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One Person’s Oil Addict is Another’s Intelligent Consumer

In the last few weeks, rhetoric about America’s oil addiction has resurfaced, years after being pushed by former President George W. Bush.  It is meant to explain the inability of Americans to become energy independent or at least to significantly reduce consumption.  The implication is that consumers are either foolish or brainwashed, and that the government is a slave to the oil industry’s lobby. 

I submit that this claim reveals an ideological bias, as well as a degree of energy illiteracy.  

Such illiteracy is not new and is often battled by economists.  For example, when I was at MIT, one class was taught by an engineer who believed that oil was underpriced because it cost less than mineral water.  I didn’t have the heart to tell him that this is a common misconception:  the prices of the two are completely unrelated.  

Now there is a new litmus test for energy illiteracy, namely the claim that America is ‘addicted to oil.’ Those stating this are either being less than honest (politicians and special interests) or have failed to comprehend either addiction or economics.  For example, why say Americans are addicted to oil, but not food, housing and clothing?  Or cement or steel?  It is easy to compare the traditional types of addiction with the reliance on these substances to see where oil falls on the spectrum.

What is ‘Addiction’? 

Addictive substances typically cause changes in brain behavior, create a sense of euphoria but also reduce productive activity, making citizens less capable and/or less interested in being productive.  They serve primarily to stimulate pleasure and often distort mental processes, creating biochemical dependencies to the point where those consuming the substances sacrifice their careers, livelihoods, families and everything they hold dear to acquire it on a continual basis.  While there are many functioning addicts, there are also huge numbers whose lives have been ruined by their addictions.  (Just watch “Behind the Music” on VH1.)

Steel, on the other hand, is an input for other products, such as machinery and buildings, which are useful and valuable.  No direct pleasure is provided, though many are enamored of structures and machinery (I like trains myself), and people buy it or not as needed and depending on prices.  No one drives into a bad neighborhood late at night to use their last dollar buy steel from strangers.  Yet, it seems that we cannot do without it, and import whatever we cannot produce ourselves. 

So, on the spectrum of goods—psychoactive substances to economic inputs, heroin to steel—where does petroleum fall?  Do we see homeless citizens begging for coins on street corners to fill their SUVs?   Lying to their families about their purchase of premium gasoline?  Losing their jobs because they can’t give up ‘the juice’? 

On the contrary, petroleum is used to transport goods and services, and to move people to work so that they can be economically productive.  It also provides mobility, increasing the freedom of the citizenry significantly over the days of horses and steam railroads, thereby improving their quality of life. 

Many use the charge of addiction to explain consumers’ failure to behave as “experts” believe they should; witness, for example, James Howard Kunstler’s hatred of suburbia and its many aspects, which he blames on cheap oil.  His distain for individual preferences is obvious, and one can imagine him leading a 21st Century Khmer-Rouge-in-reverse, forcing the peasants back to the cities.  

Electric Cars Are No AA Program 

Similarly, the devotees of electric cars—most of whom are unwilling to pay for them without massive taxpayer assistance—seem to feel that gasoline engines were forced on consumers by car makers or “Big Oil.” Daniel Weiss has gone so far as to say:  “one of the reasons why electric cars were abandoned 100 years ago is because the auto companies made a deal with the oil companies and decided to go ahead and pursue that, rather than do batteries.”  It means nothing that, even after a century of development, batteries still cannot compete with the internal combustion engine in economics, range, power, or performance.

The electric car is in fact a Potemkin village on wheels—a high-tech façade that disguises the heavy, dirty industry behind it, both in the manufacture of the vehicles and batteries and the electricity generated to power them.  Given that only the rich will be able to afford them (expensive toys for rich boys), even with substantial tax breaks, the expenditure of government money ($200 million a year in California) to subsidize them is nearly criminal in this time of constrained budget resources.  

Foreign Policy Rationale 

Of course, many also decry oil imports as causing us to pursue an immoral foreign policy, specifically importing oil from disreputable characters or (it is claimed) invading Iraq to secure access to their oil.  Our reliance on imports, the implication runs, makes us vulnerable to political pressure from oil exporters and drives us into foolish wars.  But again, this reflects more an ideological bias than our actual foreign policy history.  

Yes, petroleum is sometimes an issue, but it hardly seems to have an overriding influence.  Recall Nixon’s staunch support of Israel during the 1973 October War (and oil embargo) and the fact that George W. Bush, a Texas oil man with family ties to the Saudi royal family, embraced Ariel Sharon.  Note also American antipathy for Hugo Chavez, even though his country provides us with 10% of our oil imports. 

Alternatively, some analysts argue that the importing more than half of our oil is economically damaging, ignoring the fact that trade is not a zero sum game.  Indeed, oil importers have traditionally outperformed oil exporters economically, partly because they rely on cheap raw material (such as oil) to create manufactured goods.  S. Korea has hardly suffered from relying on oil imports to fuel its economy, nor has Japan, while the countries that rely heavily on oil exports have often failed to prosper.  Should we bemoan the fact that we import cheap oil rather than rely on expensive substitutes, or that we produce manufactured goods instead of raw materials? 

The Oil Lobby Canard 

Both Barack Obama and Daniel Schorr have blamed our lack of an energy policy on lobbyists from the oil industry, a rationalization similar to claiming consumers buy products not because they want them but as a result of advertisers brainwashing them That is, it presumes that “my choice is objective,”and that anyone making a different choice must be brainwashed, rather than simply exercising their own personal preferences.  

No doubt the oil lobby has power, but ask what they have achieved in, say, the last decade?  Did they get the government, under President Bush, to open offshore areas or ANWR for drilling?  Even with Republican governors like Jeb Bush and Arnold Schwarzenegger in power in Florida and California, they did not succeed.  

