Energy and the Economy
Our economy depends on our energy supply. From lipstick to plastics and asphalt to transportation fuels, oil has been the basis of our economy for decades. When domestic production peaked in the early 1970’s, we simply began importing more oil, and we now rely on foreign countries for over 60% of our daily oil consumption.
Our country’s addiction to foreign oil has dark consequences. The strength of our national currency is on borrowed time as we send billions of dollars overseas for goods and services, most notably oil. Three times in the last 30 years (1973, 1978, 1990), oil price spikes due to crises in the Middle East have caused recessions in the U.S. Not only that, but the impending peak oil crisis and the exploding demand for oil in emerging eastern economies such as China and India mean that we will need to develop new fuel resources within a very limited window of time due to the diminishing global supply of oil. At some point in the near future, when world demand for oil too far exceeds world supply, the price of oil will skyrocket. At that time, the very resource that fueled our economy will begin to work against us.
The world has never faced an energy crisis like this before. In the past, more economical sources of energy were discovered and commercialized long before existing sources became too expensive for us to use. For example, we didn’t run out of wood before shifting to coal, and we began using oil long before our coal supplies peaked.
Far too many people assume that free market forces will resolve our national energy crisis in time to avoid economic destruction. Free market forces are simply not adequately equipped to deal with global warming, environmental degradation, national security costs, and the depletion of natural resources. All of these factors will have a destructive effect on our economy long before free market forces can react, unless we create a comprehensive national energy policy that will allow free market forces to work for us.
In order to invest in more fuel-efficient industry and renewable energy resources on the scale our country demands within the window of opportunity still open, business needs government policies that significantly diminish the risk of energy-responsible enterprise. Otherwise, industry is hesitant to invest in renewable energy resources and energy efficiency. Until the American citizenry adequately understands the urgent need for a responsible, comprehensive national energy policy, profit-motivated industry and career-centered politicians will never be faced with the kind of political climate necessary to demand and support fundamental change. Until then, the excessive use of cheap energy is so thoroughly ingrained in our society that we are courting economic disaster.
Why would we risk economic peril when we already have the technology to begin freeing our economy from our present national energy policy? We just need to learn more about our energy crisis and exhibit the national will necessary to deal responsibly with the challenges and opportunities it presents. We owe nothing less to ourselves and to the next generation.
Click here to learn about potential solutions to our national energy crisis. To help us create greater energy literacy for all sectors of our democracy so we can act more responsibly, click here.
