Energy Security

• America's Energy Habit
• The High Price of Oil Dependency
• Preparing for a Cleaner, more Energy Efficient Future
• Biofuels
• Nuclear Power
• Ending Our Oil Dependency: Future Initiatives

America’s Energy Habit

 Energy is vital to every aspect of Americans’ high standard of living, but the steady availability of energy resources such as oil and natural gas is taken for granted. In his 2006 State of the Union address, President George W. Bush acknowledged, “America is addicted to oil.”¹ Every day, Americans use almost 20 million barrels of oil, most of which fuels our transportation needs (particularly passenger vehicles, which account for 40% of the oil used).² The United States spends a staggering amount of money on foreign oil—at recent price levels estimates vary from $13- $18 million every hour—to satisfy the growing domestic needs.³ Despite these costs, the demand for oil is increasing at an alarming rate. Experts estimate that if the energy requirement grows at its current pace, the world will need 50% more energy than it does now in just 25 years⁴ — with about 40% of the total amount of energy being supplied by oil.⁵

The United States’ dependence on foreign sources of oil is inherently problematic. Americans consume about 25% of all the oil produced in the world,⁶ but the United States controls only 3% of global sources of oil.⁷ Most of the oil that America imports comes from the Middle East, which supplies the United States with 2.5 million barrels of oil each day.⁸ Reliance on technology that requires oil to operate, coupled with dependence on other countries for oil, creates a growing dilemma for the United States since the country is vulnerable to price fluctuations and supply shocks.

Resources:

“Oil: The Illusion of Plenty” from the Bulletin of Atomic Scientists

"Background: The United States - A Country Analysis Brief" from the U.S. Energy Information Administration

 “Securing America” from Natural Resources Defense Council

The High Price of Oil Dependency

The U.S. addiction to foreign oil leads to a plethora of problems for the country. Relying on oil from sources that the United States does not control heightens U.S. vulnerability to supplier fluctuations, increases competition for a finite amount of oil supplies, 90% of which are owned by national oil companies such as Iran’s and Venezuela’s, with other large consumers in the global market, and deepens our trade deficit, hurting our economy. National security may be put at risk with these pressures on foreign relations and economic well-being. Equally important is oil’s negative impact on the environment. Burning oil harms the environment by releasing carbon dioxide into the atmosphere, which is the main cause of global warming.⁹ Carbon dioxide emissions from personal motor vehicles and buses contribute 27 percent of all global warming pollution in the United States alone.¹⁰

America’s addiction to oil leaves it vulnerable to producers, who can—to some extent— manipulate the oil market and disrupt supplies of energy resources.¹¹ The Organization of Petroleum Exporting Countries (OPEC), an oil supplier cartel, controlled the cost of oil during previous times of crisis by limiting the amount of oil its member countries could produce, thereby reducing supply and driving prices up. Today OPEC has less control over oil prices; it claims strong global demand has exhausted its excess production capacity. While some experts are dubious of these claims, pointing out that no one knows the limit to OPEC’s production capacity, the Department of Energy has confirmed that OPEC is currently pumping at capacity, struggling to meet demand.¹² While this could change in the short-term with an increase in production capacity, the long-term picture would remain the same: Overdependence on a cartel which is chasing and sometimes struggling to catch up with relentlessly rising demand.

The world glimpsed the disastrous consequences of reliance on national energy companies with dubious intentions when Russia cut off the supply of natural gas to Ukraine during a dispute over energy prices in January 2006. To lessen the potential impacts of this vulnerability, the United States has devoted extensive military and economic resources to unstable regions that control the supply of oil, especially in parts of the Middle East, where the United States has repeatedly become embroiled in conflicts in part to defend its national energy interests.¹³ Dependence on foreign oil also makes America vulnerable to disruptions in oil supply caused by natural disasters and terrorist attacks targeted against oil infrastructure, such as attacks on oil pipelines in Nigeria and the failed attack on an oil processing plant in Saudi Arabia.¹⁴

