by Mitch Kokai
Senior Political Analyst, John Locke Foundation
American consumers are still suffering from record gasoline prices as the summer driving season kicks off. President Biden recently proclaimed that these prices were driving an “incredible transition” that will make the world “stronger and less reliant on fossil fuels.” The unfortunate reality is that oil is as secure as it gets. America should expand production of cleaner alternatives, but it is dangerous to expect more security from sources far less flexible and far more tenuous than America’s oil supplies.
Although burning oil causes pollution, the great advantage of oil is its energy density. Little space is needed to fit much energy, which makes it easy to transport and store. Oil is the energy you can carry with you. That’s why oil provides virtually all the energy for international shipping and travel, powering airplanes and vessels that make our global economy possible.
The world is moving to rely more and more on cleaner energy sources, especially electricity and natural gas. The challenge with electricity and gas is that, compared to oil, they are far more expensive to transport and store. This is not a mere inconvenience; this is a crucial problem for the affordability and reliability of the global energy system.
If there is a shortage of oil anywhere in the world, it can be affordably shipped by tankers, trucks, vessels, and pipelines to help smooth global prices. And if there is an anticipated shortage of oil, it can be cheaply stored in strategic reserves and private stores to help smooth the future shortage. It is far more expensive to store electricity or natural gas to meet future shortages. And if there is a regional shortage of electricity, little can be done without building new, expensive power lines, which require years of planning, permitting and construction. Reaching an area starved of natural gas requires either new pipelines, which face similar challenges, or new facilities to liquefy and re-gasify the fuel, which cost tens of billions of dollars.