In his speech accepting the Republican Party’s presidential nomination on August 30, former Massachusetts Governor Mitt Romney presented a five-step program for creating “12 million new jobs” in the United States.
The first step, he said, is that “by 2020, North America will be energy independent by taking full advantage of our oil and coal and gas and nuclear and renewables.”
The theme of “energy independence” has been emphasized by other politicians in recent years. Former Virginia Governor George Allen, for instance, who is now a candidate to regain the U.S. Senate seat he lost in 2006, has made “energy independence” a theme of his 2012 campaign.
Former Virginia Governor George Allen tells members and friends of Americans for Prosperity: “Americans are not addicted to oil; Americans are addicted to freedom!” (Recorded February 10, 2009, in Richmond, Virginia)
Video: What Are Americans Addicted To?
While still a senator, Allen delivered a speech entitled “Strategic Plan for Energy Independence,” in which he said: “For America to be free and independent, for America to remain the masters of our own destiny, we must declare our independence from the Middle East, and other hostile sources of foreign oil.”
Hours before Romney gave his convention speech, the Charlottesville Libertarian Examiner had an opportunity to ask a distinguished economist whether “energy independence” is a sound economic concept.
The occasion was the release of a new book, Living Economics, written by George Mason University professor Peter Boettke, who is also director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at GMU’s Mercatus Center. Boettke sat for an interview after the forum ended.
“Personally,” he said, “I think when any kind of concepts like [‘energy independence’] come up, you should always ask the question, ‘At what cost?’”
Boettke explained that currently, there is “not really a free-market system in energy.”
Rather, he said, “there’s a variety of government subsidies and regulations that are involved that steer the pattern of economic behavior one way or the other way.”
Rephrasing the question, Boettke asked, “Do we need ‘energy independence’?”
He acknowledged the validity of complaints by politicians about hurdles faced by energy producers, the economist noted that “part of the issue is that we don’t allow certain oils to be extracted and utilized here because of regulations.”
Needing ‘real innovation’
In addition, he said, “we also have force-fed alternative energy positions which aren’t actually very good” such as wind power.
Rather than “energy independence,” Boettke argued, “we need to have real innovation in the energy market. We need to allow markets to operate so they send us the signals when the relative scarcities of things actually are spiking up, which would send a signal to other entrepreneurs [about] where to look for other sources of energy.”
Emphasizing his point, Boettke repeated: “We don’t need energy independence, we need energy innovation.”
What the United States needs, he explained, “is energy innovation, which could include more energy from abroad, because we can get it cheaper, or more [domestically produced] energy,” or other combinations of sources.
“What we need,” Boettke continued, “is not some policy to say we [cannot] buy oil from afar” or that “we need to be less dependent on oil and more dependent on something else.”
Instead, he concluded, “what we need is simply real, true energy innovation. If we have real, true energy innovation, then we’re not going to have this issue of ‘energy independence.’”