One of my favorite terms comes up about this time every year (it seems) and that is "Energy Independence".
The concept of this is that America (or your favorite country) can produce enough energy domestically that there is no need to send our precious dollars to another country so we can buy oil. What a great idea. Home grown gasoline burning away in our American made cars.
However, the idea is a myth and let me tell you why. For the sake of argument, I will change the word 'Oil' with something else. Something easier to understand like 'Chairs'.
Lets say you are a chair maker. You make the most lovely chairs and they are in demand everywhere in the world. When you sell your chairs in your neighborhood, you can get $100 per chair, but your chairs are so cool, people outside your neighborhood will pay you $200 for your chairs. If you double and triple your output, they will still pay you $200, and people in the next town over will pay you $300! Boom! That is some serious cash per chair. If you can more than double your profits by selling your chairs out of town, why would you bother to sell your chairs to the locals? They are only willing to pay $100 bucks for one of your chairs because they can buy an imported chair for the same price. The imported chair looks just like your chair and costs less.
Given the option to make $100 per unit or to make $300 per unit, any business person is going to opt for the higher number.
Oddly enough, this is exactly what is happening with oil production in the US. The US is exporting more oil now than they were in the heyday of Texas drilling when Dallas was on TV the first time. Overseas markets are paying much more than domestic markets for US produced oil. The idea that a US based oil firm would give up the extra profit of selling fuel overseas to make less money by selling it in America is laughable. The fact remains that we can buy oil from other countries for less than we are willing to sell oil to ourselves.
That is my take of energy independence. On to the next rant.
