Increasing Global Security Challenges for the US

In New England, we spend approximately $45 billion per year to import energy into our region.  In recent years, this amount has increased significantly, pulling even more economic resources away from other uses.  Our dependence on a depleting resources brought in from other regions and from around the world places an extraordinary burden on our economy and our citizens.  Our economy has benefited to an extraordinary degree from easy access to inexpensive energy over the past one hundred years.   In fact, during most of that period, from the 1920s until 1973, energy prices were steadily decreasing, due to increasing economies of exploration, production, refining and distribution.  

In 1971, with regards to oil, the game started changing with the advent of peak production of oil in the lower 48.  Secondly, in 1973 OPEC realized that they held sway over international markets, and instituted an oil embargo to punish the United States for their support of Israel in the Yom Kippur war.  Overnight, oil prices went up approximately 70%, and the United States was facing physical shortages of oil, requiring rationing.  In 1950, the United States was slf sufficient in terms of energy.  By 1973, the United States was importing approximately 35% of its oil from abroad. 

As a result of the oil embargo, in addition to the economic penalty associated with a significant price rise, the United States was forced into an economic recession.  I recall hearing one person apparently purchased their own gas station to ensure access.  The impact on the American psyche was extraordinary and remains a core element behind our country's global policies regarding maintaining physical access to oil fields, pipelines, refineries and distribution facilities around the world.  In the seventies, the lesson learned by the United States was that our very way of life was somehow not in our hands anymore, was placed in jeopardy and was fundamentally threatened.  In the absence of alternatives, it would almost seem reasonable to build, own and operate a network of 850 military bases around the world, as the remaining superpower, to secure access to oil, the life blood of our economy, at any cost.

Fundamentally, oil is a global resource that has been central to our phenomenal prosperity, but it is now a resource that is increasingly being concentrated in the hands of counties less aligned to the needs and interests of the United States.  The oil majors are  loosing out as many OPEC countries with unelected leaders are controlling all aspects of the oil process.   When coupled with declining  reserves outside of OPEC, this leaves the American and European oil companies with declining world influence and declining access to sufficient reserves to counterbalance their predicament.  ExxonMobil, for example, reported that their oil production declined 8% between 2006 and 2007.  These forces point to declining security of our oil lifelines, reduced influenced in the world, and, when coupled with increasing demand from China and India, points to a more constrained oil market, less direct influence for the United States, and a need to greater military resources being deployed over time to secure access to the oil fields around the world.  This does not paint such a great picture for our future.