U.S. Domestic Oil Policy: The Other Message We Could, And Should, Send

Senator John McCain and many of his supporters have been suggesting of late that accelerating domestic oil production (including off-shore drilling) will "send a message" to the various world markets that the U.S. is ready to take control of its oil production, the offshoot of which is that domestic oil supply will increase, which will therefore decrease prices at the domestic gas pump. That may occur, though the "message" will not be followed by actual substantial increases in oil output from domestic sources--particularly off-shore drilling ones--for years, which would suggest that short-term benefits will be a bit illusory and perhaps less beneficial to those requiring gasoline than one might expect.

There is, however, another message that such a ramped-up scenario would send, and it would be sent in a loud-and-clear manner throughout the world (and the various major world markets). That other message would be this: the United States is committed to retaining (and perhaps even expanding upon) an oil-reliant economy for decades to come. Domestic or not, oil will remain king insofar as transportation (of people, goods, services, and the like) and some assorted other energy uses are concerned.

The Iranian government, meanwhile, is this week bragging about developing missiles that can obliterate just about any target in Israel and reach just about every Middle East U.S. military base; they're sabre rattling with a vengeance, and ratcheting-up their dangerous game of "chicken" with Israel and the West.

The Russian government, for its part, is continuing to bully several of its European neighbors with its newfound oil wealth; threats of cutting off the oil to certain Russian neighbors have sometimes been followed-through on, with devestating results, in recent years, and, intoxicated with the clout its oil wealth has created of late, Russia invaded British airspace with its (admittedly) aged planes just last year for the first time in a long time.

Venezuela's President Chavez has been working for some time now to use his country's oil money to, among other things, buy decommissioned Soviet-era nuclear submarines in order to restore them and challenge the U.S. in the Gulf of Mexico and the Caribbean Sea; though it has come to nothing yet, it could happen, which could snowball into the development of better-equipped nuclear submarine technology sometime in the future. (The initial submarines, if purchased and put to use, are likely to be a bit of a joke, but a second-generation of submarines may not necessarily be.)

I'm not suggesting that the U.S. has been buying oil from places like Iran and Russia in bulk (though Venezuela is approximately our fifth-largest oil supplier, according to various recent estimates), but the U.S. economy is a monsterously large, trend-setting machine. I'm not particularly sure how many Americans who have not lived and worked outside of the U.S. realize how influential our economy is beyond what they hear in the news--please let it suffice to say that it is still the world's largest and most powerful economy by far (yes, China and India, as well as the European Union, Russia, and Brazil will continue to rise and compete in increasing levels of intensity with the U.S. in the coming decades, but for now the U.S. is still the world's most influential economy).

Indeed, the U.S. economy is watched as closely by people and governments abroad as it is here at home, for obvious reasons (one small example amongst many: several of my British friends are suddenly having trouble selling their homes due to a market bust that began in the U.S., despite the fact that, comparatively speaking, Britain is a very crowded country with a housing shortage that has until recently benefitted homeowners and/or homesellers to extraordinary levels...). Our economy sets worldwide economic trends--it can no longer dictate its wishes to much of the rest of the world, but it is still the case that where the U.S. economy goes, so too does much of the developed and developing world.

Given our influence (and market trend-setting powers), reaffirming U.S. commitment to an oil-reliant domestic economy benefits increasingly petro-authoritarian states such as Venezuela, Iran, Russia, as well as others, regardless of whether or not we actually purchase oil in large quantities (or at all) from those countries. If we "send the message" that we'll increase drilling production over the long-term (and by definition an increase in domestic oil production is necessarily a long-term undertaking), large swaths of both the developed and developing world will follow suit and increase their oil demands. If we don't buy Iranian or Russian oil (or oil from other increasingly worrisome regimes), someone else surely will--just like they are at present, except in increasing quantities. This will provide more money to petro-authoritarian states, which will in turn strengthen their clout on the global stage. It's a simple case of cause-and-effect.

If, on the other hand, we affirm a different commitment, one whose core principle is that, yes, oil will be an energy source here and abroad for quite some time to come, but we are committed to decreasing its share of the energy marketplace in the United States dramatically over the next decade and beyond, it would send another message to the world markets. That message would be this: the U.S. is going to use its inherent creativity and innovation, in concert with the industrious nature of its population, to chart a new course altogether, one that sees renewable sources of energy (wind, solar, ethanol-less biomass, geothermal, hydro-electric, tidal, and, yes, nuclear power) as the wave of the future and the basis of a healthy, sustainable economy. This message would state clearly that the U.S. is going to shake itself free of its oil obsession and create strong and diverse energy companies in markets where oil companies once ruled the roost. It would imply strongly that the U.S. is going to lead in a different way.

That latter, alternative message will not be easy to bring about in a tangible way, given that oil has served developed and developing nations very well for quite some time now, and given that it means that the price of oil will not be encouraged to drop through increased domestic production, at least not until it becomes only one amongst many very influential sources of domestic energy. It means that our present pain at the pump will continue for some time; an Apollo-style energy transformation plan needs to be implemented nationwide (hopefully through, among other things, market incentives to alternative energy providers); and people need to be more conscientious users of energy in the meantime.

But such a message would send shivers down the spines of rising petro-authoritarian states, as well, because much of the world still looks to the United States for future economic trends and incorporates sizeable portions of U.S. economic policies into their own economic strategies (by both necessity and design). If the U.S., in concert with its European allies and other countries around the world, were to deal aggressively with its (and their) oil addiction, much of the rest of the world, including a surprising percentage of the developing world, would follow suit, if not all at once. Money would not cease being transferred to petro-authoritarian regimes, but the overall amount would lessen bit by bit, as would both the domestic and worldwide powers of persuasion of these regimes.

Drilling at home does affect balance of power issues worldwide, which in turn affects our standing and political leverage worldwide. Increased domestic oil production, though seemingly sensible, is, in my opinion, a mistake in the long run. Now let's see if we take the long-term view in the coming months and years, or if instead we surrender to present emotional and political expediency. Much of the rest of the world is rising economically, which means that they are rising in influence, too; the U.S. will remain a very powerful nation, but it will not always have the overwhelming influence that it has at present. Thus, the U.S. must seize the opportunity to wrest rising levels of influence away from some of the more authoritarian oil-producting countries by setting a new domestic (and therefore quite international) energy agenda, and we must do it while we are still the trend-setters.