In last night’s debate, moderator Bob Schieffer noted that each candidate had committed to reducing our dependence on foreign oil, and asked each candidate to “give us a number, a specific number of how much you believe we can reduce our foreign oil imports during your first term?”

After expressing strong support for nuclear power, Senator McCain stated that “I think we can easily, within seven, eight, ten years, if we put our minds to it, we can eliminate our dependence on the places in the world that harm our national security if we don’t achieve our independence.” Senator Obama responded that “I think that in ten years, we can reduce our dependence so that we no longer have to import oil from the Middle East or Venezuela. I think that’s about a realistic timeframe.”

Though many of the candidates’ proposed energy policies—including support for nuclear power, clean coal and renewable—are ones that are likely to strengthen our nation’s energy security, both McCain and Obama still seem to misunderstand some of the fundamentals regarding our dependence on oil and the threat it poses to our economy. First, price volatility and rising oil prices undermine the economy by making it both expensive and unpredictable to budget for our transportation-related energy expenses. Second, importing oil increases our trade deficit.

It is not entirely clear what Senator McCain means in stating that we “can eliminate our dependence on the places in the world that harm our national security if we don’t achieve our independence.” Does that mean we will not import oil from places we do not like? Of course, even if we don’t import Iranian oil, for instance, production disruptions in Iran can still affect the price of oil on the world market, creating problems for U.S. consumers. So, the follow-up questions are: 1) how do imports harm our security; 2) what would you do in response and how would you measure it (e.g., eliminate imports, eliminate imports from those countries, stop using oil); and 3) how would it improve our energy security.

Senator Obama stated that he wanted to get to a point where “we no longer have to import oil from the Middle East or Venezuela.” But, once again, even if we do, we are still subject to the price volatility of the world oil market. How would eliminating imports from those regions help address price volatility? How would you even stop imports from certain regions? If they are the lowest cost producers, shrinking demand might result in fewer imports from other higher cost producers. Moreover, even if we would not be sending money to these countries, we would be sending money elsewhere, and someone else would still be paying Middle Eastern countries or Venezuela for their oil.

Though many of their energy proposals are good ones, it would be reassuring if either of the two candidates would demonstrate a better understanding of the fundamentals. That understanding would almost certainly reduce the likelihood of wasting scarce resources on implementing unsound energy policies.

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