The Wall Street Journal. Classroom Edition Debating Current Issues: Oil and Energy Dependence

The U.S. relies on some of the world's most volatile countries to supply a raw material that is critical to its economy and lifestyle. Despite an increasingly energy-efficient economy, the U.S. remains hooked on imported oil.

In this debate from The Wall Street Journal Classroom Edition, Erich Pica, a senior policy analyst with the environmental group Friends of the Earth, and John Felmy and Edward Porter of the American Petroleum Institute present two approaches to reducing oil imports and promoting energy independence in the U.S.

YES Should oil prices be raised to promote energy independence?

By Erich Pica

The price of oil should be increased as part of a price increase on all fossil fuels. Our nation has a problem, and it is not simply a dependence on foreign oil. It is our dependence on oil. The U.S. consumes 25% of the world's oil supply, and has only 3% of its resources. Unless we fundamentally shift our oil consumption patterns, we will remain dependent on foreign oil.

Friends of the Earth, a nonprofit environmental organization, believes that the best way to help solve our dependency problems is with a carbon tax, or a fee on all fossil fuels, including oil. Such a tax would be an efficient way to encourage businesses and individuals to conserve fuel and develop nonfossil-fuel energy sources. And a carbon tax would also fix many of the economic distortions currently not factored into the price of oil.

For example, current oil prices do not reflect the impact of air pollution from our passenger vehicles, which contributes to unhealthy levels of smog that harm human health. And they don't reflect the environmental impact of oil drilling, which damages public lands and coastal areas. Nor do they reflect the growing military and foreign-policy costs of defending oil interests in the Middle East and other turbulent regions.

Using the true cost of oil would raise prices, but it would provide the incentive for consumers to reduce consumption and turn to innovative, clean sources of energy. Ultimately, using less oil is the only way to reduce our dependence on foreign supplies.

A carbon tax is a potential silver bullet that could solve our dependence on oil. Yet, unfortunately, it remains a taboo topic for political leaders. Elected officials and their allies in the oil industry are creating false choices between dependence on foreign oil and reducing the cost of domestic production, knowing that as long as we consume at current rates, our dependency will remain.

Massive oil rigs extract petroleum from beneath the ocean floor. Does the market price of gasoline reflect all the costs of its use?

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