Washington, DC, September 23, 2008 - Yesterday markets witnessed the single biggest dollar jump in the price of crude oil in history. While the concept of “peak oil” – the notion that the world is running out of oil – remains controversial, it is certainly realistic to think ahead about the national security and foreign policy consequences of a world in which there is not enough oil supply to meet demand.
In a September 2008 Center for a New American Security (CNAS) working paper titled Peak Oil: A Survey of Security Concerns, Wall Street Journal reporter Neil King, Jr, makes the case that peak oil is already here and we are facing the consequences now:
“The world faces an energy challenge more dire than at any time in recent history. Oil prices have shot to record levels not due to some political upheaval, as with the 1973 Arab oil embargo, nor because of war and strife, as after the 1979 Iranian Revolution and the ensuing Iran-Iraq war. Deeper and more fundamental forces are driving prices this time, ranging from galloping demand in Asia and the Middle East to skyrocketing costs to discover and develop new oil basins.
Whether the world now faces a lasting oil-supply crunch is a debate that echoes across the Web and dominates oil gatherings from Abu Dhabi to London. Has the world passed the all-time peak in oil production, as the growing peak oil crowd believes? Or is the dramatic run-up in prices over the last several years simply a historical anomaly—a big bump in a road that will soon flatten out?
Many of the biggest names in the oil industry now agree on one point: That whatever the ultimate cause—be it political or geological—the world is now entering a new era of high energy costs and constrained supplies…The current world order has been built on cheap and abundant oil more than any other commodity. Without it, the United States could not have established a global military posture reaching from the shores of Italy to the Pacific outpost of Guam. Nor would the world have seen the breakneck industrialization and economic growth of the last century, much of it driven literally by the U.S. model of upward mobility and individual consumption. Oil, and the need to protect it, secure it, or fight over it, have figured prominently in nearly every major war of the modern age.
Those impulses will only increase in an age of scarcity—and with a cast of players far more complicated than during any earlier energy crisis.”
With oil prices rising to record highs through most of this year and this latest reminder of the volatility of prices, King’s paper is timely, shedding light on many of the security challenges the nation might face, possibly in the near future. Please visit http://www.cnas.org/ to read the full working paper, and learn more about ongoing energy security work at CNAS at www.cnas.org/energy/.
The Center for a New American Security (CNAS) is an independent and nonpartisan research institution that develops strong, pragmatic and principled national security and defense policies that promote and protect American interests and values. CNAS leads efforts to help inform and prepare the national security leaders of today and tomorrow.