The Perilous Fantasy of Energy Independence
The paradox of today’s quest for energy independence is that pursuing it actually increases energy insecurity. However much politicians who call for energy independence might prefer it otherwise, the market has chosen oil as a staple energy source. So governments should ignore neither the valid interests of oil exporters, on whom consumers in their countries depend, nor exporters’ reaction to the rhetoric of energy independence or to steps taken to achieve it. Isolationist politicians may not care about other countries, but they should think twice lest they harm their own.
The biggest threats to the world’s energy security are not terrorist attacks or embargoes by oil-producing countries – short-term events that can be dealt with quickly and effectively through various measures, including reliance on strategic petroleum reserves, increases in production, and diversion of oil shipments. Instead, the main threat to the long-term sustainability of energy supplies is the mismatch between investment in additional capacity and energy infrastructure, on one hand, and growth in demand for energy on the other.
Major oil exporters could respond in a variety of ways to political posturing on energy, most of which would exacerbate rather than ameliorate the global energy situation. One of the most plausible scenarios in response to calls by governments and politicians around the world to reduce or even eliminate dependence on oil is a relative decline in investment in additional production capacity in the oil-producing countries.