Bush Backs Off Pledge to Reduce Middle East Oil Imports

So Were You Lying Then or Are you Lying Now?

During his State of the Union speech Bush claimed the U.S. is addicted to oil (a stupid statement, unless you believe that the U.S. is addicted to things like food and oxygen as well). But now it turns out that Bush’s pledge to cut dependence on foreign oil was just . . . well . . . not true.

One day after President Bush vowed to reduce America’s dependence on Middle East oil by cutting imports from there 75 percent by 2025, his energy secretary and national economic adviser said Wednesday that the president didn’t mean it literally. What the president meant, they said in a conference call with reporters, was that alternative fuels could displace an amount of oil imports equivalent to most of what America is expected to import from the Middle East in 2025. But America still would import oil from the Middle East, because that’s where the greatest oil supplies are.

The president’s State of the Union reference to Mideast oil made headlines nationwide Wednesday because of his assertion that “America is addicted to oil” and his call to “break this addiction.” Bush vowed to fund research into better batteries for hybrid vehicles and more production of the alternative fuel ethanol, setting a lofty goal of replacing “more than 75 percent of our oil imports from the Middle East by 2025.” He pledged to “move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.”

Not exactly, though, it turns out.

“This was purely an example,” Energy Secretary Samuel Bodman said. He said the broad goal was to displace foreign oil imports, from anywhere, with domestic alternatives. He acknowledged that oil is a freely traded commodity bought and sold globally by private firms. Consequently, it would be very difficult to reduce imports from any single region, especially the most oil-rich region on Earth.

It turns out that Bush wanted to “dramatize” that part of the speech and apparently the best way to do that was to include the misleading term “Middle East.” The problem is precisely that described in the final paragraph of the excerpt: That since oil is a global commodity even if the U.S. reduces its consumption the Middle East will still be a major player in the oil industry and will still have an impact on the U.S. economy although a reduced one.

But don’t worry, the government is still going to spend untold billions on programs that will probably have dubious value.

Alan Hubbard, the director of the president’s National Economic Council, projects that America will import 6 million barrels of oil per day from the Middle East in 2025 without major technological changes in energy consumption. The Bush administration believes that new technologies could reduce the total daily U.S. oil demand by about 5.26 million barrels through alternatives such as plug-in hybrids with rechargeable batteries, hydrogen-powered cars and new ethanol products.

After all, if something like, say, hybrid cars has economic value, then private industry will invest in it. Even if it doesn’t have value right now, but say in a few years if oil prices continue to increase, firms will still be willing to invest in developing the technology. Consequently government investment in this kind of thing is unnecessary. If businesses are unwilling to invest in the research then either businesses are being foolish and passing up on a good thing (profit wise) or they see little benefit for such research. To believe that all businesses are being foolish strikes me as a bit of a stretch, but hey maybe the government really will discover a car that gets 200 mpg by harnessing the vast energy potential of hamsters.

Via Debunkers.

FILED UNDER: Economics and Business, ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.


  1. none says:

    You might also note that the National Renewable Energy Laboratory budget was just cut by 13% resulting in the elimination of 30-40 research jobs into, ummm, wind, biomass, ethanol… I’d say at this point that the administration was lying then and now.

  2. Herb Ely says:

    It would have been a better metaphor if he had said that the country is addicted to pork. Consider the five characteristics of addiction – increased tolerance, withdrawal symptoms, self-deception, loss of will, and distortion of attention. Our political system displays all five when it comes to federal funding.

  3. Anderson says:

    Now, as Drum notes, Bush may be more consistent than his flunkies would like.

    George Bush, later on Wednesday: “Bush expressed hope, as he did in his State of the Union speech on Tuesday, for cutting oil imports from the Mideast. ‘I believe in a relatively quick period of time, within my lifetime, we’ll be able to reduce if not end dependence on Middle Eastern oil….I meant what I said last night, that America’s addiction to oil is bad for this country.'”

    Maybe they haven’t been giving Bush his meds lately? What next? “Wow, invading Iraq was really stupid–must’ve been that pill Cheney gave me every morning!”

  4. Jony says:

    Maybe we could run our cars on yellowcake uranium?–Oh, wait, that was a State of the Union lie, also. Perhaps we’ll find some on Mars–oh wait, that was another State of the Union “dramatization.”

    Well, at least we don’t have steroids to contend with anymore–that was probably Bush’s most successful State of the Union-expressed goal.

  5. McGehee says:

    Maybe we could run our cars on yellowcake uranium?–Oh, wait, that was a State of the Union lie, also.

    Not quite. The claim that it was a lie, is the lie. Thank you for playing. Charlie, tell Jony about our nice parting gifts.

  6. legion says:

    While it was certainly on shaky ground before then, the Niger claims weren’t officially bailed on by the CIA until June ’03.

    Now all we have to fear are terrorist human-animal hybrids…

  7. Andy says:

    I see one of three things happening as far as the transition away from a fossil-fuels economy goes.

    1. The technology and infrastructure arrives exactly on time and everything goes smoothly.

    2. The technology and infrastructure arrive “too soon”, or while oil is still the cheapest option; they’re unprofitable at first, and the investors lose money, at least in the short run.

    3. The technology and infrastructure arrive too late. A massive crisis ensues.

    While private industry isn’t stupid, it also isn’t infallible, especially timing-wise. It’s potentially an important and useful role of government to jump-start investment in this field before it gets sexy, thereby making #3 less likely. I’d be happy to accept some waste of taxpayer funds as a hedge against a more spectacular disaster.

  8. Andy says:

    One more point: if you see oil independence as another piece of the all-encompassing national security puzzle, as Mr. Bush says he does, then you can justify government investment in renewable energy completely independently of economical issues.

    At the very least it makes the math far more favorable. How much money are we burning on hamster-powered cars, and how much does a six-month supply of Tomahawk missiles cost?