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March 21, 2008

There’s a word for Energy Independence: Poverty

by tarran

One of the hot topics in this campaign is a call for “energy independence”. All the candidates for president, with the exception of Ron Paul are for it. The vast majority of the candidates for Congress are for it too.

Essentially, the proponents are arguing that if people living in the U.S. bought less oil from people living outside the U.S., there would be much less reason for American soldiers to be sent to go fight in the Middle East, and Middle Easterners would have less money with which to fund attacks on Americans. Additionally, the supporters all seem to believe a largely unspoken mercantilist argument that by not buying oil from foreigners, Americans are better off since wealth stays within the borders of the nation.

The supporters argue that to achieve this, the U.S. government should, through a mixture taxes and subsidies, encourage people to either produce oil domestically, or to develop alternate sources of energy.

Let us examine this idea using a reductio ad absurdum. Imagine we did not simply stop at energy independence for the United States, but rather required each state to be energy independent. Imagine if the Federal Government outlawed the transport of any electricity, any fuel oil and any wood across state lines. What would be the result?

At least they aren't dependent on foreign oil.

At least they aren’t dependent on foreign oil.

Well, California and Alaska would be awash in cheap energy, but what would people in Vermont do? Should they send children out in to the forest every day to collect the days firewood? Should they huddle in their homes through the harsh winters carefully rationing out the year’s chopped wood so that they can survive through to the spring thaw?

Why stop at energy? Why not make people be clothing independent? Surely we need to become food independent as well?

Why stop at states? Why not continue to make people freer by making them independent of each other? Why not make each person responsible for producing their own food, their own clothing, their own energy?

Of course, people living in Alabama would have to give up maple syrup, and we living in New England might have to limit our consumption of table sugar and salt to very special occasions as they would become ultra-rare luxury goods. Once again the poor would be reduced to going bare-foot, and clothing would become precious again.

So called “self-sufficiency” has been proposed many times in various guises; The North Korean juche program, the American unions’ “Buy American” campaign of the 1980′s leap to mind. In every case it leaves the practitioners worse off. Deprived of purchasing goods from the lowest cost producers, people are forced to go with higher cost producers, thereby limiting the purchasing power of their own production. The extra cost results in everyone (except for the lucky guy whom people are forced to do business with) being poorer. Their hours of labor buy them fewer goods and services. It is no accident that countries whose economic policies are intended to foster “economic independence” tend to be very poor.

Even though the politicians are not attempting to outlaw oil imports outright, the subsidies and economic interventions they are proposing are destructive. The ethanol subsidies are destructive to farmland and are raising the price of food. The government grants for energy research divert money out of the financial industry that would otherwise be invested in more profitable uses. The result is that what is produced is not as closely aligned with what people want to consume.

There is nothing wrong with the proponents of energy independence calling for people to voluntary avoid consuming petroleum products. There is nothing wrong with the proponents advocating for research and development of new forms of energy to replace the petroleum industry. But in using violence inherent in government action to force people to follow their commands, they are making their countrymen worse off.

We should not be supporting the politicians who pander to this movement.


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7 Comments

  1. Saw an interesting article awhile ago about a pizzeria owner whose flour prices have doubled because of the price of wheat…thanks in large part to ethanol subsidies. While that’s good news for many of my company’s clients (several of whom are farmers) that sucks for everyone else. Actually, since farmers have to eat as well, I guess that sucks for them too.

    People who whine about our “dependence” on foreign oil are almost as annoying to me as people who like to infer that somehow oil exporting countries are evil for acting in their own best interests because they’re restricting “the world’s” oil supply.

    Comment by UCrawford — March 21, 2008 @ 5:10 pm
  2. all anyone has to do to point out what the Federal govt does about “alternative energy” is to look at the disaster of government mediated ethanol. $10B has gone to Archer-Daniels-Midland since 1980 to research it. Some accounts have the total industry subsidy at over $37B. after all this money, i highly doubt ethanol is a net energy gainer yet, whether it be corn or even switchgrass. the USDA will tell you it’s a %30+ energy gainer: http://www.transportation.anl.gov/pdfs/AF/265.pdf . bull…shit. and finally, any feedstock for this process (which is biorefined using enzymes) will still depend on petroleum based activities for input energy. i.e., growing the feedstock. that’s whether you’re growing the rest of the plant for food or whatever you’re doing.

    but the lesson here remains that the industry is unviable absent taxpayer money for capital. that means the industry is unprofitable in the real world. but the real question now, after $37B+, is what is and what would happen with any patents ADM gained or any other subsidy recipient gained since the subsidies began.

    there is no doubt that companies involved generated patent worthy items involving enzymology products and fermentation engineering products. there should have been an agreement between the govt and the companies that profits or royalties derived from these patents would themselves be taxed and sent directly to each taxpayer on a quarterly basis. otherwise, we paid for these companies’ profit.

    Comment by oilnwater — March 21, 2008 @ 9:01 pm
  3. Doesn’t this clearly assume that people will become poorer while remaining consumers of products without beginning to produce anything? Don’t forget past societies, where artisans held complex skills and in modern language (small businesses), and made their own way in one way or another. Maybe you are extrapolating today’s middle class to a world of energy scarcity: there have been few times where so many people would have gotten away with consumption without production of good or services. Why are we to assume that everyone in the future will have the same learnt helplessness and inability to learn trades or skills and profit from them?

