In email threads with friends outside of the blog, one frequent debate is about Mid East Oil Dependency. 

We all agree that Oil fuels the Mid East Swamp.

However, many of these folks honestly believe that a silver bullet is lurking around the corner that simply needs to be discovered and "poof" - no more Saudi / Middle East problem.  They contend, rather simply, that we just plain lack the political will to launch a new Manhattan Project to eliminate Saudi Oil income.   The more BDS-afflicted, point at Bush's oil background & thus argue that Bush simply refuses to do this and would rather send in soldiers and/or appease the oil industry than solve the problem.

Now, I don't deny that there are things we can do to impact oil consumption at the margin.   But the key phrase is the last 3 words - at the margin.   Shifting to hybrid vehicles, for ex., gets you about 5-8MPG in savings on average on small vehicles.   This helps but is far from geopolitically significant & is easily overshadowed by other developments such as China's emergence as a massive oil consumer.    (India won't be too far behind...)

Against this backdrop, this link-filled post from SDB lays out in massive detail the various alternative energy options and systematically explains why none of them are truly just lurking behind the corner.

I don't think that this war was caused by our use of Arab petroleum. It would have happened eventually anyway.

But even if it was caused by our use of Arab oil, that doesn't mean it will end if we cease using Arab oil.

And in any case, it isn't actually possible for us to stop relying on Arab oil without drastic and painful changes in lifestyle combined with commission of economic suicide. It wouldn't be possible for us even come close to maintaining our current GDP.

This is a fundamentally difficult problem, and most of the constraints are physical, practical, and insurmountable. This is one of those problems which look really simple to solve, but only if you don't look really closely.

I let you, gentle reader, peruse Steven's arguments but I'll abbreviate them down to -

• Like it or not, Oil runs and will continue to run a large portion of the economy
• No silver bullet for replacing oil exists
• All short/medium-term candidates for reducing oil consumption are truly TINY in their scope - none address the sheer scale of global oil consumption
• All candidates take too long to percolate through our system and won't affect the terror outlook for the next 5-15 yrs (in fact, a sudden drop in Saudi income may displace more young men and make the problem worse!)

The statistics are the key - it's a VERY long way to travel from "mandate 50% increased SUV fuel efficiency" --> delivering a crippling blow to Al Qaeda.    We're talking about very small drops in a very big sea.   Most folks have a horrible intuitive sense of just how large these numbers are.

Steven's arguments do leave out a couple of issues -

• Market Fungibility of Oil -- With advances in tech, globalization, etc. oil from one place (saudi) is basically the same as oil from another place (venezuela) and the market is literally quite liquid.   (yes, there are diffs b/t "light sweet" and "heavy" crude but they aren't important for now).  Therefore, we can choose not to buy our oil from one place but that's just like saying we're going to sip water from a different part of the stream.   Even during the Oil Embargo of the less-sophisticated 70's, Saudi Oil still found its way into American tanks via intermediaries in Europe.    Put simply, overall global consumption would have to be lowered rather than just the Saudi-serviced part of it.    As Arnold Kling noted in an article discussing the Fungibility problem:

  if Saudi funding for terrorism is the crux of the issue, then we have little choice but to confront the Saudis directly. The indirect approach of reducing oil demand is meaningless. Only a worldwide boycott of Saudi oil would effectively cut off their oil revenues. Yet such a boycott would be difficult to orchestrate and would itself be tantamount to war.

• Low cost producer -- For a variety of reasons, the Mid East is the world's lowest cost producer of oil.   The implication of this you'd have to get the average price per barrel down to something like $10 before you'd really kill Oil profits for these folks.   The problem is that on the way down to this price, you'd end up utterly destroying the economies of higher cost producers like Russia, Norway, Brit North Sea, Texas, Venezuela, Indonesia and others first - not to mention the cost to consumers in the US.  

On a secondary note, I think folks who apply the Manhattan Project analogy completely underestimate just how much of the atomic bomb "problem" was basically solved before the scientists started gathering in New Mexico.  The core principles behind the atomic bomb, for example, were nailed in 1938.   The Manhattan Project was a "race to build X" rather than a "race to find a solution to Y."   Hence, most of the work was engineering rather than research.     A solution to our Saudi Oil dependency problem, alas, is very much stuck in the speculative research category.

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