Some energy experts warn that future competition over oil could lead to conflict between the United States and countries like India and China, both of which have rapidlygrowing demands for oil. With a booming economy, China is the world’s second largest consumer of oil, increasing oil consumption by about 7.5% every year –a rate about seven times faster than that of the United States.¹⁵ To fulfill this demand, China is strengthening its relationships with large exporters of oil to America, such as Venezuela and Canada, as well as with suppliers of oil in the Middle East. Increased Chinese trade with America’s traditional energy supplierscould intensify competition between the two countries and add tension to the U.S.-Sino relationship, since both countries will increasingly be competing for access to the same finite oil reserves.¹⁶ Other experts, such as Daniel Yergin, Chairman of Cambridge Energy Research Associates, suggest that instead of trying to achieve a monopoly over oil trade, the United States would be better off to cooperate with India and China through trade and investment, as well as striving for conservation and diversification of fuel sources.¹⁷

America’s dependence on foreign oil also results in increasing economic costs, as the expensive imports contribute to the deepening U.S. trade deficit. This problem has expanded in recent years, and oil imports now account for one-third of America’s total trade deficit – a substantial increase since 2004, when oil imports made up one-fifth of the trade deficit. ¹⁸Increases in the trade deficit are detrimental to the U.S. economy since they weaken the dollar, making America less attractive to foreign investors.¹⁹ Additionally, as high demand drives up oil prices²⁰ costs rise for American industries and consumers.²¹

 Resources:

"Oil: More Costly than you Think" from EcoIQ Magazine

"America, Oil and National Security" from the National Environmental Trust (pdf)

"Managing the China-U.S. Energy Competition in the Middle East" form the Washington Quarterly

Preparing for a Cleaner, More Energy-Efficient Future

 In addition to these concerns about supply, the economy, and security, current and projected U.S. energy consumption patterns are problematic since oil is a finite, nonrenewable resource, meaning that at some point in the future the available supply of oil will no longer be able to satisfy the amount demanded by the world’s population. The rate of demand for oil is already outpacing the rate by which new sources of oil are found; NRDC estimates that 12 billion more barrels of oil are consumed across the world than are discovered each year.²²

While it is difficult if not impossible to predict accurately when a “peak” might occur, a hunt for substitutes for oil is underway, putting us at a crossroads with one way leading to greater exploitation of so-called “unconventional oil” and the possible use of liquefied coal. The first, alarming landmark on this road is already here: Exploitation of tar sands in the Canadian province of Alberta, where a Florida-sized portion of boreal forest has already been denuded to slake our thirst for liquid energy. Canada’s experience is a cautionary tale of environmental destruction, offering a stark contrast to other, cleaner oil substitutes including renewable biofuels such as ethanol, as described below.

To mitigate the costs of both our dependency on oil as an energy source and our reliance on foreign sources of oil, experts argue U.S. energy use should be more efficient and use cleaner, more stable sources of fuel. The following list includes popular suggestionsfor making America’s future more energy efficient:

• Increase Automobile Fuel Economy Standards: Since two-thirds of the oil used by Americans goes to the transportation sector, increasing fuel efficiency standards in cars and light trucks would reduce American gasoline consumption. This, in turn, could help slow global warming by reducing CO2 emissions, reduce oil imports to lower the U.S. trade deficit,²⁴ and give U.S. consumers a break at the pump.²⁵ U.S. standards, known as Corporate Average Fuel Economy (CAFE) standards, have remained largely unchanged since 1980, and automakers frequently find loopholes, such as classifying SUVs as light trucks, to bypass regulations.²⁶ Raising CAFE standards by 5 miles per gallon would save about 23 billion gallons of gas a year, reducing oil imports by 14%.²⁷ Fuel economy and greenhouse emissions for U.S. passenger vehicles lags behind that of many other nations.²⁸ In fact, China recently adopted standards superior to those of the U.S.