Conclusion 

What, then, can we conclude about our ‘addiction’ to oil?  It is a totally fallacious concept, promoted by those who have an inherent bias against oil and the oil industry and are seeking to explain the failure of the American public to choose to pay extremely high electricity prices and buy expensive cars incapable of traveling one hundred miles on a single, multi-hour, charge.  The truth is that American consumers have ample choices and have chosen wisely. 

9 comments

1 Jon Boone { 07.21.10 at 10:35 am }

As the journalist Robert Bryce has said, the ubiquity of oil suggests we are addicted to prosperity…. And, except for a few Mullahs around the world and even fewer luddites in various environmental enclaves, everyone else wants on board.

2 Steve C. { 07.21.10 at 12:56 pm }

Not an original thought, but I’ll start being concerned when the critics of my energy choices start living their rhetoric. And I’m not talking about electric cars. I’m talking about living in 1000 sq ft homes off the grid, taking public transportation ALL the time and taking the train, not aircraft. Plus, devoting most of their time to growing their own food.
Our ancestors worked hard and in some cases died in wars to bequeath us a better life with the freedom to make choices. If our “betters” want to go back to living like people did at the turn of the 20th century, they are free to do so. But don’t expect me to go with them.

3 Charles G. Battig, M.D. { 07.21.10 at 5:04 pm }

Unmentioned in all of the above is our growing addiction to lithium, as well as a number of rare earth elements. The lithium addiction is expressed in the battery addiction. The rare-earth-elements addiction is expressed in all the various electric motors addicted to their lithium batteries.

Wall Street has taken note of this and has started a lithium EFT.

Oh yes, lithium is used as a treatment for mental depression, a condition easily slipped into by reading too many blogs.

China will replace the mid-east-oil, dollar sink hole, as we send our borrowed dollars to China to purchase the rare earth elements which they alone seem to have in abundance. The mother lode of lithium seems to be in Peru or Bolivia.

4 Kennedy Maize { 07.21.10 at 5:42 pm }

Would that our policy makers read this work (and Bryce’s latest, Power Hungry). The amount of misinformation, mythology, and fuzzy thinking that pervades most of government (and in both parties) is staggering. Almost nothing that comes out of Washington with regard to energy and power makes any sense, and, frankly, never has. From at least Nixon on, it has been, to quote the Bard, “a tale told by an idiot, full of sound and fury, signifying nothing.”

5 Paul Driessen { 07.21.10 at 8:38 pm }

This superb column ought to be required reading for every member of the Congress, White House, news media, state legislatures and bureacracy. As Mr. Lynch observes, we are no more “addicted” to oil than we are to food, water, clothing and shelter. But our activist and political classes seem to be determined to send us back to some “idyllic” bygone era — and to make us completely dependent on foreign sources for whatever oil they permit us to have … and whatever rare earths and thus “eco-friendly” “renewable” resources they might likewise allow us to enjoy (intermittently of course).

As to carbon footprints, I’d like them to compare our average “gluttonous” footprint to Al Gore’s carbon butt print, or to the total ecololgical footprint of wind turbines, car batteries, solar panels and corn-based ethanol — including lands plowed or mined, water consumed, and all other inputs.

My grandmother used to tell me, “The only good thing about the good old days is that they’re gone.” I for one am not about to trade my lifestyle and comfort for the one she “enjoyed.”

6 Ferdinand E. Banks { 07.22.10 at 1:26 am }

Only one thing missing in this article, Mike. Your usual claim as to how the price of oil will soon fall to the price of snot-rags. As for the addiction to oil, I seem to remember telling the completely dumb Ms Jaffe in Rome that I had once seen a map, published in Washington, which outlined landing zones in the Gulf for marines and paratroopers. American marines and paratroopers, that is. I don’t understand why a map like that would be printed and circulated if there wasn’t an addiction to something by the voters.

The oil thing is too important to start a big philosopical debate featuring a dialogue about ‘choices’ and the like. The price of oil is almost 8O dollars now, and if the global macroeconomy is put in order – which may not happen – our friends in OPEC will see that it exceeds 100 dollars. I’ve always had a warm spot in my heart for OPEC, but not when there is a chance of the oil price being boosted to the level it was in 2008.

7 brad tittle { 07.22.10 at 3:41 pm }

I have heard environmentalists lambast the Truck. They look at the Semi and see a great waster of resources. “Why don’t they use the railroads?” Railroads are ever so much better on resources.

What they can’t understand for some reason is that “They do use the railroads”. They use trucks. They use boats. They use planes. They use them in the most efficient manner possible. The means of determining this is based on a very simple model. MONEY. That semi represents a long tradition of delivering goods to people. It also represents an amazing versatile mode of transport. While there are many things a Semi with a 48 ft trailer can’t move, what it can, cannot be enumerated in an encyclopedia (although an encyclopedia might be a good starting point, since most things listed in an encyclopedia can probably be move by a semi). The semi can make it into the most amazing places. It can deliver it just as many places as it can pick up.

This doesn’t mean that they don’t use railroads. If it makes sense they do it in a heartbeat. There are products that come into Seattle, get put on a train, get off the train in New Jersey (or some other east coast port) and get back on a ship to Europe.

And they make those decisions base on time weighted money.

8 Nick de Cusa { 07.23.10 at 3:21 pm }

I took the liberty of translating this article into French and posting it here : http://www.contrepoints.org/Accros-au-petrole-ou-consommateurs.html (free market news site), to spread the word. Hope that’s not a problem. Otherwise let me know.

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