Friday, April 28, 2006

Energy, the Economy and Terror

Friedman's op-ed --

... energy, broadly defined, has become the most important geostrategic and geoeconomic challenge of our time — much as the Soviet Union was during the cold war — for four reasons:

First, we are financing both sides in the war on terrorism: financing the U.S. military with our tax dollars, and Islamist radicals and states with our energy purchases.

Second, continued dependence on fossil fuels is going to bring on climate change so much faster in an age when millions of new consumers in India and China are driving cars and buying homes. And that's why renewable fuels and energy-efficient cars, buildings and appliances are going to be the biggest growth industry of the 21st century. The tougher the energy-efficiency standards we impose on our own companies, the more likely it is that they will dominate this new industry.

Third, because of the steady climb in oil prices, the seemingly unstoppable wave of free markets and free peoples that we thought was unleashed by the fall of the Berlin Wall is now being stymied by a counterwave of petro-authoritarian states — like Iran, Venezuela, Russia, Nigeria and Sudan — which now have more petro-dollars than ever to do the worst things for the longest time. They will poison the post-cold-war world unless we bring down the price of crude.

Fourth, we will never plant the seeds of democracy in Iraq and the wider Arab world if we don't also bring down the price of oil. These Arab oil regimes will not change unless they have to, and as long as oil prices are soaring they won't have to. Iraq will become just another Arab state that taps oil wells instead of developing its people.

I really think this country is gonna be screwed unless we get our economy focused on leading in the energy technology sector:. We can either sell energy technology to the rest of the world, or fight for access to the remaining oil reserves (along with the Chinese, Indians, etc)...

Government needs to "lead" here ... like it did for the moon-shot program of the '60s (US Companies reaped the win-fall by commercialising those technologies -- developed on the public dime -- for the next 30 years...). The short-term risk-reward view taken by business will preclude them from making real progress in this area until its too late...

There's obviously no chance of this happening with the current administration... but we better get started soon.


Stalin the Shark said...

Oh, man - I checked out that jarhead link you left me - that is some wacky stuff.

:-), StS

Intellectual Insurgent said...

This has to be one of Friedman's dumbest, least convincing pieces. Everyone is bad except America and, only, if only, the price of oil would come down, peace would reign on earth. He's a f'ing moron.

Reign of Reason said...

You’re right: there’s more to the worlds problems than oil financed dictators in the Middle East: we have to look at our own f’d-up foreign policies.

However, his 4 points have merit, IMO. As we’ve discussed before, the Chinese and Indians are going through their own industrial revolutions – more like ‘technology revolution’: straight from mainly agrarian societies to 20th century economies.

If we had real leadership we’d be preparing to compete in a world with increasingly limited fossil fuels… instead of preparing for a conflict over access to them.

That’s the point I take away from his on-going diatribe.

squawpeak said...

One option being pursued (I believe 13% funded by the U.S.)

Watch oil & gas prices go up and begin providing more serious incentive for developing alternates to oil. $5/gallon gas would do wonders for innovation of other energy sources.

Reign of Reason said...

It's gonna be hard on poorer folks (high energy costs), but higher prices are what's gonna force Detroit and Americans to re-evaluate their choices.

I wish those extra dollars were going directly to research (via a gas tax of .50/gal or so) instead of into oil company profits... They are likely to spend them on CEO bonuses and foreign investments, instead of research into more fuel efficient vehicles.

Its all about the highest return on investment.

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