Thursday, May 18, 2006


From the Foundation for the Defense of Democracies (yes, i'm from the right and a liberal thinker;):

We've argued -- for example in this column -- for diversification of energy sources as a way to relieve American dependence on oil from such countries as Saudi Arabia (and Venezuela, for that matter).

We've never argued against conservation -- in addition to diversification. But perhaps we should have. The Wall Street Journal's James Taranto writes that a conservation effort, if achieved, would be counterproductive if the goal is to reduce the need for foreign oil.

"Basic economics tells us that a reduction in the demand for a commodity will lower the price," Taranto writes.

"What happens when the price of oil goes down? High-cost oil production becomes uneconomical, which means that low-cost producers end up accounting for a greater share of the market. The lowest-cost producer of all is our friends the Saudis."

In other words, conservation would make American more dependent on Saudi oil -- not less. Instead, let's remove barriers to making gasoline substitutes. Let's remove tariffs on foreign non-petroleum fuels (such as sugar cane-based ethanol). Let's work on removing barriers to the "gasification" of coal. Let's get more Flexible Fuel Vehicles on the road and more service stations that offer alternative fuels for them.

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