As far as price goes, it matters not where the oil comes from. No doubt you understand this. But, from a strategic standpoint, it does. It matters how many days it takes oil to get here from exporters, and it matters the routes it takes to get here, and it matters who it comes from. However, no one can escape the global price, which is the same for all.

China, for example, has done alot to secure supply on this strategic level. It goes to Russia. It goes to Africa. It doesn’t care about price, because it knows it can do nothing about it. It cares about the safety of supply. It also has discovered it can barter for oil. Good idea!

As many highly intelligent people have conducted many studies on this issue over the years, it would be better to hear a candidate talk about the only solution that will ever take: and that’s a transformation to public transport driven by a larger more robust electrical grid, that is fed by new solar, new wind, and new nuclear.

Yes you make good points and I agree with you in what you say. In reality, the doomsday scenarios outlined in my comments are highly unlikely, perhaps pure fantasy. My aim was to conduct in-depth thought experiments that underscore the importance of what might otherwise appear to be trivial. Namely: the effects of our energy on other countries can boomerang back to us much more easily than most would believe from the comfort of their living rooms. Especially the larger and more globally integrated petro-autocracies, their health and stability is vital for our security aswell. Consider what we’ve already learned from Iraq: merely removing a dictator does not guarantee that conditions will improve. Similarly, if america has ANY intention to use energy policy as a lever to force changes within these countries, then we better be ready to help them manage that change. Anything less is in my view both short-sighted and hypocritical. In some ways, America has been the “drug dealer” that, by buying their oil, has kept them hooked on using this easy cash to fund their livelihoods. In essence, they are our Frankenstein. If we want these regimes to improve, we need to work with them as partners to wean BOTH sides off of this crack cocaine called oil. If however we think only of ourselves and fail to navigate the transition with them as partners, then we shloudnt surprised when these cold-turkey former oil-money addicts start wandering the geopolitical sttreets starving and prone to crime as their last resort. I am continually saddened by the degree to which the tenor of foreign policy discourse in the US assumes that other countries are our adversaries rather than partners. Not only is this attitude generally self-centered and xenophobic, it also simply does not reflect reality. We might wish that the word were still a simple place organized according to straightforward us-vs-them Cold War rules, but it simply isn’t true anymore. For better or worse, we’re all connected now. And trying to pull ourselves apart again will necessarily be quite painful – for ALL sides, not just “them.”

Thank the comments you posted on your blog. I suppose you are right that a collapse in the economies of oil-producing states could yield geopolitical trouble. Collapse of any kind often does. The good news is that it seems just about impossible for global oil demand to fall off a cliff. The time lines for seeing effects of conservation and substitution are too long.

However, those who think reducing global demand for oil yields geopolitical benefits are indeed thinking precisely of depriving unfriendly countries of petrodollars and thus sapping their ability to project power.

Economic history suggests that countries with economies heavily dependent on the extraction of natural resources tend to be corrupt, autocratic and face significant obstacles to economic development and industrial diversification. This is sometimes termed the “resource trap” and it’s elegantly explained in a great book that came out this year called “The Bottom Billion,” by Paul Collier.

The resource trap theory suggests that, far from holding resource rich economies together, an abundance of exportable natural resources can hold them down. If the developed world reduces demand for key commodities from resource-trapped countries, it should also consider aid that would foster economic diversification.

Sorry I didn’t see your comment sooner. WordPress flagged it as spam for some reason. Glad I took a closer look.

Looking only at investments with an IRR of 10% or better, McKinsey says that global energy demand could be cut in half by 2020.

It appears to be the area of focus with the highest return on investment.

PT

I wanted to expand on the geopolitical and global economic risks of suddenly declaring “energy independence.” I was going to write it here as a comment, but it became lengthy enough to merit a full-on blog post of my own: http://skirocky.typepad.com/eletters/2008/09/the-hidden-risks-of-us-energy-independence.html