The changing energy landscape is sure to pay dividends to the American economy. At the same time, a glut in shale gas has contributed to cheap natural gas prices that are lowering energy bills for American businesses. Cheap electricity prices and more affordable petrochemicals that are derived from natural gas are together paving the way for re-shoring of some manufacturing jobs that moved abroad when trends were reversed.
But unlike the economic opportunities that are already manifesting, not much has been said yet about the national security and foreign policy implications of the American energy boom. Part of the challenge comes from the fact that it is hard to assess the security implications when the future is anything but certain.
Nevertheless, national security and foreign policy planners can make some reasonable assumptions about what the American energy revolution could mean for U. Despite the insistence by some that shale gas and tight oil production will usher America to energy independence, that goal remains elusive. Oil is perhaps the most fungible globally traded commodity, with the price per barrel set globally.
Nevertheless, despite the price gap, a geopolitical crisis in the Persian Gulf , Nigeria or elsewhere would affect global supply, and both WTI and Brent crude oil prices would be affected.
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At those prices, some of the petro monarchies — from Saudi Arabia to Kuwait — would be in a pinch to raise the revenue needed to pay for social programs, like fuel subsidies. If those governments are forced to curb social spending, it could exacerbate some of the socioeconomic and political tensions that have contributed to revolutionary change across the Arab world recently.
Energy trade has long been an element of U. Perhaps the biggest opportunity will come from liquefied natural gas LNG exports, which could strengthen U. For example, as Japan moves away from nuclear power and increases its share of imports of oil and gas from the Persian Gulf, there is an opportunity for the United States to strengthen its strategic partnership with Japan by trading LNG. Energy trade could also be the most significant opportunity to foster greater cooperation with China. China shares many of the same energy vulnerabilities as the United States, particularly with respect to crude oil imports from the Middle East and North Africa.
The United States could potentially become a reliable trader of LNG and, perhaps one day, oil, helping Beijing offset its strategic vulnerability in places like the Strait of Malacca. Such opportunities could fundamentally transform the U.
The market may be pushing countries to double down on fossil fuels, making it more difficult to reduce global greenhouse gas emissions. The shale gas and tight oil boom is unlikely to stay isolated in the United States either. The market is calling, and the proliferation of the tools, techniques and infrastructure to produce shale gas and tight oil from Eastern Europe to East Asia will soon follow, along with the climate consequences. While increased natural gas production could displace coal as the dominant feedstock in electricity generation in the United States and elsewhere, helping slow growth in carbon emissions, cheap natural gas prices may make it more difficult for cleaner, renewable energy production to compete in the market, nullifying the climate benefits that could accrue from natural gas.
It could be a harbinger of things to come for the renewable energy sector, and may have a cascading affect on the ability for countries to reduce greenhouse gas emissions. The global energy map is still unsettled, and there is a lot of uncertainty to be sure. It is true that U. But the increase in oil imports between and cannot be accurately illustrated as a continuous upward curve on a chart or graph. After the embargo was lifted in March , U. But in , the upward trend in U. The combined efforts of three U.
Presidents created energy policies that had doubled vehicle fuel efficiency, increased oil production in Alaska, shifted electricity generation from petroleum fuel oil to non-petroleum fuels and provided incentives for homes and buildings to use alternative heating and increased insulation. By , these policies were dramatically reducing total U. A steep decline in U. New Alaska oil production helped offset falling oil production from U. The only explanation that can be supported by real numbers is the enormous volume of oil consumption that was displaced by the combination of alternative fuels, increased fuel efficiency and conservation.
The oil embargo had exposed the harsh reality that America was dangerously dependent on imported oil. The energy independence policies of Presidents Nixon, Ford and Carter had demonstrated that America can achieve strategic energy independence through political will and legislative action.
It took nearly ten years for U. For a brief period between and U. Ronald Reagan was then President of the United States. President Reagan had abandoned the energy independence policies of his predecessors in favor of a free market policy, where private industry would provide all of America's energy needs without government interference. In , gasoline was plentiful and relatively inexpensive. Middle East oil prices were low. Without a national energy independence policy, the temptation to return to old habits was just too great.
Like a recovering alcoholic taking a drink after a long rehab, the American economy began falling back into dependence. If the energy independence policies of Nixon, Ford and Carter can be thought of as analogous to a relay race in the Olympic Games, where each President hands the baton off to the next, sharing a common goal of winning the race, then President Reagan did not just drop the baton, he threw it away and canceled the race. President Reagan was elected in and assumed office January , in time to reap the rewards of energy independence which were already beginning to dramatically reduce U.
President Reagan did continue to give voice to the vision of energy independence, not by way of a national energy policy, but an independence that would result from unleashing the productive capability of the free market, thus leading Americans to believe that the free market would supply all of America's energy needs.
And perhaps that would have happened if the Reagan administration had adopted the proposed price floor guarantees for American energy companies investing in the development of America's abundant oil shale resources. By , investors already could see that the price of oil on the world market would soon fall below a level were shale oil would be economically competitive without some form of government support.
President Reagan had argued in favor of price floor guarantees in the form of offering long-term purchase agreements with the U. After learning that Reagan would not support the industry, Exxon abandoned its billion dollar oil shale investment in Colorado. Synthetic Fuels Corporation was created by Congress in for the purpose of helping to fund private synthetic fuels investment in America.
