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Oil Dependency: a Subtle but Serious Threat

Oil Dependency: a Subtle but Serious Threat

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Weapons of mass destruction, terrorism, and cyber crime are in the headlines as significant threats to our national security.  However, over the next twenty to thirty years, America’s overwhelming dependence on oil presents subtler, although no less serious, threats to national security.

The U.S. is the largest consumer of oil in the world, burning through 18.83 million barrels per day. Even if the U.S. produced all petroleum products domestically, Americans would still feel the shocks from market volatility. Oil is a global market, and market prices prevail regardless of origin. Despite policies to improve vehicle efficiency, America remains dependent on oil. This dependency presents several threats to U.S. national security.32256-C-0538-Oil-Well-at-sunset

First, oil price volatility hampers American productivity and consumers. Economic vitality requires stable prices, as spikes in oil prices may reduce output and wages while increasing inflation and interest rates. Most commonly, consumers feel these disruptions at the gas pump. The transportation sector alone consumes 13.223 million barrels of petroleum per day. Petroleum facilitates the functioning of these critical transportation networks, and small disruptions may lead to cascading price dumps.  As volatile oil prices destabilize the economy, they jeopardize U.S. interests and national security.

Secondly, U.S. oil dependency distorts foreign policy. The U.S. imported 40% of its petroleum products in 2012. In order to ensure foreign oil security, the U.S. supports regimes it might not otherwise. Many oil-rich Islamist regimes in the Middle East receive de facto support from America in return for producing stable oil, despite conflicting ideologies and interests. Similarly, estimates show that extended military operations to guard oil supply lines cost the U.S. military $67.5-$83 billion per year. This dependency is costly and conflicts with the national security agenda.

Lastly, oil dependency undermines military preparedness and effectiveness. The Department of Defense consumed 117 million barrels of oil in 2011 in order to fuel the military’s vehicles, ships, and planes. The military must complete its missions, and without fuel options, it must endure oil price fluctuations. For every 25-cent increase per barrel of oil, the Department of Defense pays an additional $1 billion in fuel costs per year. Additional fuel costs means the military has to cut costs elsewhere, which have negative impacts on security and military preparedness.

Military energy security requires reduced consumption of petroleum products, yet the Department of Defense depends on oil for 80% of its energy needs. The military may reduce consumption by reforming energy-intensive activities, optimizing energy usage, and developing innovative technologies to reduce energy waste, but sequestration budget cuts will slash future investment.

Instead of focusing solely on drilling for more oil, the U.S. must pursue a two-pronged approach that focuses on reducing oil demand while at the same time makes investments in developing alternative fuels. Clean energy technologies could cut imports by 44% which is nearly eight times more than potential domestic drilling production. Greater efforts to improve vehicle efficiency through corporate average fuel economy standards (CAFE), congestion charges, or fuel taxes can contribute to reducing oil consumption.

Moreover, America’s oil dependence saps the U.S. economy because consumers lack fuel options.  To that end, investments in alternative sources of fuel – biofuels, natural gas, electric vehicles – can act as a hedge against oil price volatility. Throughout 2012, the U.S. spent $4.36 billion on energy research, which fell well below IEA recommendations. Due to budget caps and sequestration, energy research funding will drop substantially over the next few years.

Oil dependency is a long-term threat. The rising cost of oil dependence affects all aspects of American society and threatens national security. If the U.S. wishes to reduce these threats in the future, the U.S. must properly fund energy research and development to commercialize technologies that will break America’s oil dependency. Only then can we say we have actually achieved energy security.

 

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