Center for a New American Security

A new report from Securing America’s Future Energy (SAFE) debunks the myth about America’s oil boom leading to energy independence.

The SAFE study, The New American Oil Boom: Implications for Energy Security, comes on the heels of recent reports that increased domestic petroleum production – made possible through technological innovations such as hydraulic fracturing, enhanced oil recovery and improvements in offshore oil production – could make the United States energy independent over the next few decades. “The nature and meaning of energy independence, however, is widely misunderstood,” the authors of the SAFE report state. “Although increased domestic oil production will have clear positive effects on the U.S. economy, it alone will not insulate America from the risks of oil dependence. This can only be accomplished by reducing the role of oil in our economy.”

The report correctly notes that while increased U.S. domestic petroleum production will have positive benefits for the U.S. economy (e.g., narrowing the U.S. trade deficit), the United States will still be vulnerable to oil price spikes since oil is a globally traded commodity with prices set by the international market. Consequently, while the United States continues to reduce its reliance on Middle East oil, U.S. security will still be tethered to developments in the Middle East given that events in the region can have immediate and lasting impacts on the price of oil, which has implications for the United States. The only solution, the authors note, is to move away from reliance on oil – that is, diversify our liquid fuel sources, particularly in the transportation sector.

The atmosphere between President Obama and Israeli Prime Minister Benjamin Netanyahu has been noticeably tense since President Obama delivered his Middle East speech last Thursday; Prime Minister Netanyahu delivered his reaction to the president’s remarks. And a meeting between the two leaders at the White House last Friday seemed to do little to improve the perception, with The Wall Street Journal noting that the meeting was “viewed by some as a low point in Washington's relations with the Jewish state.”

Perhaps one area that could potentially strengthen the U.S.-Israeli relationship is around energy security. As both leaders have made pronouncements about the challenges and concerns with their nations’ dependence on fossil fuels, energy security may prove to be fertile ground to engage in greater cooperation and improve good will on both sides.

Far more so than with Latin America, China has historical ties to the Middle East dating back to the Silk Road trading route and beyond. Over the past two decades China has been working hard to reestablish its historical presence in the region, and for good reason: The Middle East is critical for China’s energy security. In fact, its entrance into Africa, which Bailey discussed on Tuesday, was driven by a desire to decrease its dependence on Middle Eastern oil.

More so than in other regions, China must compete with already well entrenched oil relationships in the Middle East. Consequently, it has not been able to purchase stakes in oil fields to the same extent it has elsewhere. One way in which Beijing has tried to overcome the established interests in the region in recent decades is by courting the countries the West has shunned, most notably Iran. Chinese companies have replaced the Western and Asian companies that have by and large left Tehran to comply with sanctions (though in the past year its position on sanctions compliance has laudably changed). As a result, Iranian-Chinese trade spiked from 4 billion dollars in 2003, to over 20 billion dollars in 2009. That same year, Iran constituted 11 percent of China’s total oil imports, making it Beijing’s third largest supplier.  

I put this in the category of “things that really surprised me that should not have surprised me in the least.” A major theme at the gathering I attended in Jordan was the wide gulf between policy makers and the academic/science community on all things natural security.

1. The real concerns (and potentially limiting factors) about embracing nuclear energy in the Middle East/North Africa region are more extensive than I suspected. This is especially the case for: dampening tourism in areas on coasts or near lakes (given the need to locate most types of reactors near major water sources); the waste problem; and – this one surprised me most – the cost of decommissioning plants once they are retired. As a side note, several people I met also voiced concern that nuclear reactors would provide targets too attractive to potential adversaries.