The path to energy independence leads through "competition with oil," not "more oil."

We've already seen such competition happen. In 1973, a sixth of U.S. electricity was generated using oil. Today, total generation has more than doubled, but almost no U.S. electricity is powered by oil.

Think about that. In one of the four major energy sectors (electricity, domestic heat, industrial process heat and transportation) we are already energy independent. All U.S. electricity is produced in the US, in a competitive market. Prices are reasonable and usually stable. Our electricity is oil independent. Oil price volatility does not affect electric prices. The actions of OPEC and its allied countries hardly affect the availability or price of U.S. electricity.

When oil prices went up in 1973, the market and government reacted. Re-regulation and technology improvements created a competitive generation market. Alternative generation technologies were improved and developed and became low-cost alternatives. Coal, gas, nuclear, hydro, geothermal, solar, wind, biofuels and waste-to-energy have all had a part in eliminating oil in the electric sector. Oil and its price volatility lost in a competitive market. We became energy independent in electricity.

Competition constrains sudden price changes. Politics around raw materials remain relevant, but any single raw material is less important. If, say, Kazhakstan suddenly decides to stop selling uranium, thus increasing the cost of nuclear power, other forms of generation can be used. Natural gas is usually co-produced with oil, so if OPEC suddenly increases oil production and reduces oil prices to a point where U.S. gas producers close, the natural gas price will go up, but there will not be an electric supply crisis. Utilities will buy more energy from generators not using gas. The electric price may increase, but only a little. There won't be lines for electricity.

Competition with oil is possible in the other three sectors.

Heat, for domestic and industrial uses, can be produced with electricity. Becoming independent of oil for heat can be accomplished by changing infrastructure, over time, to use electricity instead of oil. (As gas is becoming an international market like oil due to liquified gas exports, forward thinking suggests that electricity should also be substituted for gas, to avoid issues similar to those of the oil market.)

Despite its price volatility, oil has been the best choice for transportation fuels for a long time. Transportation systems using oil-derived fuels were less expensive than and outperformed, alternatives like electricity and coal-based steam.

Oil hasn't had any competition in transportation for decades. Now it does. In 1973, modern electric cars did not exist. Today, electric cars have become competitive with many gas cars on cost and performance. They account for 6% of new U.S. sales. Electric boats and ships and ships with modern sails, are also advancing. It is possible to compete with oil in transportation.

Replacing the existing fleet will take decades. As electric vehicles become common, the U.S. will become less dependent on oil. Even during the transition, the fact that electric vehicles are widely available can constrain oil price increases, by adding elasticity to demand. People cannot stop using oil if all cars and buses use oil-based fuels. People will reduce their oil use once more cars and buses are electric.