    This is a pretty negative assessment of ‘energy independence’, and considering that energy has to come from somewhere, continuing with dependence is really just exporting the problem to others. How then is this supposed to be any better than ‘energy independence’? I agree that such a move certainly would set people back a long way back in developmental terms; but, if we don’t do that, then maybe continuing with the status quo will continue what we are already seeing: global pressures on all forms of energy, resulting in increased demand across the board. So, we have the choice of doing nothing to decrease dependence on imports (not solely in America) therefore using less net energy in transporting energy itself (and therefore condoning some areas to poverty, or to have local energy independence which will probably still result in poverty, but only because that is an equal state of affairs in comparison to what you have been describing as the status quo in America and the West…taking energy (and labor) from where it is cheap (ie. mostly the third world), blessing it with the golden seal of ‘free markets’ and giving it to the rich is not a legitimate response; when an equal distribution of local energy would culminate in widespread poverty but without the coercion and profiteering that accompanies global energy supply.

    Comment by lockie — March 27, 2008 @ 3:33 am
  4. Lokie,

    People of course will produce less: energy is a major factor of production. When energy is harder or more expensive to acquire, people will use it less and therefore be less productive. If you suddenly made trees hard to come by, what do you think that would do to the furniture making industry?

    The effect is also completely independent of whether the vast majority of people earn their keep by running enterprises for themselves, or from selling their labor to large businesses.

    As to exporting a problem, what the hell does that mean? :) Think about it. I purchase the bread I eat from a grocery store. Does this mean that I am exporting the problems of bread production to someone else? I guess you could say yes, since I don’t have to deal with the problems of making bread. I can let an expert handle it and concentrate on the things I do best. this is not a bad thing but a good thing! Let the guy who wants to tackle the problems inherent to producing oil take the job on, and I can tackle the problems inherent to writing computer programs.

    You seem upset with the increased demand for energy and manufactured goods. That is a good thing. It means people are getting wealthier. And no, it does not mean that one group of people are getting wealthier while everyone else stagnates. Rather people are getting wealthier across the board wherever they are not saddled with a government trying to strangle trade or in the middle of a war.

    Nor is the energy being “taken”. The oil that is consumed is being paid for. The guys with the oil get a nice amount of money in exchange for selling it. Yes, the U.S. and British government have done some pretty nasty and violent things to make sure that their friends were exercising this ownership, but that can be remedied by ending governmental interference, and letting the incompetent owners go bankrupt and sell their stuff to a new crop of would-be oil producers.

    Again, I can see no rational argument that would doom people in vermont to shivering around wood furnaces while people in Saudi Arabia are forced to do without maple syrup while sitting atop oil which nobody will buy.

    Comment by tarran — March 27, 2008 @ 8:04 am
  5. Thanks for replying Tarran, it’s an interesting and important topic you are writing about.

    I agree that energy is a major factor of production: no electricity, no aluminium (etc etc). Okay…I think what is getting confused here is the idea of energy independence no matter how great that usage is, and an independent energy usage that is equal (roughly). The problems you have pointed out with the idealistic ‘energy independence’ movement may also apply to energy dependence. My point is that, barring new emergent technologies (hydrogen, solar, nuclear and thorium reactors [http://www.cosmosmagazine.com/node/348] come to mind) we are in for a bit of bad luck energy wise, so some form of change in energy policy is guaranteed (if those conditions are met, obviously).

    My point on artisans is not that because they produce something their energy usage doesn’t matter, it does. I was thinking more along the lines of the carbon footprint (or energy footprint here; relatively equal since most of our energy at the present moment produces carbon). And specifically, why the west or any other group had an entitlement to more of it than others. As to exporting a problem, by example I mean my own country, Australia, exporting coal and uranium without picking up any of the costs such as increased carbon emissions. Now, they don’t burn or use it, but regardless it will be done. This is a larger point which I don’t really feel is worth tackling here, but the main point I was trying to make was that in a world of expensive electricity and energy, it will be increasingly costly to import and export (barring of course a return to sailing boats heh). I was also thinking about previous treatment of third world countries by the west, such as the Bopal incident or the current situation in Iraq where oil is sold (though nobody would be surprised if America just took the oil as ‘reparations’ for reconstruction efforts in the recession). I was not really making a wider point about the division of labor in the role of import/exporting, but was trying to imply that in an energy scarce world, as you said, people will only do what they can. Therefore, less energy equals more local activity and less dependence on foreign sellers (though historically this has been achieved of course, and it may again develop through sea-trade and land trading via something similar to the Spice Route through Asia/Europe). Anyway, I meant only to say that, to take your example, if people in Vermont were using only their share of energy ‘footprint’ or less (ie. divide approximate ‘total energy’ by 9 billion, much as the carbon footprint is something like 1.6ha) then that is just plain responsible of them to take no more than their share. I also agree with your point that globalization and capitalism works to ensure that people with oil (or products) will sell, and people without oil will buy…and both win. My view is that since oil is a finite resource, this will high-energy method of international exchange might come to an end….and then Vermont might just have to huddle, and Saudi Arabia might just have to give up on maple syrup. :) I know this is a bit strange, but it just seems to be an emerging trend to me, and if I’m wrong, well, that’s life. :) Hope this clarifies what I said.

    Comment by lockie — March 28, 2008 @ 2:12 am
  6. Oh, and i can’t seem to edit my post…and I just found this via reddit.com, as an ironic example of how energy independence easily transmutes into industrial processes. Kind of interesting, kind of depressing (given the state of modern factory farming, but lets not get bogged down there).

    Comment by lockie — March 28, 2008 @ 2:14 am
  7. Oh, and i can’t seem to edit my post…and I just found this via reddit.com, as an ironic example of how energy independence easily transmutes into industrial processes. Kind of interesting, kind of depressing (given the state of modern factory farming, but lets not get bogged down there). http://blog.modernmechanix.com/category/animals/animals-for-profit/

    Comment by lockie — March 28, 2008 @ 2:15 am

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