National security experts agree: Bust up Big Oil monopoly

With the six-year-old policy hitting its stride, predictably, the international oil industry is howling for repeal. And now some on Capitol Hill believe the EPA and/or Congress are poised to respond by either lowering renewable fuels requirements for 2014 or possibly permanently altering the RFS.
 
Meanwhile, last week, leaders of a different sort solemnly observed the 40th anniversary of the event that helped propel the country’s pursuit for alternatives to petroleum and the eventual passage of the RFS under George W. Bush’s administration.
 

ADVERTISEMENT
They are former secretaries of State, Defense, Homeland Security, Navy and Air Force who served under both Republican and Democratic administrations. They also count among their supporters national leaders from private industry, including the former president of Shell Oil, as well as former oil man T. Boone Pickens.
 
And they paused to remind the American public of the devastating results of the Arab Oil Embargo that began in October of 1973. Following the aggressive act by Arab members of the Organization of the Petroleum Exporting Countries (OPEC) to terminate exports to the West, Americans saw their gasoline prices soar fourfold setting off a decade-long recession.  U.S. military involvement in Middle Eastern conflicts escalated consistently over the four decades that followed.  These include the Iran Hostage Crisis, three full-scale wars in Iraq and Afghanistan, the current showdown with Syria over chemical weapons and nuclear weapons showdown with Iran.
 
Today the aforementioned national security experts and their supporters lead the U.S. Energy Security Council (USESC), an organization that is scathing in their conclusions of how the combination of current U.S. oil dependency and a lack of diversity in transportation fuels choices are affecting both our economy and our national security:
 
“Oil’s strategic importance stems from its virtual monopoly as a transportation fuel. Today, 97 percent of transportation fuel is petroleum based. During the past four decades since the Arab Oil Embargo the policy consensus has been that if we only increased our domestic production of oil and/or learned how to use less of it we would be energy secure.
 
“We have done both: America’s domestic crude production is at its highest since 1992 and our vehicles are more fuel efficient than ever. As a result America’s oil import dependency has dropped from 60 percent in 2005 to 36 percent today, and it may drop further still. But none of this seems to have affected the global price of crude or the price of gasoline Americans pay at the pump.
 
“On the contrary, while our import dependency slumped, our foreign oil expenditures nearly doubled, the share of oil imports in the overall trade deficit grew from one third to nearly a half and American motorists pay in real terms more for fuel than ever before. Clearly something is wrong with the paradigm.
 
“What is needed is a competitive transportation fuel market in which a variety of energy commodities can vie with petroleum for market share. As long as the vehicles rolling onto our roads can essentially run on nothing but oil based fuels, and consumers are thus thwarted from making an on-the-fly choice among different fuels, America will remain susceptible to oil price hikes emanating from the Middle East to the detriment of our economy and national security – no matter how little oil we import from that region.”
 
In other words, despite claims by the oil industry, the USESC concluded that advances in drilling technologies and growing the domestic oil supply – even if oil imports were reduced to zero – gasoline prices are not significantly affected because it is global demand, and conflict, that determines the value of petroleum on the international market.
 
Probably surprisingly to some, the newspaper of choice for free market advocates expressed a similar opinion when Egyptian turmoil boiled over this summer:  “The return of geopolitical concerns to oil markets has dimmed hopes that a U.S. shale boom could put a lid on the prices motorists pay at the pump,” according to the Wall Street Journal’s Energy Journal.
 
The majority of attacks on the RFS have focused on conventional ethanol. It is easily the most visible of renewable transportation fuels, making it an obvious target.
 
Yet biodiesel producers and our allies in the next generation of fuels recognize that it’s an attack on all fuels that threaten petroleum’s stranglehold on the market. And losing this critical program would devastate efforts to bring stability in fuel prices, tangible energy security and cleaner air for generations to come.
 
But don’t take my word for it. Listen to any of the stewards of our national security interests since President Richard Nixon, at the height of the embargo, initially considered seizing Middle Eastern oil fields.  For instance, President Ronald Reagan’s former National Security Adviser, Robert McFarlane:
 
"It is past time to recalibrate our national thinking on oil to a more accurate problem definition and thus reduce the strategic importance of oil with its attendant national security implications, and reduce the Nation's vulnerability to oil price shocks."

Haer is a vice president of the Renewable Energy Group, one of North America’s leading biodiesel producers, and chairman of the National Biodiesel Board.

More in Energy & Environment

Open US crude oil exports to Mexico

Read more »