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Mobility Choices for Energy Security

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Freedom of movement is important to us all. Our mobility is dependent on free access to energy, and most of our transportation energy is derived from oil. But while we in the U.S. consume 25% of the world's oil, we own only 3% of the world's conventional oil reserves. The U.S. has the largest oil consumption per head, and spends hundreds of billions of dollars per year on oil imports. In 1973 (Arab Oil Embargo) we imported 35% of our oil needs. That percentage has waxed and waned over the years with little impact on the price of oil. The cost per barrel of oil, and the amount Americans spend on oil imports overall has grown and grown.

Since two thirds of global oil reserves are located in the politically unstable Middle East, ensuring free access to oil forces the U.S. to maintain a military presence there. This presence costs the American tax payer more than $50 billion per year in defense spending in non-war years. More critically, this presence has been a rallying cry for anti-Americanism and Islamic fundamentalism which, in turn, brings terrorism and poses lethal threats to America and its allies. Volatility in the notoriously unstable region sometimes leads to oil price shocks and market disruptions.

"The wealth produced by oil underlies the power of the three totalitarian movements in the Middle East that have chosen to make war on us: the ruling Iraqi Baathists and Iranian mullahs, and al Qaeda, which was spawned by Saudi money. [..] We are at war. We should start by asking what we can do, as soon as possible, to undercut our enemies' power. Other considerations should now follow, not lead. [..] If we do not act now, we will leave major levers over our fate in the hands of regimes that have attacked us or have fallen under the sway of fanatics who spread hatred of the U.S., and indeed of freedom itself. [..] For all of them, their power derives from their oil. It is time to break their sword." - R. James Woolsey, CIA Director, 1993-95, Wall Street Journal, September 18, 2002

The inordinate strategic importance of oil has other dimensions. During the last several years China has become the fastest-growing consumer of oil. By 2030, according to the International Energy Agency, it will import as much oil as the U.S. does now, an eightfold increase over its current import levels. China's increasing need for imported oil would increase its involvement in the Middle East, bring it closer to terrorist-sponsoring governments like Iran and Iraq, and could compromise U.S.-China relations. Free flow of oil revenues into the coffers of Middle East dictatorships allows them to sponsor terrorism, acquire weapons of mass destruction, and sustain corrupt political systems that create more frustration and anger among their disenfranchised populations.

Transporting oil from the Persian Gulf to major markets in the U.S., Asia and Europe is becoming an Achilles heel of the global economy. When pipelines, tankers and oilrigs become targets for terrorists trying to bring the international economy to a standstill, the effect on our pockets will be felt through higher insurance costs, supply problems and volatility of international financial markets.

Prosperity, democracy and security all hinge on a cheap, clean, uninterrupted flow of energy. It is therefore in our strongest national interest to adopt a comprehensive energy strategy to decrease the importance of oil to the economy. Oil's virtual monopoly over transportation fuel is a challenge to our economic security. Moreover, it is a matter of national security.

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