Friday, June 24, 2005

War Game

Kenneth Baer discusses the impact of a possible and realistic oil supply disruption.

He writes:

But, as all the panelists -- Democrats and Republicans alike -- said yesterday what is really missing is the leadership to make energy independence and security a top priority.

"Energy independence" is the kind of phrase which sounds nice, but it isn't really a possibility as long as we consume any nontrivial quantity of oil - both for energy and for its other numerous uses. I don't imagine we'll be "independent" as long as there's a drop of oil left in the ground somewhere.

Still, there are two reasons to wean ourselves off oil fairly quickly. The first is that by reducing oil consumption we reduce the likelihood of supply disruptions. The more slack there is global production, the less likely such disruptions could happen.

The second reason is to lessen the impact of such disruptions. And, in this case, it isn't just about reducing the need for oil, it's about increasing the available substitutes for oil. Let's take hybrid cars. While they reduce oil consumption, they still require it. That's a problem. Hybrid cars that can also be charged from an outlet, if necessary, and run without gas for some period would be preferable. Yes, some of that electricity is produced using oil, but not all of it. In addition, in the case of supply disruption presumably electricity generating plants will have more access than the local gas station.

The problem with an oil supply disruption isn't simply that it'll increase the price of energy. The problem is that for large chunks of our economy (commuting/freight transportation/etc...) there simply is no substitute for oil. No oil, car no go, truck no go, plane no go.