What is Energy Independence?

How should American energy independence be defined? The obvious response would be: America producing all the energy it needs. But realistically in the foreseeable future, what is the probability of America attaining that level of energy production? Besides, America producing all the energy it consumes is really is the definition of energy security which should always remain as America’s ultimate goal. Again, how should America define energy independence?

Energy is derived from multiple sources but America’s core energy issue is oil. Oil is foundation on which modern society functions but mankind’s consumption of oil and other fossil fuels is also a primary cause for the imbalance in the exchange of carbon between Earth and Earth’s atmosphere. These facts cannot be denied or ignored. The conundrum confronting Americans is the fact that modern society cannot continue without oil and mankind will suffer or even follow the dinosaur into extinction if current accelerating climate change continues unabated.
Back to defining energy independence. America can for the foreseeable future satisfy its needs for coal, natural gas and other forms of energy except for oil. Based on that premise, energy independence might be defined as America ‘having access to’ all the oil it needs. Note the words ‘having access to’. Why not substitute the word ‘producing’? America may eventually be able to supply its oil requirements without buying off the International market but is it really in America’s best interest to produce all the oil it needs to gain energy independence?

America trades with the rest of the World. If America was to produce all the oil it needs and no longer purchases oil from the World markets, a trade imbalance could develop which makes it economically impossible for American goods to compete in World markets. Americans need to view oil independence as the point at which a disruption in World oil supplies could trigger an economic slowdown but will not result in a collapse of America’s economy. That brings up entirely new issues. If America is to obtain energy independence will America need an oil production regulatory agency?

Early in the 20th century, Texas became America’s leading producer of oil. With the discovery of significant oil reserves in East Texas the price of a barrel of oil collapsed to less than 25 cents per barrel. Texas assigned the task of regulating oil production to the Texas Railroad Commission, (TRC). As part of the New Deal in the 1930’s, the TRC gained control a significant portion of oil produced in other states. The TRC controlled oil pricing by assigning production quotas. In the early 1970s, the TRC allowed America’s oil to flow at 100 percent of production capacity. That was effectively the end of the TRC’s control on America’s oil. As a point of interest, OPEC was originally modeled after the TRC.

The purpose of bringing up the TRC is that America needs to reach the point of oil production which allows America to maintain a ‘production reserve’ which will allow America to block other countries from adversely impacting America’s economy by manipulating oil prices. This production reserve should be used to maintain America’s energy costs at a level which provides an economic environment which encourages manufacturing and other industries to return to America. Without the economy which can be created by America returning to being the World’s manufacturing and industrial center, America will not have the financial resources required to address the atmospheric carbon level which will continue to accelerate global climate change.