• Hybrid Cars: Hybrid vehicles are powered by a combination of gasoline and rechargeable electric batteries. Hybrids are appealing to environmentalists and consumers alike since they have lower greenhouse gas emissions than standard vehicles and save consumers money on gas.²⁹ As the popularity of hybrid vehicles grows, the vehicles are becoming less expensive, the technology is becoming available in a wider variety of types and sizes, and the types of hybrids that are available are becoming faster and more powerful.³⁰

•  Flexible Fuel Vehicles: A flexible fuel vehicle (FFV) has an engine that can run on both gasoline and an alcohol fuel (as much as an 85% ethanol, 15% gasoline blend or E85). FFVs have the potential to reduce U.S. dependence on foreign oil, and the technology is very cheap (only $50-$100 per vehicle). However, there are several drawbacks to FFVs. First, it is very difficult to find a station that sells E85 in the United States, so nearly all of the time these cars end up running on gasoline. Currently, just 1,000 of 170,000 retailers carry E85, although the growth rate is more impressive than the absolute number since that is double the number from just a year ago. Second, the dual-fuel loophole allows manufacturers to earn credit toward meeting fuel economy standards through producing FFVs. Since FFV technology is cheaper than compliance with CAFE standards, manufacturers end up selling fleets of flex fuel vehicles that do not conform to federal fuel economy standards. This loophole means that automakers get credit for saving oil where none is due since often the consumer does not even realize their vehicle is an FFV.

• Promoting U.S. Household Energy Conservation: While U.S. Department of Energy programs aimed at promoting conservation were slashed in the 2006 budget, there are a number initiatives citizens can take to make their homes more energy efficient such as installing Energy Star windows and appliances, replacing lightbulbs with compact fluorescents, adjusting the thermostat, and having a home energy audit.

• Energy Efficiency Measures for Industry Through tax incentives and energy savings, an increasing number of corporations are being to realize that going green will save them green. The Energy Policy Act of 2005 set out efficiency-related tax incentives totaling about $2.3 billion, including incentives for appliance manufacturers, home builders, and for commercial buildings exceeding energy standards by 50%. New York and Maryland were the first states to offer tax credits for green buildings, and New York City currently has 15 green skyscraper projects. Additionally, the EPA’s Green Power Partnership is working with corporations across the country to help them buy green power.

• Encourage the Development of Clean, Renewable Energy Sources: Increasing clean, renewable energy would have a variety of benefits to different sectors of American society. In the long run, consumers would save money on lower electricity bills, farmers and landowners would make money oncapital and land investment in rural areas, and tens of thousands of new jobs would be created.³¹ Cleaner fuels would also reap environmental advantages, as these fuels do not release as much CO2 into the atmosphere and emit smaller quantities of hydrocarbons than traditional fuels (the hydrocarbons they do emit are less likely to form ozone).³² Alternatives to gasoline and other fossil fuels include a variety of cleaner energy sources such as biofuels (including ethanol), wind power, solar power, and nuclear power.

Biofuels

Biofuels are versatile, alternative fuels produced from plant materials that can be used to create heat, electricity, and fuel. ³³They are produced by recycling natural matter left over from farming or by growing crops intended for energy-production, such as willow or switchgrass. Using biofuels as an alternative to traditional fuels could slow global warming (by decreasing greenhouse gas emissions); be cost-competitive with the fuels used today by 2015; result in increased profits for domestic farmers; reduce air pollution (since biofuels do not contain sulfur or emit large amounts of carbon monoxide or toxins); and promote responsible land use.³⁴ Biofuels include a variety of substances, including biodiesel, made from vegetable oil, animal fat, or restaurant grease; methanol; and, most popularly, ethanol.

Ethanol: A Win-Win Situation?

