No, Using Less Oil Won’t Boost America’s Energy Security – It’ll Make it Poorer and Beholden to China

From Tilak’s Substack

Tilak Doshi

Economic incompetence and geopolitical naïvety never go out of fashion, it seems. In a Foreign Policy article this week, Jason Bordoff — Director of Columbia University’s Centre on Global Energy Policy and a former Obama administration official — resurrects a tired old argument long favoured by the ‘progressive’ energy policy elite: that the best way to ensure America’s energy security is to reduce its demand for oil.

Using the backdrop of escalating tensions between Israel and Iran and a short-lived spike in crude oil prices, Bordoff insists that since oil prices are set globally, domestic production offers little “independence” against global oil price shocks. His conclusion: we must “use less oil”, chiefly by subsidising electric vehicles, building charging infrastructure and pressing forward with efficiency and emission mandates.

Bordoff’s arguments sound awfully similar to the ‘MEOW‘ (moral equivalent of war) speech by President Jimmy Carter in 1977 which called for policies to reduce dependence on oil imports. This was when the US was a net importer of oil and dependent on Middle East oil exports during a time of oil price shocks. President Carter’s approach — which some would call ‘pussy-footed’, pun intended – to the ‘energy crisis’ is a well-worn one advanced for decades.

However, such a thesis is deeply flawed, both economically and philosophically. What Bordoff and his cohort overlook is that human flourishing arises not from technocratic control over consumption, but from the freedom to produce, innovate and engage in voluntary exchange. As Adam Smith and Friedrich Hayek understood, markets — not mandarins in policy institutes — are best suited to determine the optimal allocation and consumption of resources. Bordoff’s call for reduced demand is not only economically questionable; it is politically naïve and strategically self-defeating.

The Misunderstood Value of Production

As Bordoff notes, oil prices are determined by global markets. This is a truism: oil is a fungible global commodity and any disruption in its supply anywhere effects all consumers everywhere. But from this he draws the erroneous conclusion that domestic production is of limited strategic value. This logic fails to grasp that even in a globally priced commodity market, domestic production plays a vital role in national resilience, economic growth and geopolitical strength. President Trump’s ‘energy dominance agenda’ and “drill, baby, drill” is not PR spin: it actually means something positive for the US economically and geopolitically.

As any Econ 101 student knows, in the simple identity of the components of GDP, exports add and imports subtract from the nation’s annual economic pie. When oil prices shoot up, a net oil exporter like the US benefits even if a segment of the economy (e.g. motorists) pays more at the pump. By the same token, when prices fall, motorists benefit while oil producing companies and their workers suffer adverse effects. When a nation produces and exports a commodity in global demand, it does more than hedge itself from price volatility — it creates income, jobs and technological advancement. Production is not a sideshow in the oil market; it is the main engine of prosperity.

Consider the case of the United States, which today stands as the world’s largest oil producer. This achievement is not the result of government planning or demand reduction. It is the consequence of private entrepreneurship, innovation in hydraulic fracturing and horizontal drilling, and an ecosystem that respected property rights and competitive markets.

The shift from perceived oil scarcity to a brave new world of oil abundance was brought about in an astonishingly short period of time by the advent of the ‘fracking’ revolution in the US. This involved horizontally drilling and hydraulically fracturing shale rock with high-pressure liquids to extract ‘unconventional’ oil and gas. After US crude oil production more than doubled in a decade, US production was rated at over 12 million barrels per day by mid-2019, surpassing Russian and Saudi Arabian output as the world’s largest.

The shale revolution, born in Texas and North Dakota, not only upended global energy geopolitics but restored the US as a credible energy superpower. That success story is grounded in production, not abstinence. The wealth generated by US oil and gas exports flows into the broader economy, stimulates investment in infrastructure and manufacturing and reinforces the country’s trade balance. The Trump administration’s ‘energy abundance’ agenda adds unmistakable strength to an economy which even its fiercest detractors will find hard to dispute.

Furthermore, Bordoff’s claim ignores the inherent flexibility and dynamism of US energy producers. Shale oil can respond to price signals far more rapidly than traditional conventional projects. This flexibility has transformed oil markets from rigid, cartel-dominated systems into more responsive and competitive arenas. Domestic production creates optionality in foreign policy and ensures that no single regime — whether in Riyadh, Tehran or Moscow — can weaponise energy without consequences. To dismiss the value of production because of price globalisation is akin to arguing that the US shouldn’t manufacture semiconductors simply because their price is set in global markets.

