The Ethanol Papers - Paperturn manuscript - Flipbook - Page 309
coffers, and the harm done to U.S. interests by oil rich states like Iran,
Venezuela, and Russia, then oil consumption would be far less than it is
now. Alas, it is believed that those national security externalities are not
embedded in gasoline prices and, as a result, gasoline consumption is
heavily subsidized. Ethanol consumption is thus suboptimal and ethanol
subsidies are an appropriate remedy. Economists, however, are far less
worried about the national security costs of America’s reliance on oil (foreign or otherwise) (Bohi and Toman, 1996) and with good reason: Economists understand oil markets far better than do foreign policy elites. The
alleged national security externalities associated with gasoline consumption are for the most part a figment of an imagination unmoored from a
good understanding of market reality.”
In addition to my response to Point #2 above, if the cost of the wars and military
actions were covered in the price of gasoline and/or the Federal taxes placed
on gasoline our debt would not have risen so high since Operations Desert
Shield and Storm began. This is proof that the cost of gasoline is heavily subsidized by the government.
Also, economists are worried about national security costs. Whether they understand anything better than anyone else is debatable, but for you to in any
way say that it is not a concern to them is outright nonsense. Moreover, the
news reports and video clips that we have seen on an almost minute-by-minute
basis since Iraq first attacked Kuwait, right up to the latest reports on CNN or
FOX News, are not a figment of anyone’s imagination. American forces were
and are fighting to protect the Saudi royal family’s oil assets.
7a. You wrote, “Many believe that reliance on foreign oil requires the
United States to militarily defend friendly exporting states and to ensure
the safety of oil supply facilities and shipping lanes. Those marching under banners declaring “No Blood for Oil” seem to believe that is the case,
as do most mainstream foreign policy analysts. Delucchi and Murphy
(2008) offer a rigorous attempt to quantify the public dollars associated
with the “oil mission.” They suggest that if motor vehicles in the United
States did not consume Persian Gulf oil, the U.S. Congress would have
likely reduced military expenditures by $13.4 to $47 billion in 2004 (one of
the two years examined in the analysis).”
The U.S. sent no troops to fight in the long Iran/Iraq war, even though both
countries produce and export oil. Our non-involvement had virtually no effect
on our way of life and there doesn’t appear to have been any ill-effects to