Ethanol is a biofuel made from the sugars and starches of fermented crops such as corn, wheat, and barley. Currently, ethanol is used primarily as an additive in gasoline and accounts for only about 3 percent of the fuel supply in the United States. This includes lower blends of ethanol (from 1-10%) that contribute to pollution by releasing harmful pollutants such as nitrogen oxides and volatile organic compounds that contribute to global warming. While higher blends (such as E85, a combination of 85% ethanol and 15% gasoline) hold environmental promise they are difficult for consumers to find and are only suited for alternative fuel vehicles manufactured for their use.³⁵

Ethanol’s viability as the United States’ primary fuel source is the subject of contentious debate. Critics argue that if all of the country’s farmland were devoted to ethanol production, U.S. farmers still wouldn’t provide enough ethanol to provide our fuel needs. Furthermore, ethanol production uses a lot of energy—just how much is up for debate, although a recent literature survey finds that there is a net-positive energy balance which varies in size depending on feedstock and process—and it takes 1.35 gallons of ethanol to equal the energy in 1 gallon of gas. Furthermore, significant investments would have to be made to transportation and retailing infrastructure for ethanol to become a primary fuel source; for example, it cannot be sent through petroleum pipelines and must be shipped by truck, rail, or ship.

Some environmental organizations and President Bush are optimistic about the potential of cellulosic or biomass ethanol. Instead of being made out of edible food such as corn kernels, cellulosic ethanol uses more advanced different processes to break down the cellulose of biomass, opening the opportunity to use materials such as agricultural waste products, such as corn stover, the inedible part of corn, and items like woodchips and waste paper. However, cellulosic ethanol is not yet ready for commercial use, and the federal government will need to make a significant research investment in the product for it to reach large-scale production. Once researchers develop a cost effective method of converting these waste products into energy, cellulosic ethanol holds significant potential to slow global warming and reduce America’s dependence on foreign oil.³⁶ A report by leading environmental organizations found that U.S. demand for gasoline could be nearly eliminated in 50 years with the use of cellulosic ethanol and other biomass fuels in combination with technical innovation, a doubling of fuel economy standards, and a cut in the growth of travel demand, without significant change in food crop production. The report particularly emphasizes that improvements to fuel economy will be key to the success of cellulosic ethanol.

Resources:

"Unlocking the Promise of Ethanol" from NRDC (pdf)

"Ethanol: Frequently Asked Questions" from the Union of Concerned Scientists

“New Fuel Source Grows on the Prairie,” Washington Post

Nuclear Power

Nuclear power is often proposed as an alternative clean energy source since it doesn’t emit greenhouse gases such as carbon dioxide. However, since nuclear power generates electricity, a sector that depends very little on oil (2-3 percent of electricity is generated using oil) it is a fallacy to think nuclear power can end the U.S. oil addiction. Coal-fired plants currently provide about half of U.S. energy, but account for 90% of U.S. carbon emissions. Experts, such as the authors of a comprehensive study on nuclear power at MIT, assert that nuclear power is the only non-carbon solution to U.S. energy problems and believe it should be pursued as a large-scale solution to slowing climate change.

However, there are a number of roadblocks that would need to be overcome in order for nuclear energy to be a safe and viable large-scale source of power. These roadblocks may be significant enough to prevent the viability of large-scale nuclear power in the future.

