The Council On Foreign Relations’ Michael Levi says they are all wrong.
We spoke by phone with Levi yesterday to discuss his new book, “The Power Surge.” He said American energy independence is the biggest myth out there about the shale boom.
The reason: we’ve actually spent the past several decades actually trying to ensure we would never be energy independent. And our reasoning for doing so — insulating ourselves from oil shocks — has not changed:
It’s been a long time since producing all your own oil actually made you independent. We spent 40 years transforming global markets so they were integrated and flexible, to give us protection from the vagaries of global oil production, and one of the side effects is we’re now part of that, even if we produce all our own oil.
The question is, would we really want to be shutting off our borders, cutting off Canada and Mexico, and isolating ourselves from the rest of the world? We’ve spent more than more than 40 years…integrating economies, and if we were to cut ourselves off from oil, that would be tip of spear in process that would end up reversing the gains from bringing economies closer together. It would be difficult for us to say ‘We secede from the global oil market, but we want everything you have on every other front.’
Levi is not the first to express such sentiments — no less than Exxon CEO Rex Tillerson said something similar recently on Charlie Rose.
Anway, we highly recommend picking up Power Surge. Levi, a trained physicist, discusses how long we can expect the boom to last (short answer: we don’t really know), as well as the future of renewables (very good, but large scale use still remains a ways off).
He also warns about regulatory capture amid the gas rush, via an anecdote from a farmer named Bill Dix who lives on the Ohio/West Virginia border.
‘The whole government of West Virginia basically has been in the pocket of mineral companies forever,’ he charged. ‘It’s a hell of a mess. It’s terrible. I visited there, I came back, I couldn’t sleep for days. It is a disaster.’