Energy Independence: Old Hoax or New Fraud?

The Washington Dispatch Commentary by Steve Chapman May 11, 2003

Presidential candidates sometimes do surprising things, and Joseph Lieberman, who made his name as a "new Democrat," is not one to slavishly follow his party's traditional prescriptions. But who would have thought he'd be borrowing themes from Richard Nixon?

In a major policy speech in Washington Wednesday, the Connecticut senator proposed "a Declaration of Energy Independence" to "put us on a path to the day when we won't have to use one drop of foreign oil." He intends to reduce our dependence on foreign oil by two-thirds within 10 years and end it completely within 20.

Where have we heard that before? In Nixon's Project Independence, announced during the energy crisis of 1973. He explained it in language that sounds eerily like Lieberman's. "Let this be our national goal: At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving."

Maybe this is just proof that in politics, there are no new ideas -- just ideas so old that everyone's forgotten what was wrong with them the first time. Energy independence didn't make sense in 1973, when oil prices were skyrocketing, inflation was raging, and we lived in fear of Arab oil-producing nations. And it doesn't make sense in 2003, when oil prices are dropping, deflation looms, and Arab oil-producing nations live in fear of us.

The notion of national self-sufficiency conflicts with the most unassailable proposition of international economics: Nations don't lose from importing goods; they gain. That's why they do it. We import oil because other countries can find and extract it cheaper than we can. For Americans to insist on producing, at high cost, something we could buy from abroad at low cost is not a recipe for prosperity.

But oil is different from other goods, we are told. "For too long," says Lieberman, "our economy and our security have been at the mercy of foreign producers . . . I'm not going to let foreign countries blow our families' budgets by running up your heating bills and what you pay at the pump."

Even if we produced 100 percent of the oil we consume, though, foreign countries would still be able to run up our energy bills and hurt our economy. If a supply disruption occurs in Saudi Arabia or Venezuela, world oil prices will shoot up -- and so will U.S. oil prices. Why? Because American producers will sell to the highest bidders, whether they're at home or abroad.

Lieberman hopes to achieve self-reliance by spending lots of money subsidizing the use of coal, which we have in abundance. He wants to spend $15 billion on schemes to convert coal into hydrogen, "the cleanest fuel in the universe." Another $6.5 billion would go to research and development on "fuel cells and other innovative technologies to wean us off oil."

That approach makes the same mistake made by President Carter, who burned up large sums on harebrained schemes to extract oil and gas from coal. It assumes federal employees are better able than energy companies to figure out the most efficient sources of energy. They aren't.

But they are good at using tax dollars to satisfy political constituencies. The chief virtue of Lieberman's plan is that it would make him lots of friends in coal states like Illinois, Pennsylvania and West Virginia that the Democrats need to win next year.

He also proposes a sharp increase in fuel economy standards for automakers. But while it may make sense to cut our overall fuel consumption to combat global warming, slapping mileage standards on cars and trucks is the clumsiest method you could find. Every energy economist in America will attest that the cheapest and surest way to do it is to put heavier taxes on oil and gasoline -- inducing drivers to buy more efficient cars, drive less, or both.

Lieberman, like presidents before him, pretends to put the burden on the auto industry instead of consumers. In fact, motorists will pay higher prices for their vehicles, or they'll pay more at the pump. But if the sticker price of a car rises, every politician knows, citizens will blame car makers, not Congress. Lieberman wants us to think we can 1) have energy independence and 2) require no sacrifice from ordinary Americans.

He's wrong on both counts. Thirty years ago, a lot of people thought energy independence was an idea whose time had come. In reality, it was an idea whose time hadn't come, and never will.

Stephen Chapman is a columnist and editorial writer for the Chicago Tribune. His twice-weekly column on national and international affairs appears in some 60 papers across the country.