• Expense—Energy companies have been uninterested and unwilling to invest in new nuclear power plants over the last three decades due to the high cost of construction. Significant government subsidies would be required for nuclear power to expand. Yet, according to NRDC, “Global nuclear capacity would have to be increased severalfold in over the next few decades” to make a significant impact on climate change.
• Proliferation and Security Risks— Nuclear power plants use the same materials found in nuclear weapons, and experts find that the availability of these materials are key to a country’s acquisition of its first nuclear weapon. Under the Nuclear Nonproliferation Treaty (NPT), non-nuclear weapons states are allowed to acquire nuclear reactors and fissile material for the purposes of a peaceful nuclear energy program. Unfortunately, this fissile material could be used to make a bomb, uranium enrichment facilities could be used to enrich uranium for weapons, and fuel that has been used for nuclear power can be used for weapons after being reprocessed.
• Nuclear Plant Safety—The Chernobyl accident is a continuing reminder of the tragedy that can ensue from an accident at a nuclear power plant. There is also concern that U.S. nuclear plants could be vulnerable to terrorist attacks.
• Waste Disposal—Nuclear reactors produce large amounts of radioactive waste that must be stored for tens of thousands of years. As illustrated by the debate about whether U.S. spent nuclear fuel should be kept in a repository at Yucca Mountain, no efficient and safe means of getting rid of this waste has been discovered. If stored improperly, nuclear waste could present a significant threat to public health, and current storage solutions threaten low-income and minority communities around the country.
• Environmental Impacts of Mining—Uranium, the fuel that powers nuclear plants, must be mined and separated from its ore. Uranium used to be mined in traditional open-pit fashion, resulting in large amounts of radioactive residues, or tailings. In recent years, uranium has been mined through a process called uranium solution mining, which pollutes underground aquifers.

Ending Our Oil Dependence:
Future Government Initiatives

The oil alternatives above will require strong government support in order to be implemented. Initiatives are being taken on the federal, state, and local levels to work towards energy security.

Federal: In 2006 President Bush introduced the Advanced Energy Initiative, which aims to free America of its oil addiction by replacing more than 75% of U.S. oil imports from the Middle East by 2025. The Initiative provides funding for solar and wind energy and sets a goal of making cellulosic ethanol practical and competitive in six years. It also includes initiatives to make vehicles more efficient, to increase the viability for hydrogen cars, to develop clean coal technologies, and to expand the use of nuclear power.

Congressional representatives introduced bipartisan legislation, the Vehicle and Fuel Choices for American Security Act, in both the House and the Senate. The legislation establishes specific targets for reducing U.S. oil dependence, requires a plan for meeting the targets, includes new programs and incentives for making vehicles more efficient and for boosting fuel choices (such as ethanol) to provide consumers with alternatives to gasoline, makes transit investments for urban areas and creates a nationwide energy security media campaign.³⁷

 State and Local: Faced with lagging federal initiatives on energy security and climate change, state and local governments have begun their own initiatives. Mayors from 284 cities, representing over 48.8 million Americans, have signed onto the U.S. Mayors’ Climate Protection Agreement to reduce greenhouse gas emissions in their cities. Cities like Seattle and Salt Lake City have launched ambitious initiatives to green their cities. California has adopted the strongest climate change legislation in the country including a renewable energy program. New York has also adopted impressive programs for reducing the state’s oil dependence and carbon dioxide pollution.

What Can You Do?

Since individual citizens worldwide depend heavily on energy in their daily lives, reducing fossil fuel dependence begins at home. Buying products with the Energy Star label or the reusable energy label, driving a fuel-efficient or hybrid car, taking public transportation, having a home energy audit, and replacing incandescent bulbs with compact fluorescents are a few simple ways you can save energy. Energy Hog, a project of the Alliance to Save Energy, has a number of useful suggestions for kids and adults to save energy.

You can have an even greater impact by getting involved on campus or in your community. Students across the country have launched successful campaigns to bring clean energy to their campuses. Americans for Informed Democracy student organizers are initiating oil security and climate education events on campuses across the country. In Campus Climate Challenge’s Break the Addiction project, you can win a prize for developing a clean energy policy for your school. The Ecomagination Challenge is also offering awards to students with innovative energy efficiency ideas for their campuses. You can make a difference in the wider community as well: tap into the Smart Communities Network or the Energy Department’s Clean Cities initiative for more information on how you can connect with others in your area who are leaders in finding new ways to curb energy consumption and promote new sources for U.S. energy needs.

