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The Foundation for Defense of Democracies (FDD) and
the Institute for the Analysis of Global Security (IAGS) present:

Thirty years since the oil crisis:
Can the U.S. become energy independent?


On October 30th 2003 IAGS, along with the Foundation of the Defense of Democracies hosted a conference on energy security entitled "Thirty Years Since the Oil Embargo: Can America Become Energy Independent?"
panel 1 Milton Copulous, Dr. Ariel Cohen, Dr. Gal Luft, Cliff May, and James Woolsey
The conference began with a keynote address delivered by former Director of Central Intelligence James Woolsey. Mr. Woolsey elaborated on the nature of the war on radical Islam stating that "This will not end with an al Qaeda Gorbachev. This is a war to the death, as was the war with the Nazis." He said that the war effort requires summoning the country to a common purpose and that energy is a key component of this war. "We simply must reduce our reliance on Middle East petroleum, on oil produced by vulnerable autocracies and pathological predators."
James Woolsey
R. James Woolsey, Fmr. Director of the CIA


The first panel of the conference was titled Strategic Implications of U.S. Oil Dependency and was moderated by FDD President Cliff May. First speaker on the panel was IAGS Executive Director Dr. Gal Luft who spoke about trends in demand and supply in the oil market. He emphasized the danger of resorting to non-Middle East oil as an ultimate solution. "In the long run this policy will only create stronger dependency on the Middle East. Reserves outside the Middle East are being depleted rapidly. At current production level, in 2030 OPEC countries will control over 90% of global reserves."
Gal Luft
Dr. Gal Luft, executive director of IAGS
Dr. Luft also spoke about emerging security problems in oil rich areas such as the Caspian Basin, West Africa and the South China Sea. He warned about a new wave of piracy in areas controlled by Muslim radicals. "These groups could join forces with pirates to launch terror attacks against oil installations, tankers and pipelines. This could add a great deal of turmoil in the oil market."

Following was Dr. Ariel Cohen, Research Fellow at the Heritage Foundation, who spoke about threats to our energy supply. Dr. Cohen discussed the vulnerabilities of oil infrastructure in the Gulf and the impact of socio-economic problems in oil producing countries on our national security.
Ariel Cohen
Dr. Ariel Cohen, research fellow at the Heritage Foundation
He also warned that the rise of Iran as a regional power with nuclear weapons could add additional risks to our energy system. Finally he shared his impressions from a recent visit to OPEC's headquarters.

The third speaker was Milton Copulos, President of the National Defense Council Foundation. Mr. Copulos introduced before the participants the finding of a recent report he authored on the real cost of imported oil. The report is the most comprehensive investigation of the military and economic penalty our undue dependence on imported oil exacts from the U.S. economy. According to Copulos these economic penalties amount to $297.2 to $304.9 billion annually. If reflected at the gasoline pump, these "hidden costs" would raise the price of a gallon of gasoline to over $5.28, a fill-up would be over $105.

The second panel was chaired by Dr. Allan Hoffman, former deputy assistant secretary of energy, featuring Anne Korin, IAGS' Director of Policy and Strategic Planning who spoke on fuel choices, especially coal-based methanol, that could provide a measure of independence. Ms. Korin stated that only way the U.S. could truly become energy independent is by bringing into the market next generation transportation fuels which are not based on petroleum products. She also discussed the prospects for hydrogen economy.
Anne Korin
Anne Korin, IAGS director of policy and strategic planning
"The way to implement President Bush's vision of hydrogen based economy is by using hydrogen carrier fuels - hydrogen rich liquid fuels like methanol and ethanol whose physical characteristics are similar to gasoline - that are essentially compatible with our existing infrastructure." She said methanol, which can be produced from coal at less than 50 cents a gallon, is the best candidate to power fuel cells.

Dr. Stephen Paul, a physicist from Princeton University spoke on the various ways that fuel can be created from waste-to-fuel using newly developed enzymes to bio-mass production using corn, sugar cane and other products.

The third speaker was Adriene Wright, Director of Marketing and Partner Relations at the Electricity Innovation Institute (E2I) who spoke on the applications of hybrid electric vehicles and their increasing popularity as Americans develop greater understanding about the problem of oil dependency. Ms. Wright mentioned plug-in hybrid vehicles - rechargeable electric vehicles with auxiliary fuel tanks that don't face the range limitations of electric only vehicles - will soon be launched and urged the audience to view electricity as a fuel that can move people from one place to another no less cheaply and efficiently than gasoline.

The conference ended with an address by Congressman Eliot Engel (D-NY), a member of House committees on both energy and international relations. "Freedom from dependence on foreign oil ought to be a bi-partisan goal [...] It's a matter of American's national security. It's an essential part of the war against terrorism," he said.

In their remarks and discussions, all the assembled experts agreed that the key to energy independence is diversification of energy resources. The good news: The technology already exists to substantially achieve that. The bad news: there are still insufficient incentives to investors and insufficient political will on both sides of the aisle.

To make America energy secure we need political will, strong public awareness to the dangers of our growing dependence on hostile nations and a commitment by our leaders to implement government policies that could gradually displace oil as our main source of transportation energy.
Property of The Institute for the Analysis of Global Security 2003, 2004. All rights reserved.