Yesterday, the Journal ran a long, page one story featuring claims by retired Air Force General Charles Wald that oil production facilities around the world are dangerously vulnerable to terrorist attack and that the U.S. hasn’t done enough about it. General Wald is primarily worried about unguarded pipelines and chokepoints for tanker traffic and believes that the U.S. military needs to make “oil security” one of its chief concerns.

I was invited this morning by producers at CNBC’s Kudlow & Co. to debate General Wald, but alas, the General turned out to be unavailable, so the spot was scrapped. That’s too bad, because I was looking forward to engagement.

In short, General Wald is arguing that:

• Market actors — who have spent billions of dollars on these facilities — are underinvetsting in security;
• Producer states — who rely on oil revenues for most of their state revenue — are underinvesting in security as well; and finally:
• If the U.S. military doesn’t do something about this, nobody will.

This is all pretty hard to swallow. Why would investor-owned oil companies be so carefree about their multi-billion-dollar facilities and capital assets? Are those companies run by stupid or myopic individuals? Likewise, poor governments have even more reason to be worried about securing oil production facilities and transit lanes than does the United States, because the economic harms caused by disruption would be far greater on the former than the latter.

While it’s certainly possible that oil companies and producer states are investing suboptimally when it comes to security expenditures, they have every incentive to make reasonable security investments. What makes General Wald think his assessment of the costs and benefits of those investments are better than those of investor-owned oil companies or the incumbent governments in question?

Now, let’s assume for the sake of argument that General Wald is indeed the master of this informational universe. If the U.S. taxpayer steps in via the U.S. military to undertake needed investments, what incentive do companies or governments have to make future security investments? Why wouldn’t both parties subsequently free-ride off the U.S. taxpayer for the rest of time?

And, not to put too fine a point on it, but is it really the military’s job to protect private corporate property? Shouldn’t the oil companies be paying those costs themselves? They, after all, are making a somewhat risky bet when they put their money into these regions. If that bet pays off, they make billions. If it doesn’t, then they should bear the loss alone if they’re going to reap the gain alone. Likewise, why should the U.S. military protect the economic assets of state-owned oil companies controlled by dubious regimes?

General Wald’s justification for all of this is that an oil supply disruption threatens the foundation of the American economy. That’s bunk. Recent research suggest that GDP is simply not affected that much by oil price spikes.

The contention that “we” aren’t doing enough to hedge against the possiblity of terror attacks on the oil supply infrastructure invites the question of just exactly who is this “we”? Market actors are building up oil inventories at a breakneck pace and an unprecidented amount of money is flowing into oil futures contracts. In other words, people in the market aren’t dumb. They know that a supply disruption is possible. And they’re acting on that possiblility by putting oil in the storage facilities for a rainy day.

But this is just more of the same-old same-old. Superficial bilge about energy security is the currency of the intellectual realm these days, and General Wald’s naval-gazing represents nothing new. What really got my attention was this:

In late 2002, he [Wald] was named deputy chief of the U.S. European Command in Stuttgart, which also oversees parts of Central Asia and most of Africa. The command wasn’t on the front lines of the fight then about to begin in Iraq, and officers were searching for a mission.

Well, if the U.S. European Command has no mission and nothing to do, then why not shut it down? If it’s got to cast about looking for something to worry about, it can at least pick something that it can handle. Given how thinly stretched our troops are at the moment, is it really the best use of our resources to perform this nearly unimaginable task of defending thousands of miles of foreign pipelines from rifle-fired pot-shots?