The Energy Mirage

One of the few “big ideas” John Kerry has put forward is a sweeping federal program to secure energy independence. This idea is by no means new: It has been embraced to varying degrees by every major national politician for the past 30 years. But Kerry’s constant focus on the issue suggests that he, unlike his predecessors, might actually be serious about it. If so, America would be in for a radical economic transformation; a review of his plan, however, suggests that Kerry is offering more hat than cattle.

Making do solely with domestic sources of energy would require either extreme cuts in energy consumption or major increases in domestic production, or both. Last year, America consumed 20.3 million barrels of oil a day (mbd) but produced only 5.6 mbd. Finding a way to cut out almost three-quarters of America’s oil consumption won’t be cheap or easy. Dramatic cutbacks in consumption would be expensive: Industry would be forced to replace the energy it uses with costlier inputs of labor and capital, and consumers would see drastic price increases. The Kerry camp, of course, is full of energy consultants and policy mavens who claim that we can do far more with less, and save money in the process, without any sacrifices. But the old adage that if something sounds too good to be true, it probably is, certainly applies in this case.

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Jerry Taylor

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One of the few “big ideas” John Kerry has put forward is a sweeping federal program to secure energy independence. This idea is by no means new: It has been embraced to varying degrees by every major national politician for the past 30 years. But Kerry’s constant focus on the issue suggests that he, unlike his predecessors, might actually be serious about it. If so, America would be in for a radical economic transformation; a review of his plan, however, suggests that Kerry is offering more hat than cattle.

Making do solely with domestic sources of energy would require either extreme cuts in energy consumption or major increases in domestic production, or both. Last year, America consumed 20.3 million barrels of oil a day (mbd) but produced only 5.6 mbd. Finding a way to cut out almost three-quarters of America’s oil consumption won’t be cheap or easy. Dramatic cutbacks in consumption would be expensive: Industry would be forced to replace the energy it uses with costlier inputs of labor and capital, and consumers would see drastic price increases. The Kerry camp, of course, is full of energy consultants and policy mavens who claim that we can do far more with less, and save money in the process, without any sacrifices. But the old adage that if something sounds too good to be true, it probably is, certainly applies in this case.