The position of the Phalanx, vis-à-vis dependence on foreign energy resources is well known to regular readers. For some time we have argued that our dependence on foreign oil has made our country especially susceptible to the whims of foreign tyrants. In our dependence we are also constrained in our ability to view the global environment in a truly objective light. Thus the Middle East, receives a disproportionate share of US time and focus, while Asia (excluding China and Japan), Latin America Africa and Eastern Europe are virtually ignored. Tyrants like Hugo Chavez, hold the fate of our economy in their hands, endless social strife, civil wars and military coups have crippled us. In our particular dependence on “allies” like Saudi Arabia, we fund the very terrorists who seek to annihilate us.

Sadly, not everyone recognizes the threat foreign oil dependence has posed and will continue to pose for America. Fortune editor, Justin Fox, contends that energy independence will spell certain doom for this country. In a mindless diatribe, reminiscent of a 3rd grade social studies report Fox argues:

We could have energy independence tomorrow if Congress simply slapped a huge tariff on energy imports (would $250 per barrel of oil do it?). Meanwhile, skyrocketing fuel prices would shift the economy into reverse, throw tens of millions of Americans out of work, and what oil and natural gas we have left under our territory would be rapidly depleted.

Yes, homegrown energy alternatives like wind, solar and ethanol would get a big boost. But the biggest boom would probably be in mining and burning coal -- the dirtiest and least efficient of the fossil fuels, but one the United States possesses in abundance. Meanwhile, the other energy-importing countries of the world would go their merry way, paying vastly lower prices for oil and natural gas and gaining a huge competitive advantage as a result.

To the feeble mind, Fox’s argument is worthy of merit, to the discerning eye, the flaws are readily apparent. To argue that America’s move toward energy independence should begin with the flip of a switch is foolishness of the highest caliber. America didn’t become dependent upon foreign oil overnight and the transition to self-sufficiency will not be accomplished in that manner. Energy independence needn’t, shouldn’t and won’t come at the cost of expensive energy alternatives or a crippling blow to the US economy, which destroys our competitive advantage. Indeed, this is our fate if we continue to do nothing. We are already at a disadvantage, consuming far more fossil fuels than our European and Asian competitors, at present, only China appears destined to make the same mistakes as America, as they recklessly consume more and more oil and natural gas.

Our transition to energy independence must be multifaceted, long range in scope and market driven. A top done, government centered proposal will doom this country to the abyss of bureaucratic incompetence. As we have stated time and time again, the US must develop a comprehensive diversified long-term energy plan. This plan would encompass fulfilling short-term energy needs and meeting long-term goals as well. To accomplish this, the US must not focus exclusively on any single solution. Ultimately, the long term goal must be the elimination of fossil fuel dependence (both foreign and domestic), however, in the short term, we must focus of the scourge that is foreign oil, thus we must significantly increase domestic production, as production increases prices will fall, making them comparable with those from the Middle East, Canada or Latin America. This increase in production must be coupled with significant improvements in energy efficiency, thereby reducing our overall consumption rates, allowing time for a transition to a fossil fuel free driven economy. As long as this country continues to produce gas-guzzlers with 18-mpg ratings we will continue to live at the whim of the Hugo Chavez’s of the world. Here technology can be employed to improve engine performance, be it hybrid of other solutions. Readily available solutions using ethanol and synthetic liquid fuels can also be implemented in short order, requiring no major shift in our existing fuel based infrastructure. Already we have seen a move in this direction as market forces push automakers to develop more fuel sipping engines.

Through incentives provided to firms to produce and consumers to purchase, that transition can be accelerated markedly. As these strategies are put into operation, we must re-double our efforts to develop oil alternatives, such as hydrogen and fuel cell technologies, which would further reduce and eventually eliminate oil dependence. Here again the government must foment fertile market conditions, which will allow energy alterative industries to flourish. Tax advantages and incentives for development (and consumption) will spur growth in these fields, only through unsupported, heavy handed, government mandates would a scenario envisioned by Justin Fox come to pass, an outcome that must be averted

By Fox’s reasoning, oil from the Middle East is cheap and thus why waste resources devoted to alternatives, ignoring the geopolitical reality of the Mid-East situation or the endless cycle of war and dependence upon Middle Eastern tyrants and subjugation at the hands of hostile enemies, that is every day reality in our present situation. Can energy independence be accomplished in our life time? Most assuredly. A generation ago Brazil, with virtually no domestic fossil fuel resources, was far more dependent upon foreign oil than the US, today, Brazil has solved its energy needs producing lower cost ethanol alternatives from sugar.

Energy independence must figure prominently in America’s future, if there is to be a future. We should all be wary of those who’s minds are so closed and reasoning ability and creativity so lacking that they can’t see the writing on the wall or discern anything beyond that which is black and white.
http://money.cnn.com/2006/02/28/news/economy/pluggedin_fortune/index.htm?cnn=yes