Peter Grossman, professor from Butler University, came to Ball State to talk with Economics Club on March 26, 2014. He began by reviewing the history of America’s energy supply. The narrative that politicians campaign and accept reflects that energy is depleting, there is a possibility of a government program generating a great technical breakthrough, and self-sufficiency is the goal. His argument is to show that all of this narrative is false. Dependency on foreign imports for energy is dangerous, and he touched on how OPEC‘s (Organization of the Petroleum Exporting Countries) controlled of the world’s oil and natural gas, allowed them to have a stern hand in global affairs. As it turned out, OPEC was far more dependent on selling oil to the U.S. than the U.S. was in buying it from them.
We moved to the idea of energy independence, which was proposed by Richard Nixon in 1973. There was an unclear definition behind the phrase “energy independence”. The main goal was to reduce the U.S. imports of energy and energy supplies, most ideally to complete self sufficiency. Grossman states that the goal of complete self-sufficiency is a foolish goal for energy, and the ambiguity in defining the matter makes the goal of energy independence meaningless. The causes for the “energy independence” catching on in politics are somewhat contrived. The plan sounded bold but it was so ambiguous it could be used to mean anything. Those reasons, with the added value of longevity in completion and lack of other ideas, kept politicians pushing the idea for years. We’ve spent 40 years in Congress by passing acts and trying to solve the same problem the same way over and over again.
He talks about the myth of the energy “crisis”. Every energy crisis ended because of market forces, and none of them by government energy policies. SO WHY ARE WE LOOKING TO LEGISLATION FOR ANSWERS!!?? This is the idea that Grossman is getting across. These seemingly made up energy crises have only allowed politicians to keep some kind of stance in retaining a position. He concludes that policy makers have learned nothing from the past and that policy for energy has always failed and proved irrelevant to each new Congress.
You can purchase his most recent book here.
Check out Prof. Grossman’s blog here.
Interesting article from The Economist on fracking.