I have been considering for some time now why we never incorporated an energy policy that would have enabled us to become energy independent. We have had enough time since the 1970’s oil shock and our politicians have preached it. Brazil has done this but the USA can not! What gives?
We have the resources, the technology and the money to get it done. We even have the motivation as a country. Something just does not fit here. So what is the fly in the ointment? I believe it is the politicians. I have heard bits and pieces of the below explanation so I have put it on paper to make sense of it. I have no idea who initiated some of these thoughts in my head but if anyone knows of this information being published somewhere I would like to read it.
The politicians have a problem. They need to spend money to wield their power, to repay favors, to insert pork and earmarks (bribes) in bills and to appear to be dilligently working in Washington taking care of the countries ills.
At present a great deal of money goes to Saudi Arabia and other governments in the Middle East and a large portion is returned to the treasury through bond purchases. This returned money to the treasury is money that the politicians can spend. It feeds their addiction.
Now if we were to achieve energy independence the price of energy around the world would collapse. Oil could go back to $10.00 a barrel again.
Now let’s look at the results of this from the politician’s point of view (their piggy bank) and we will see that the treasury would no longer be getting money from the previous bond purchasers. These countries would not have any money left over with oil at such drastically low prices. In fact they would be in deficit spending mode very soon after the USA began working on such a goal as the price of oil collapsed.
I do not believe that the tax revenue generated in the USA from the jobs to create this independence would equal the amount of money previously spent by these countries on bond purchases. The result would be a huge net loss in the politicians piggy bank.
However for the sake of argument let’s say it is equal. So why not do it then. The people want it. The country needs it. The politicians would be idolized. The problem is that the countries that purchased our bonds previously would have to start cashing their present bonds in to finance their deficit, pulling money from the piggy bank, a whole lot of money. The politicians would not have money to spend for favors in order to get campaign contributions for thier reelection. Not good for our professional politicians careers.
It would appear that our national security is in jeopardy so professional politicians can keep their jobs. So do not expect energy independence anytime soon.
Houston we have a problem.