Oil dependency, national security

By Dr. John Scire

For the Appeal

In the last 32 years, oil imports have increased from 35 percent of total U.S. consumption in 1974, to 66 percent in 2006. During the same period, U.S. oil consumption has grown by 30 percent. This wouldn't be a national security issue if all the oil came from safe places like Canada and Mexico, but it doesn't. Oil from unstable countries and/or countries that are a threat to the U.S. is known as Insecure Oil.

Insecure Oil currently comes from Saudi Arabia, Venezuela, Nigeria and several other smaller Middle Eastern exporters. According to the U.S. Energy Department, we import 1.4 million of barrels of oil per day from Saudi Arabia along with 800,000 barrels from other Persian Gulf states, 1.4 million barrels from Venezuela and 1.1 million barrels from Nigeria. At $100 per barrel, the U.S. will be sending $51 billion a year to the Saudis alone in 2008. Oil dependency from unstable or hostile countries has huge economic, military, national security, and political implications for our country.

The Economic Costs

The economic costs include net capital outflows, loss of competitiveness in world markets and the costs of supply and demand disruptions. In 2007, estimated net capital outflows from the U.S. to oil exporters exceeded $150 billion. The money used to purchase oil today is not repatriated in purchases of U.S. goods and services by oil exporting states as it was in the 1970s. As a result, the American economy loses $150 billion every year and that money only increases other countries' competitiveness.

Supply disruptions are another economic cost of dependency. In a 2003 report, the National Defense Council Foundation (NDCF) estimated total costs to the American economy from supply disruptions in 1973, 1979, and 1990 at $2.3 to $2.5 trillion.

A new term, demand disruption, has recently emerged in the financial press to explain the current high price of oil. Demand disruptions occur when demand exceeds supply. While supply disruptions tend to be short-term and fairly easily resolved, demand disruptions are longer-term and much more difficult to resolve. Other than paying up for oil and suffering the economic consequences, our only solution during extended demand disruptions would be to be capable of rapidly switching to alternative motor fuels or other means of transportation.

Military Costs

The 2003 NDCF study estimated fixed costs to maintain U.S. forces to keep the oil flowing from the Persian Gulf at about $49.1 billion per year. This figure does not include costs of the current war in Iraq, only the annual portion of the DoD budget dedicated solely to the Persian Gulf area. The figure climbs to $137 billion per year when Iraq war costs are added into the equation.

National Security Impacts of Oil Dependency

DoD's dependency on oil as a primary motor fuel makes military operations much more costly than if it had alternative fuels. Oil dependency also requires that we dedicate military forces to the Persian Gulf area, reducing our ability to use those forces in other places. Furthermore, the U.S. military presence in the Middle East raises the potential for military conflicts with other importing nations as world demand increases and supplies decrease. Our oil dependency also strains military alliances, such as NATO, as members compete for oil. Witness the French and Germans working with the Iranians to increase oil production and Pakistan building a port to import Iranian natural gas while we are trying to stop the Iranian nuclear program. Their need for oil and gas trumps our need to stop Iran from obtaining nuclear weapons. The last and perhaps most serious impact on national security of our oil dependency is that the chronic weakening of the U.S. economic base will inevitably weaken our military; we cannot sustain a strong military with a weak economy.

Political Impacts

Oil dependency forces the U.S. to support oil regimes that oppress their citizens. As a result, other states and the citizens of oppressive oil regimes see the U.S. as their real enemy. It isn't surprising that Osama bin Laden's first Fatwah was against the U.S. for stationing troops in Saudi Arabia to protect the oppressive Saudi Royal Family. U.S. oil dependency also strengthens worldwide Islamist terror campaigns as funding for these groups comes primarily from Middle Eastern Islamic charities, located primarily in Saudi Arabia. Because of oil dependency, we both motivate the terrorists and provide the money to fund their attacks on us.

American oil dependency also strengthens other states opposed to American foreign policy interests, such as Venezuela and Russia. Foreign policy options are further reduced when other oil importing countries, such as China, block our UN Security Council resolutions targeted at their sources of oil. This has already occurred in regard to Sudan and Myanmar.

Reducing Our Oil Vulnerability

In November 2007, the U.S. imported about 12 million barrels of oil per day (mbd). Of the 20 mbd we use every day, 13 mbd (65 percent) are used for gasoline and diesel fuel. To lessen American dependency on just the Insecure Oil would require cutting motor fuel usage by 4.7 mbd or 36 percent. This is achievable today by building and buying cars that are more efficient, increasing the use of biofuels such as ethanol, switching to hybrid and plug-in hybrid electric vehicles (PHEVs), and changing our driving habits.

The long term solution to oil dependency involves both moving away from oil-based motor fuels and reducing the use of motor vehicles in general. The PHEV is the quickest way to get there until hydrogen, biofuel, electric, and fuel-cell alternatives are further developed. The average American drives less than 30 miles per day according to the DOE. The PHEVs currently in production in California from old Prius and Honda hybrids can go 40 miles without the gasoline engine ever turning on, as long as they are charged up before starting. The long term solution to our oil dependency will probably be a combination of all of the above, but nothing will happen without the national will and leadership to get started ... today. Our national security depends upon it.

• Dr. John Scire is an Adjunct Professor of Political Science at UNR, where he has taught an energy policy course for the last 10 years. Ricardo Lopez a UNR journalism student who acts as a research assistant for Dr. Scire.