-Submitted by: Kate Amlin and Sharlissa Moore, Summer 2006

Special thanks to Deron Lovaas of the Natural Resources Defense Council for reviewing this issue brief.

Resources

1. “State of the Union Address: 2006,” President George W. Bush, January 31, 2006.

2. “Reducing America’s Energy Dependence,” Natural Resources Defense Council, Updated July 2004.

3.Estimates vary. NRDC estimates $13 million, see “Safe, Strong and Secure: Reducing America’s Oil Dependence,” Natural Resources Defense Council, October 2004. Senator Obama estimates $18 million, see Senator Barak Obama (D-IL), “Energy Security is National Security,” Speech to the Governor’s Ethanol Coalition, February 28, 2006.

4. “U.S. Energy Security – A New Realism,” speech by Senator R. Lugar (R-IN) to the Brookings Institution, March 13, 2006.

5. Alfred Cavallo, “Oil: The Illusion of Plenty,” Bulletin of the Atomic Scientists, January/February 2004.

6. “Chained: America’s Vehicles Today,” Natural Resources Defense Council.

7. “Energy and National Security,” Natural Resource Defense Council, Updated 2001.

8. “Energy and National Security.”

9. “Energy and National Security.”

10. “Unlocking the Promise of Ethanol,” Natural Resource Defense Council, February 2006, 1.

11. Senator Lugar, 2006.

12. US Energy Secretary Says OPEC Pumping as Much as it Can, Sept. 7, 2006 Reuters.

13. Senator Lugar, 2006.

14. Daniel Yergin, “Ensuring Energy Security,” Foreign Affairs, March/April 2006, 70.

15. Gal Luft, “Fueling the Dragon: China's Race into the Oil Market,”Institute for the Analysis of Global Security.

16. “Fueling the Dragon: China's Race into the Oil Market.”

17. “Ensuring Energy Security,” 77.

18. James Jackson, “U.S. Trade Deficit and the Impact of Rising Oil Prices,” CRS Report for Congress, Updated June 6, 2006, 4.

19. Poole, Lauren, "Oil: More Costly than you Think,” EcoIQ Magazine, Spring 2000.

20. Federal Reserve Chairman Ben Bernanke, “Oil and the Economy,” Speech as a part of the Distinguished Lecture Series at Darton College (GA), 2004.

21. “U.S. Trade Deficit and the Impact of Rising Oil Prices,” 6.

22. “Safe, Strong and Secure: Reducing America’s Oil Dependence.”

23. “Clean Air & Energy: Transportation,” Natural Resource Defense Council.

24. “Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards” Board on Energy and Environmental Systems of the National Research Council, 2002.

25. “Reducing America’s Energy Dependence.”

26. “Closing CAFE Standard Loopholes,” Alliance to Save Energy, 2005.

27. “New Report Shows that Within Vehicle Class Fuel Efficiency Varies Widely,” Consumer Federation of America, February 27, 2006.

28. “Comparison of Passenger Vehicle Fuel Economy and GHG Emission Standards Around the World,” Pew Center on Global Climate Change, December, 2004.

29. “Hybrid Values,” NRDC, Updated August 10, 2006.

30. Bradley Berman, “The Top Ten Hybrid Myths,” Business Week, February 13, 2006.

31. “Renewing America’s Economy,” Union of Concerned Scientists, July 2005.

32. “Clean Fuels: An Overview,” U.S. Environmental Protection Agency, Office of Mobile Sources.

33. “Wind, Solar and Biomass Energy Today,” Natural Resources Defense Council, Updated January 2006.

34.“Move Over, Gasoline: Here Come Biofuels,” Natural Resources Defense Council, 2005.

35. “Unlocking the Promise of Ethanol.”

36. “Ethanol: Frequently Asked Questions,” Union of Concerned Scientists, 2006.

37. Landmark Vehicle and Fuel Choice Legislation. Set American Free Coalition.