Bureaucratic Control vs Market Coordination

At the heart of Bordoff’s argument lies a deep-seated belief that consumption choices must be managed from above. He calls for demand-side management, taxpayer-funded EV subsidies and public spending on charging infrastructure as pathways to “energy security”. This is nothing less than a modern variant of central planning — a belief that bureaucrats can calculate the correct level of energy use and steer society accordingly. But as Hayek warned, no centralised authority possesses the knowledge necessary to outperform decentralised market processes. The idea that a handful of policymakers can determine the ‘right’ level of oil use is not just presumptuous and hubristic — it is dangerous.

This technocratic vision also fails to grapple with the geopolitical and strategic contradictions of the proposed EV transition. While Bordoff advocates electrification as a route to energy independence, he overlooks the fact that electric vehicles and their batteries are deeply embedded in supply chains dominated by China. From lithium and cobalt to rare earths and anode materials, the majority of EV components flow through Chinese-controlled processing and manufacturing nodes.

Thus, the vision of “reduced dependence on oil” effectively amounts to a transfer of dependence — from Middle Eastern oil producers to Chinese oligopolistic suppliers of EV supply chains, even if the US were a net energy importer. Even in this hypothetical scenario – where the US is not the world’s leading oil producer – depending on a range of oil producers in the Middle East made up mainly of Gulf Arab states that have long been key American allies is surely preferable to dependence on a single geopolitical competitor under Communist Party rule. In the name of reducing energy insecurity and national vulnerability, Bordoff would have policymakers incentivise Americans to drive EVs manufactured cheaply by China in industries powered largely by coal! This certainly is prime material for the ‘can’t make it up’ files.

Moreover, subsidising demand reductions sends perverse signals to producers. Artificially constrained demand discourages investment, undermines supply stability and ultimately drives up volatility. If fossil fuel use is relentlessly stigmatised and regulated, as it was under the previous Biden administration, capital will flee, supply chains will degrade and prices will grow more erratic. Indeed, the Biden administration did a fine job of precisely this process of self-destruction, all in the name of the “first climate Presidency”.

Energy Freedom as a Path to Prosperity

Beyond economics and geopolitics, Bordoff’s worldview clashes with the moral and philosophical foundation of a free society. The choice to drive a gasoline car, heat one’s home with natural gas or invest in oil drilling should not be pre-empted by technocratic fiat. Human flourishing arises when individuals are free to produce, consume, innovate and pursue their own goals. The market, not the state, is the best arbiter of such choices.

This is not to say that alternatives such as EVs or renewable energy have no place. Quite the opposite. Innovation should be encouraged. But it must be guided by competition and market feedback, not by centralised subsidies that entrench inefficiencies and favour politically connected industries. If EVs offer superior value, consumers will adopt them. If renewable energy proves cost-effective and reliable, the market will embrace it. Let the best technologies win through price, performance and consumer preference, not through bureaucratic decree.

Crucially, the push to reduce consumption often disguises a regressive and elitist undertone. While energy elites advocate green degrowth from the comfort of coastal boardrooms, it is rural and working-class Americans who bear the brunt of restricted energy access. Affordable, abundant energy is the bedrock of upward mobility — powering farms, trucks, small businesses and homes. When policymakers artificially constrain supply or mandate expensive ‘energy transitions’, they impose disproportionate costs on those least able to bear them. A vision of prosperity that rests on enforced scarcity is not only misguided, it is morally bankrupt.

Making America Great Again

The inauguration of Donald Trump as the 47th President of the United States dramatically changed the trajectory of US energy policies as pursued by the Biden administration and the previous two-term Obama presidency. No longer is climate alarmism a factor in energy policy, and mandates to force energy choices on the ordinary American consumer have become a thing of the past. Fossil fuels are no longer vilified, and coal mineworkers are no longer held out as ‘deplorables’. The recently passed ‘Big Beautiful Bill‘ will no longer provide subsidies for EVs even as it nullifies draconian emission standards and phases out production tax credits and other subsidies for wind and solar projects.

Today, America exudes confidence in its ability to lead across the energy industry. President Trump’s key executive orders affecting the industry, together with the appointment of economically literate conservatives and businessmen – instead of climate zealots – in leadership roles in the energy (Chris Wright), environment (Lee Zeldin) and interior (Douglas Burgum) portfolios have put the country on a path of energy bounty, enhancing not only energy and national security at home but also America’s strategic standing abroad.

Climate cultists and central planners continue to have a grapple hold on university departments. But with the Trumpian counter-revolution in energy policy, Americans can look forward to an energy future where human flourishing is enabled by freedom, not rationing, by production, not prohibition, and by opportunity, not scarcity.

A version of this article was first published in The Daily Sceptic https://dailysceptic.org/2025/07/08/no-using-less-oil-wont-boost-americas-energy-security-itll-make-it-poorer-and-beholden-to-china/