Tuesday, January 24, 2012

"Dependence on XXXXXX Oil" and the State of the Union

A recent npr story talks about the US dependence on foreign oil. It misuses a quote from the Bush state of the union address in 2006 that probably no one except for a handful people recognize the significance of, but was part of a significant debate when I was at the White House.

The quote npr uses is that the US is "addicted to oil which is often imported from unstable parts of the world."

The original quote which the economists successfully changed was "addicted to foreign oil"

If you go back and look at all major federal speeches during my tenure at the White House from 2006 to 2007 you should find that the words "dependence on foreign oil" or "addicted to foreign oil" were never used. It was part of my job at the White House to change all such references to "dependence on oil" and "addicted to oil."

The reason is that the fundamental economic problems associated with oil (national security, environmental, etc.) do not depend at all on whether the oil is produced domestically or abroad.

If the price of oil suddenly spikes, consumers in the United States are hurt just as much as consumers in Canada which is a net oil exporter. It doesn't matter whether the oil is foreign or domestic.

The problem is that we use oil, not whether the oil is foreign or domestic.

Thus the White House economists worked hard to change that language in the State of the Union. It's clear from that npr story that nobody noticed.

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