The Synthetic Fuels Corporation Act authorized up to 80 billion dollars, a figure often cited as the actual cost to U. However, before it was abolished in , the U. Synthetic Fuels Corporation had cost the U. Ronald Reagan's vision of a global free market, inspired by economist Milton Friedman, created an unwritten federal energy policy limiting the government's involvement in U.
Reagan's global free trade policy had set the stage for increased oil imports. Without a national energy independence policy defining oil as a strategic commodity and energy independence as a strategic policy, the USA was heading back into the same dependence that previous administrations worked so hard to overcome. Reagan's advisors refused to acknowledge the strategic value of oil, and the vulnerability created by dependence on any strategic commodity that is controlled by a foreign government hostile to American values and economic interests. Reagan's economic advisors had advocated the idea that importing oil would be no different than importing shoes and socks and refrigerators.
Of course, the American people did not fall for that nonsense, it had escaped their attention, because the price of gasoline had already gone back to acceptable levels and the people had returned to their normal lives, trusting their government to do what is right. Contrary to the popular belief that Ronald Reagan boldly deregulated oil prices and thereby increased production of oil in the U. The executive order signed by President Reagan ended price controls abruptly, eight months before full decontrol would have automatically taken effect by law, as set forth in the Energy Policy and Conservation Act of Decontrol of oil and fuel prices failed to stimulate a significant increase in domestic oil production, contrary to some opinions often heard today.
However, decontrol did allow increased imports of gasoline and other fuels, which caused the price of gasoline to suddenly fall. It was the increased gasoline imports that led people to believe that Reagan's energy policy was working. The immediate relief at the pump was what people remembered. President Nixon had initiated price controls in , before the oil embargo, for the purpose of containing surging inflation; a technique that was both effective and necessary during World War II, but was almost certainly an act of political desperation in The Energy Policy and Conservation Act of , signed into law by President Ford, extended Nixon's oil price controls to , authorizing the President of the United States to end price controls in if the President determined that ending controls at that time was in the best interest of the country, but if the President chose not to exercise the option, the Act specified that government control over the price of oil would automatically cease at the end of September In a nationally televised address on April 5, , President Carter announced a phased decontrol of oil prices that would begin June 1, and continue at a uniform rate of reduction over 28 months, at which time decontrol would be completed, in compliance with the September deadline required by the Energy Policy and Conservation Act.
Carter faced opposition by Unions and Congressional Democrats, but he did it anyway. During the presidential campaign Reagan had promised to repeal the Windfall Profit Tax, but he allowed the tax to continue through both terms of his presidency, until when, on August 23, he signed the Omnibus Trade and Competitiveness Act of which finally repealed the tax. The USA is the world's largest consumer of oil; the dramatic reduction in U. It would be accurate to say that every U. The USA is the only country in the world that imposes that limitation on itself.
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It is a self-defeating limitation reminiscent, metaphorically, of how the British Army fought the American Continental Army during the American Revolution, where the British soldiers stood in the open, on principle, wearing bright red uniforms while the colonial soldiers shot at them from behind trees. The American colonies won their independence because they acted, as a nation, in their own self-interest, willing to do whatever it took to accomplish their goal — Independence. What might he have been thinking? But, by the God that made me, I will cease to exist before I yield to a connection on such terms as the British Parliament proposes; and in this, I think I speak the sentiments of America.
I answer no; the idea never entered a single American's head until a most intolerable oppression forced it upon them What are his first thoughts?
Forward to recent history — a relevant comparison: The purpose of the embargo was to force political concessions from the United States. Before the embargo, Americans had never thought of energy independence. Electric Utility Companies responded to the threat of the Arab oil embargo by replacing petroleum fuel oil with USA coal, nuclear energy and natural gas to power their generators. The USA no longer depends on petroleum to generate electricity for the power grid.
Energy Security and Energy Independence
The USA is not dependent on foreign sources of energy for electricity generation. Automobile industry must do today what the U. Electric Utility industry did over 35 years ago — Kick the oil habit!
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Seventy percent of all oil consumed in the USA is used for transportation fuel—gasoline, diesel and jet fuel. American Energy Independence will be achieved when American drivers can fill their cars and trucks with non-petroleum fuels. Today, cars and trucks use gasoline and diesel made from petroleum.
Technology exists today that can enable all cars and trucks to run on USA biofuels, natural gas, synthetic fuels and electricity. The Saudi Connection — How billions in oil money spawned a global terror network. It is an austere form of Islam that insists on a literal interpretation of the Koran. Strict Wahhabis believe that all those who don't practice their form of Islam are heathens and enemies. Critics say that Wahhabism's rigidity has led it to misinterpret and distort Islam, pointing to extremists such as Osama bin Laden and the Taliban.
Wahhabism's explosive growth began in the s when Saudi charities started funding Wahhabi schools madrassas and mosques from Islamabad to Culver City, California The United States consumes 20 million barrels of oil products every day. Replacing petroleum fuels gasoline and diesel with non-petroleum alternative fuels would completely eliminate dependence on OPEC oil—and set an example for the world to follow.
How much has the war in Iraq cost? How much does Homeland Security cost? How much has the war in Afghanistan cost? How much has the U. How much did the destruction of the World Trade Center cost? What vast additions to the Conveniences and Comforts of Living might Mankind have acquired, if the Money spent in Wars had been employed in Works of public utility! Invest in Energy Independence. How America solved its last energy crisis and cut oil imports in half.
Its History; by John H. Home About Us Site Directory. Military Initiatives Public Works. National Security Why is energy a national security issue? Energy is the lifeblood of the American economy.