keys_to_energy_revised2

NPR helps build energy literacy

American politicians often say we should pursue the goal of “energy independence.” But it’s worth asking if achieving what that slogan implies is even possible. And if so, what would “energy independence” actually look like?

Give credit to NPR’s Morning Edition for asking just those questions recently. In a series of penetrating segments, NPR exposed the problems with energy independence – and in the process helped listeners better understand what our real energy policy goals should be.

In one segment, NPR reporter Tom Gjelten questioned if energy independence – a goal that dates back to President Nixon’s 1974 State of the Union address – is a worthwhile pursuit.

“The truth is,” Gjelten noted, “it would be impossible for any country to be totally independent where energy is concerned.”

That’s because the global oil market is effectively one big pool, and prices are set by the global demand of billions of consumers around the world. Even if a country could produce all its own oil domestically, the price for that oil would still be determined by the global market.

There actually is a place, as NPR’s David Kestebaum pointed out in a follow-up segment, “that has achieved this Holy Grail of energy independence.” He was talking about Canada, which produces far more oil than its economy consumes.

And what does energy independence mean for Canada? As I just pointed out, the market for Canadian oil is no different from the U.S. market – oil produced in both countries is priced globally. Energy independence by itself doesn’t make oil and gasoline any cheaper; Canadians pay roughly the same prices Americans do.

But while its domestic economy may not consume all the oil Canada produces, Canadians do benefit in numerous ways from energy development at home. Canadian oil production means jobs, taxes and economic activity; the Canadian Energy Research Institute calculates that domestic energy development will add $3.5 trillion (Canadian) to the country’s GDP over the next several decades.

Canada sees another benefit, as well, in terms of energy security, which is really what we seem to want in these calls for energy independence. Unfortunately, far too often our public dialogue tends to conflate the terms, which undermines energy literacy and sound energy policy.

So it was heartening that Morning Edition delved into the energy security question in interviews with several noted experts.

Their comments put me in mind to recall a talk our chairman and CEO, Rex Tillerson, delivered five years ago on these very topics.

Rex described the push for energy independence as “an elusive effort to insulate this country from the impact of world events on the economy.” He suggested a better path. Nations should pursue a strategy of global engagement that secures energy security by increasing supply diversity.

The way Rex described the global market gives a helpful insight into how we ought to view matters of energy and economic security. “Our global market system essentially creates one vast pool of energy into which all producers deposit and from which all consumers draw,” he said. “Enlarging this global energy pool, not dividing it, draining it, diverting it or damming it up helps lift all energy security boats, including our own.”

Read Rex’s remarks here, and don’t forget to check out NPR’s smart take on issues of energy independence and energy security as well.


  • Worth a deeper look...