Energy independence won’t guarantee low prices

On the campaign trail, both Mitt Romney and President Barack Obama have vowed to liberate the United States from reliance on foreign oil, offering voters a pledge of at least North American “energy independence.” In some ways, that’s an easy promise to make. As The Houston Chronicle reports, no matter who resides in the White House during the next four years, the United States is already on a trajectory to derive much of its oil and all of its natural gas from within its own borders, thanks to technologies allowing energy companies to harvest the fossil fuels from dense rock formations. But abundant domestic supplies don’t guarantee a drop in the cost of energy, most analysts agree. That’s because oil prices are set on a world market, subject to a complex mix of factors outside the United States’ control. And even if the United States or North American oil imports plummeted to zero, the nation would still be connected to that global market. Michael Levi, a senior fellow for energy and the environment at the Council on Foreign Relations, argues that the notion of real energy independence requires more than just “impressive arithmetic”; it isn’t just about adding up total imports and exports to get to zero. “So long as you are part of a global oil market, your economy remains vulnerable to unrest in that market—even if you are buying oil from yourself,” Levi says. Read the full story here.