A recent expert roundup at the Council of Foreign Relations website took on the issue of “How to handle oil price volatility.” The arguments presented all center on the most typical responses to the many manifestations of our “oil problem.” These can be summarized as “conserve/improve fuel economy” and “drill more.” Unfortunately, neither of these proposed solutions can address the scale of the problem. Even together they are insufficient to meet the challenge.
The only meaningful way to reduce volatility is to reduce the influence that oil has over our transportation system. To do that, we must diversify our fuel options, and not just a little. We need to take meaningful action to exploit scalable and abundant U.S. domestic fuel supplies that can replace a substantial portion of the gasoline (and by extension oil) we use today. Opening the fuel market to wholly domestic substitutes can not only provide a buffer against resource and price volatility, but also keep our hard-earned dollars in the U.S., improve the air we breathe, and reduce the price at the pump. For Americans, that’s an all-around good deal.+