $0.57 per barrel of oil. Assuming a one-to-one impact on gasoline prices, $0.57/42 = $0.014 per gallon. In Table C12 of that report EIA predicts impacts of even less ($0.008/gallon) on motor gasoline from HR 6 (apparently includes the impact of ethanol blending).

The same EIA also found the benefits of off-shore drilling marginal to insignificant: domestic production would increase by only 1.6% by 2012, and 3% by 2030. Again, “because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.”

Another July 2005 report, which optimistically used USGS estimates of technically recoverable oil, found:

“If oil were discovered in commercial quantities, it would take 10 years before a drop of Arctic Refuge oil could first be produced. In 2015, it would only make up 0.06% of world oil production.”

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Biofuels are expensive, not enough to replace oil consumption, actually increase carbon emissions, and have unintended consequences in food prices. In US, the offset in energy by mixing ethanol to gasoline is minimal, between 8-11%.

“All the biofuels we use now cause clearing of natural ecosystems for agriculture. Adding energy production to our current and growing demand for food production inevitably requires more land to be converted to agriculture, whether or not the biofuel is grown directly on that land.”

A recent study shows biofuels either directly or indirectly cause land clearing, releasing more carbon to the atmosphere than what is saved by using biofuels. From a climate change perspective, current biofuels are worse than fossil fuels because they actually emit more greenhouse gases than the fossil fuels they aim to replace, a carbon debt.

By converting rainforests, peatlands, savannas, or grasslands to produce biofuels in Brazil, Southeast Asia, and the United States, we create a biofuel carbon debt by releasing 17 to 420 times more carbon dioxide than the fossil fuels they replace.

The higher usage of biofuels will lead to land being drawn away from other purposes, including food, animal feed or fibre. This could lead to higher food prices for consumers. According to IEA projections, a 5% displacement of gasoline and diesel fuel in the EU would require about 15% of available cropland to produce the relevant feedstocks.

Other unintended consequences include major run-ups in dairy, beef, pork, and poultry prices, along with just about anything that uses corn-based sweeteners and other corn-related products. That’s happening now and will only get worse in the future as corn prices continue their inexorable rise

A new report from the Organization for Economic Co-operation and Development (OECD), an international group with 30 member countries including the United States, warns that increased use of biofuels will cause high food prices, won’t do much to offset petroleum consumption, and is an extremely expensive way to reduce carbon-dioxide emissions. The report adds that biofuels aren’t worth the cost. For various reasons, biofuels will only account for 13 percent of liquid fuels by 2050, doing little to offset petroleum consumption.

“The reduction of greenhouse gas emissions is a primary reason for current biofuel policies but the savings are limited. Ethanol from sugar cane – the main feedstock used in Brazil – reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. But emission reductions are much smaller from biofuels based on feedstocks used in Europe and North America. Biofuels produced from wheat, sugar beet or vegetable oil rarely provide emission savings of more than 30 to 60 percent while savings from corn (maize) based ethanol are generally less than 30 percent. Overall, the continuation of current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015.”

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Alternative energy sources such as wind, solar and geothermal in national levels are still far-fetched. Yet, they would do little to replace oil. 45% of the oil consumed in US is made into gasoline for cars and trucks, yet only 35% of the overall oil is produced domestically. So even if every drop of oil for non-transportation was replaced with wind and solar, domestic production would still not be enough.

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All these solutions are paliative, but dont answer the problem. Still, as long as the public find them attractive, we will hear about them, no matter how unrealistic.

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