Is America "Addicted to Oil"?
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"Keeping America competitive requires affordable energy. And here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world."
--President George W. Bush, 2006 State of the Union Address
"addiction (noun): being abnormally tolerant to and dependent on something that is psychologically or physically habit-forming"
It is, of course, impossible for America to be "addicted to oil" for a very simple reason: oil is not a consumption good, but rather a production input.
We use oil -- lots of it -- but we don't consume oil. Nobody drinks gasoline or bathes in light sweet crude.
Our demand for oil is what economists call a "derived demand." So it follows that if we are "addicted" to oil, then it must be a "derived addiction."
So what are we really addicted to?
--We are addicted to living in the suburbs (or, stated differently, to not living in cities as they existed around 1900).
--We are addicted to Orlando and Anaheim and Aspen and the Grand Canyon and all the other vacation destinations we drive to.
--We are addicted to visiting our loved ones who live on the other side of the country.
--We are addicted to educating our children, which requires big yellow buses to get them to school.
--We are addicted to not having to ride a train to cross a continent, or a ship to cross an ocean, over a span of days rather than flying over a span of hours.
--We are addicted to improving our quality life by owning stuff (which is mostly brought to us from very far away places via ship, plane and truck).
--We are addicted to not freezing to death in wintertime.
Are these addictions really so bad?
So long as prices accurately reflect costs (including any verifiable externalities), I think the answer is a resounding "no."
For Discussion: On the other hand, we are also addicted to not having nuclear reactors in our communities. Perhaps that's an addiction that requires a stint in rehab. Do yo agree? Why or why not?
--President George W. Bush, 2006 State of the Union Address
"addiction (noun): being abnormally tolerant to and dependent on something that is psychologically or physically habit-forming"
It is, of course, impossible for America to be "addicted to oil" for a very simple reason: oil is not a consumption good, but rather a production input.
We use oil -- lots of it -- but we don't consume oil. Nobody drinks gasoline or bathes in light sweet crude.
Our demand for oil is what economists call a "derived demand." So it follows that if we are "addicted" to oil, then it must be a "derived addiction."
So what are we really addicted to?
--We are addicted to living in the suburbs (or, stated differently, to not living in cities as they existed around 1900).
--We are addicted to Orlando and Anaheim and Aspen and the Grand Canyon and all the other vacation destinations we drive to.
--We are addicted to visiting our loved ones who live on the other side of the country.
--We are addicted to educating our children, which requires big yellow buses to get them to school.
--We are addicted to not having to ride a train to cross a continent, or a ship to cross an ocean, over a span of days rather than flying over a span of hours.
--We are addicted to improving our quality life by owning stuff (which is mostly brought to us from very far away places via ship, plane and truck).
--We are addicted to not freezing to death in wintertime.
Are these addictions really so bad?
So long as prices accurately reflect costs (including any verifiable externalities), I think the answer is a resounding "no."
For Discussion: On the other hand, we are also addicted to not having nuclear reactors in our communities. Perhaps that's an addiction that requires a stint in rehab. Do yo agree? Why or why not?
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Posted by Kip on
1 February 2006
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