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Our only energy insecurity is exposure to high energy prices.

To suggest, as the Western Governors' Association does in its energy policy recommendations to the Obama-Biden Transition Project, that it makes a difference whether we import oil from "friendly trading partners" or from others is a common misconception that could lead to policy blunders. For example, importing oil from nations X, Y, and Z instead of from A, B, and C would not ameliorate our real energy security problem, and US military occupation of oil producing regions is counterproductive.

Any supply disruptions, such as occurred twice in the 1970s, do not cause the customary buyers of the interrupted supply to be without oil while buyers from uninterrupted supplies are unaffected. Instead, worldwide prices shoot up and tankers are re-directed to different refineries around the world until the reduced worldwide supplies are meeting the highest value needs everywhere. The recent excursion of the benchmark petroleum price to $147 was a worldwide phenomenon, and prices of domestically produced oil increased no less than OPEC prices.

The US now uses 20-21 million barrels per day of petroleum. At $70 per barrel, that is about 3.5% of GDP. When the price doubled to $140 this year, it became 7% of GDP, depressed economic activity in the US, Europe, and Asia, and caused large permanent transfers of wealth to exporting nations. If we were consuming only half as much oil, the impact of the price spike would have been only half as large and would probably have been tolerable.

The only effective solution to our real energy insecurity problem is to make our economy generally more energy efficient and specifically to consume less petroleum from all sources. Increasing efficiency of petroleum use will also ameliorate, if not eliminate, our chronic negative balance of trade, reduce our contribution to global climate change, and boost growth industries employing middle class and working class Americans at good wages.

BTW, ordinary citizens can review and comment here on all(?) written materials submitted by interest groups to the Obama transition team. And there is a video of a guy who says all the comments and submitted materials get considered. Hmmm.

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