9/11 Was a Tragedy On Top of An Enduring Tragedy
Oil in abundance is a given. The United States could find itself 100% bereft of oil, all the while at war with or embargoed by every oil-producing nation on earth, and the truth about oil abundance in the U.S. wouldn’t change one iota.
What ensures copious amounts of oil consumption in the U.S. is NOT related to copious “proven reserves” in the U.S., but is instead 100% related to the fact that the American people are the most productive people on earth. And so long as Americans are economically productive, the world’s oil will flow to the U.S. no matter what.
It brings up a myth about oil and U.S. consumption of oil that just won’t die: that the 1973 OPEC embargo kept oil extracted in Arab nations from reaching the United States. It’s a total falsehood. See above.
Populated by the most productive people on earth, the U.S. is the world’s biggest market for oil consumption. Since it is, and since it was in the 1970s, the idea that Arab members of OPEC were going to cease selling into the world’s biggest market was absurd. And the selling didn’t stop.
While the Arab members of OPEC (Iran is not an Arab nation) ceased selling directly into the United States, they sold to others who sold to the United States. What’s true about oil is true about rare earths from China, cobalt from Congo, shoes made in Italy, and any other market good. Short of producers hoarding what they produce, they’ll be selling to the whole world whether they like it or not.
What’s unfortunate is that this truth about oil continues to elude politicians, pundits, and people. And it always has. As the subhead to Daniel Yergin’s history of oil, The Prize, puts it about oil’s history, it’s been an “Epic Quest for Oil, Money, and Power.” How unfortunate.
Oil is once again like any other market good. The only limit to its supply isn’t proximity to the source, but production or lack thereof. When a nation’s markets are open and free, it’s as though every producer in the world is operating next door.
Why the commentary about oil? The easy answer is that oil is routinely discussed in these opinion pieces.
Just the same, it seems extra appropriate on September 11th. Without defending what the terrorists did on that day even a little, it would amount to willful blindness to assert that there was no oil angle to what happened 25 years ago today. Which is what makes it so frustrating.
To see why, just ask if there would be any notable foreign policy interest for the U.S. in the Middle East if it were 100% energy dependent? It’s certainly possible, but it’s difficult to imagine.
Except that there should be no foreign policy related to oil any more than there should be foreign policy for flat-screen televisions, smartphones, and bananas. Oil is a market good. Nothing more, nothing less. And it will once again flow to where there’s production regardless of what the sources of it may rhetorically desire.
The only “epic quests” on the matter of oil should be among the competitive individuals competing to extract it. After that, nothing.
Which is why 9/11 is a tragedy on top of a tragedy. The loss of life was hideous, as are all wars for oil. That a myth informed and plays a role in informing the U.S.’s involvement in the Middle East to this day renders the tragedy extra infuriating.
Originally published on Real Clear Markets.