Goldmark: More oil won't end our oil habit

There's a lot of buzz these days that the United States is becoming more "energy independent" and relying less on imported oil for our vehicle fuel. If you don't read too closely, you might think that we were on the verge of actually doing that.

We're not. Most of the hype is occasioned by the fact that we are importing slightly less foreign oil than we did a few years ago, and pumping out more of our own. A lot of what we're pumping in the United States is from wells drilled some time ago; the oil left in them was too expensive to recover, but with the price of oil soaring, it's profitable to go back and pump out that residue. And our economy, caught in a long recession, continues to be held back by the high cost of oil. It's the end of the old movie, not the beginning of a new one.

The average price of Brent crude, an international benchmark for oil prices, again exceeded $100 per barrel in 2011 (the first time was in 2008). You and I feel this every time we fill up at the gas pump. The realistic outlook is for the cost of oil to continue rising -- with short-term ups and downs -- throughout this decade and probably beyond.

There are several reasons, but three of the most important are these: First, more oil continues to be discovered, but it is more difficult and more costly to extract; second, the growth of the emerging economies, such as India and China, means global demand will continue to increase significantly; and third, it is the policy of the Organization of the Petroleum Exporting Countries, whose members sit atop roughly 80 percent of the world's reserves, to keep prices high as a continuing source of wealth and income -- even though for some of them, the cost of pumping a barrel of oil may be as little as a tenth of the world price per barrel. In a famous 2008 interview, the Saudi oil minister said without batting an eyelash that the cost for his country to pump a barrel of oil was $2.

All three of these reasons point to the same conclusion for the United States: We must get off imported oil, and get off expensive oil.

The ugly truth that the champions of "drill, baby, drill" never tell us is that while new drilling will make a huge contribution to oil company profits, it will make only a small, and very expensive, contribution to our fuel needs. If our country continues to rely on oil, we will be faced with same three unpleasant consequences that confront us today.

We will still be dangerously dependent on oil imported from foreign countries, some of whose interests are, to put it mildly, not aligned with ours. Our economy will still be yoked to a costly energy system that acts as a brake on growth. And the transportation sector, the part of our economy most completely chained to oil today, will continue to be a huge emitter of greenhouse gases. Not a good place to be.

But the modest surge in domestically produced oil, plus slightly reduced oil consumption overall caused by the recession and more efficient vehicles, can buy us time to get on a new track. And that track should aim at replacing most of our imported oil with cheaper, cleaner, domestically produced fuels.

Those fuels -- natural gas, methanol and ethanol -- exist here in abundance. It will take some work to harness and adapt to them -- and we'll have to make sure the hydrofracking to get some of the natural gas is done safely -- but we can do it. That new track will require investment; that's good for creating jobs. It will speed growth and increase competitiveness; that's good for the economy. It will free us from the pressures of foreign oil exporters on whom we rely; that's essential.

And it will reduce carbon emissions; that's good for all of us.