Security and Oil

I've been reading The Prize by Daniel Yergen. I've wanted to read it for quite some time and just ran across a copy at a yard sale. It is excellent. I'm about half-way through.

With gas and oil prices so high, I get very flustered with: 1. The government attempting to make decisions the market should make, a la ethanol subsidies (makes you think ethanol is not the correct answer); 2. Calls for lower gas prices or the temporary elimination of gas taxes (Do you want to stimulate demand or stimulate the market for replacements?); 3. Calls to increase US production.

Oil is a finite resource, so it is very simple: whoever has the most last wins. If you have some extra that never gets used, that's probably OK, you have more than made up for based on the prices at the end. Unless we intend to switch all of our armed forces to something other than oil and gasoline, we should consider places like ANWR our strategic reserves.

Reading Yergen, in particular the WWII chapters, this need hits home. by the end of the war, Japan was trying to make fuel from pine roots. Interestingly, the post- war US administrations seemed most interested in developing non-US sources of petroleum, recognizing the need to save the US's reserves.