Inconvenient Truth about Energy
By Arnold Kling
Robert Bryce writes,
Fans of energy independence argue that if the United States stops buying foreign energy, it will deny funds to petro-states such as Iran, Saudi Arabia and Hugo Ch¿vez’s Venezuela. But the world marketplace doesn’t work like that. Oil is a global commodity. Its price is set globally, not locally. Oil buyers are always seeking the lowest-cost supplier. So any Saudi crude being loaded at the Red Sea port of Yanbu that doesn’t get purchased by a refinery in Corpus Christi or Houston will instead wind up in Singapore or Shanghai.
It’s Oil Econ 101. It’s sound. And politicians, along with most of the public, refuse to believe it.