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Report: US oil boom won’t end price shocks, military commitment
A group of corporate officials and retired military brass is throwing cold water on claims about the benefits of the U.S. oil production boom.
A new Energy Security Leadership Council (ESLC) report aims to slay the “myth” of energy independence, concluding that rising domestic production won’t shield the United States from price spikes or reduce its military commitments in the Middle East. Check out the report here.
The report, to be sure, backs increased U.S. production, calling the domestic oil boom an economic plus because it will help the trade deficit and provide jobs.
But the group's report nonetheless warns that “it is important to be clear-eyed about the effect the boom in oil production will have on American energy security.”
It argues that oil will remain a global market, with consumers remaining vulnerable to price swings as long as the economy — especially the transportation sector — remains dependent on petroleum.
The report also makes the case that even as U.S. production is rising and import reliance is falling, the United States will remain as tethered as ever to securing Middle East regions such as the Strait of Hormuz, a major oil transit point.
“The fact is that the world market — on which the U.S. economy depends — derives a significant quantity of its supplies from geopolitically risky countries in the Middle East and North Africa. More broadly, the number of threats to oil flows is as high today as it has ever been, and the consequences of a disruption for the U.S. economy are just as dire,” it states.
The ESLC solution?
Accelerating efforts to break oil’s “stranglehold” on the transportation sector with continued fuel economy increases, wider deployment of electric cars, and use of natural gas in the oil-thirsty heavy-trucking industry.
Here’s a blurb:
America’s dependence on oil represents one of the most dangerous and pressing national security threats facing the country today. This threat, which is overwhelmingly a function of the importance of oil in the domestic economy, will not be substantially altered by rising levels of domestic oil production and falling imports. The fact is that as long as the United States remains dependent on oil as the primary fuel in our transportation sector, the nation will remain vulnerable to the effects of oil price volatility and debilitating price shocks. Critically, there is little the American policy apparatus can do to minimize the occurrence of volatility in oil prices, as it is primarily driven by events in dozens of consuming and producing countries around the world. The oil market is truly global in nature and scope.
