The Second Oil Revolution
by Victor Davis Hanson
The world was reinvented in the 1970s by soaring oil prices and massive transfers of national wealth. It could be again if the price of petroleum crashes -- a real possibility given the amazing estimates about the new gas and oil reserves on the North American continent. The Canadian tar sands, deepwater exploration in the
America was the target of a crippling oil embargo following the 1973
But at a time of shrinking defense budgets, an oil-rich America might not need to protect Middle Eastern oil fields and lanes. U.S. foreign policy for once really could be predicated on the principle of supporting those nations that embrace constitutional government and human rights, without worry that offended dictators, theocrats and kings would turn off the spigots.
Curbing the voracious American appetite for imported oil could also help lower world petroleum prices for everyone. Poorer nations in
High-cost oil has warped the global system by rewarding luck and punishing accomplishment. Oil-poor countries that earned their wealth through hard work and innovation --
Unemployment here in
America is spending nearly a half-trillion dollars a year on imported oil -- the greatest contributor to the massive annual U.S. trade deficit. We are also currently borrowing more than
But without the drag of high-cost imported oil, the economy would grow more rapidly, and that could shrink both trade and budget deficits -- lessening somewhat the need for spending cuts and new taxes.
The problem with green energy has not been the idea, per se, of wind and solar power and electrical cars, but the use of massive federal subsidies, in times of record fossil-fuel prices, to rush into commercial-production technologies that are not yet cost-competitive or reliable. The president recently talked of vast algae reserves. True, energy-rich scum may prove to be helpful in the distant future. But right now we don't have the money to find out -- unless we tap our burgeoning fossil-fuel supplies, which can provide a critical bridge to new sources of green energy.
The world was transformed for the worse in the 1970s, when world oil prices quadrupled. A half-century later, it could change again for the better should oil prices crash. We should do our part in ensuring that at last the tables are turned.
"The Second Oil Revolution"