An important but easily missed subplot is wrapped up in the Ukraine tragedy. It has to do with America’s dangerous addiction to oil.
I use the word “addiction” advisedly because it is an apt metaphor and President George W. Bush, a former Texas oilman, used it first. He surprised many in 2006 when he acknowledged during his State of the Union address that “America is addicted to oil.” His statement begged questions that persist today: Since oil is an addiction, why does the government keep subsidizing the drug? And when will we finally commit to a cure?
We have a long history of oil dependence. Congress has given fossil fuels tax breaks for more than a century. Tax subsidies rose 28 percent between 2017 and 2019, and now amount to more than $20 billion annually. Oil and gas production receive 80 percent.
However, the actual cost is much higher. The International Monetary Fund (IMF) calculates that America subsidies fossil fuels with $660 billion yearly when we count adverse social and environmental impacts ranging from extortion by unfriendly oil-producing countries to lung diseases and climate change.
Energy independence has been a talking point for every president since Jimmy Carter, when Middle East oil producers stopped providing the U.S. with petroleum because we sided with Israel during the Yom-Kippur War of 1973, and supplies were interrupted in 1979 by the Iranian revolution. Both crises were clear lessons on the danger of relying on imported oil.
However, our answer was not to kick the habit but to produce more of the drug ourselves. In 2018, the United States became the world’s largest producer of crude oil, leading then-President Donald Trump to declare America had finally achieved energy independence under his watch. “We are ending decades of foreign energy reliance to unleash the blessings of American energy independence,” he boasted.
He was wrong. We still import oil, about 8 percent of it from Russia. More to the point, a drug is a drug no matter where it’s made. We don’t control its price — market forces do. When the world produces more, the price goes down; when it produces less, the price goes up.
So, if OPEC or Russia, for example, want to cause pain at our pumps, they can reduce their production. The pain spreads far beyond the pump. Price spikes have preceded the last five economic recessions in the United States. Some researchers say oil prices have triggered every recession since World War II.
Other factors beyond our control also affect oil prices, like weather, accidents, international squabbles and pandemics. For example, oil prices have approached $100 a barrel because producers have not caught up with rising demand as the COVD-19 pandemic winds down. As I write this, the price is as high as $4.78 a gallon in California.
A deep freeze shut down oil refineries in Texas last winter. Russia and Saudi Arabia increased production in 2014 and 2015 to undermine the U.S. shale boom with lower prices. That caused about 150 American companies to go bankrupt. Five years later, the same two countries got into a price war that added several hundred more bankruptcies in America’s oil industry and caused direct losses of more than $200 billion. The COVID-19 pandemic led to layoffs of more than 160,000 American oil workers when global consumption crashed.
Environmental damages are immense, too, from oil spills like the Exxon Valdez in 1998, the Santa Monica blowout in 1969 that helped trigger the environmental movement of the 1960s and 1970s and the Deepwater Horizon spill in 2010. The National Oceanic and Atmospheric Administration (NOAA) says there are thousands of spills in U.S. waters every year, including 44 large spills between 1969 and 2017.
And oil use worldwide causes about one-third of the carbon emissions that have us barreling toward catastrophic and irreversible climate change.
The only way to cure oil addiction is to stop making and using the drug. The only way to end our economic vulnerability is to cure the addiction worldwide. Even if we in the U.S. imported no oil, our economy would be at risk from oil crises elsewhere. In this global economy, any country’s oil crisis becomes every country’s problem.
The cure is energy resources that are inexhaustible, clean, indigenous, ubiquitous, easily accessible and free. How do we withdraw? The Brookings Institution offers one formula. We make subsidies transparent in government budgets and accounts, eliminate them in a sequence of gradual steps, incorporate those steps in regulations and laws to prevent backsliding, as well as replace tax subsidies with direct cash transfers to the income groups that would be hurt by higher energy prices. I would add greater transparency for the adverse effects of fossil fuels on society, the economy and the environment.
Meantime, the Senate should stop stonewalling and pass the Build Back Better bill to help expedite America’s transition to clean energy. Withdrawal won’t be painless because our addiction has been so severe for so long. But as addicts recovering from other drugs will testify, the cure is far less painful than the addiction.
William S. Becker is a former U.S. Department of Energy central regional director who administered energy efficiency and renewable energy technologies programs, and he also served as special assistant to the department’s assistant secretary of energy efficiency and renewable energy. Becker is also executive director of the Presidential Climate Action Project, a nonpartisan initiative founded in 2007 that works with national thought leaders to develop recommendations for the White House as well as House and Senate committees on climate and energy policies. The project is not affiliated with the White House.