Since the oil crises of the 1970s, every U.S. president has in some form or another proclaimed “energy independence” as a goal of American energy policy. The policy aimed to reduce dependency on foreign oil following the gasoline rationing, long lines at the pump and spiking prices that resulted from the 1973-74 oil embargo and the 1979 Iranian revolution. Along with the creation of the Department of Energy, the Strategic Petroleum Reserve and a buffet of efficiency standards and other mandates, the nation implemented a ban on crude oil exports to ensure American oil was available for use by Americans.
Here’s the problem: Energy independence is meaningless as a metric that affects consumers. The price of oil reflects its global scarcity, not its source. Even if we produced all of our own oil, the price at the pump would be just as affected by world events as if we didn’t produce a drop. U.S. policy can affect gasoline prices only by changing the intersection of supply and demand of the entire global market.
By ignoring the market realities, government leaders often employ expensive policies in the name of pursuing this so-called energy independence. Everything from vehicle efficiency standards to domestic oil production tax breaks have been found to be vastly inefficient compared with simply letting the market work (though there are other good reasons for reducing demand for gasoline). That we employ ineffective strategies to pursue a goal that doesn’t help most Americans’ wallets only adds insult to injury.
Historically, Republicans have assailed Democrats for embracing policies like these where the costs exceed the benefits, undermining market forces. But now, the Republican party has gone even further with a new, emptier and more self-defeating slogan: “energy dominance.” Beneath the rhetoric, it’s a policy agenda that simply aims to make America’s fossil fuel producers profitable even if it means completely dismissing the market and fleecing taxpayers. Here’s how…