America's Energy Gamble: A National Security Concern

Oil is viewed as an indispensable natural resource that protects this country's economic supremacy. It provides fuel to the nation's incessant desire to surpass geopolitical competitors in technological innovation and monetary wealth. Our nation's psyche has been consumed with the false ideal that it is prudent, albeit necessary, to be the world's unquestionable hegemonic power. But, it is precisely this deluded vision that has exposed a major strategic vulnerability. Our dependence on foreign oil and the way we use hydrocarbons pose a serious threat to America's security, economy and the health of our planet. It is not too late to take smart steps towards pursuing cleaner energy alternatives; nor is it quixotic to believe we can. What we need most urgently is renewed American leadership.

In the past, America felt that the best approach to meeting our national energy needs was through free market competition of private companies. Now, with the re-nationalization of the energy patrimony, international energy trade is increasingly being influenced by political considerations at the expense of the free play of open markets and commercial actions by competitive oil companies. Some producing nations are now utilizing these resources as active and latent strategic power to be used for political as well as economic purposes.

The economic troubles for America arise in the form of international competition. While vying for capital, American companies are now confronted in the marketplace by state-owned entities that are protected by national governments. Some of the producer states are unilaterally reneging on lucrative, previously negotiated contracts, and in some instances expelling western oil companies that have put considerable investment into new production fields. We are seeing a rise in politically-driven bilateral supplier-consumer deals. To be fair, not all state-owned oil companies are infiltrating the global political and economic sphere in adverse ways. Aramco of Saudi Arabia and Statoil of Norway are two good examples of companies that demonstrate world-class management and efficiency.

A revamped American leadership must first realize that the world has begun to play by a different set of rules concerning the energy industry. Petropolitics has always been a common theme in international relations, but the past decade has witnessed its critical alignment as a deciding factor in upholding the global balance of peace. It is now readily accepted amongst many security strategists that the structural rise in global crude oil prices has contributed to much of the geographic instability in our world today. In fact, the minimal political and social freedoms afforded to Iranians, Russians, Venezuelans, and Nigerians (among others) by their own government are directly associated with the high oil prices that flush the state apparatus with money. In response to the average global crude oil price being higher, a nation that is able to sell crude at the large markup is much more likely to erode the fundamental rights of the rule of law, free and fair elections, establishment of an independent judiciary, free speech, and fair competition amongst independent political parties. These negative trends are reinforced by the fact that the higher the price goes, the less sensitivity petrolist leaders have to how the world perceives them. The same holds for a decrease in prices and a move towards civil freedoms: the lower the price of oil, the more incentive these leaders have to move towards transparent government.

There are numerous historical examples that affirm this theory, one of which lends clarity to a common misconception. While it may be great to believe Ronald Reagan brought an end to the Cold War, the truth is there were many other overriding factors that fragmented the Soviet Union. Even Robert Kagan, a renowned neoconservative scholar, notes, "The collapse in global oil prices around the late 1980's and early 1990's surely played a key role". When the Soviet Union was officially disbanded in December 1991 the price on a barrel of oil remained at roughly $17. This markedly low price indelibly aided the reformist Yeltsin towards his woeful democratization efforts. We need only look to Putin today for similar patterns. At the time of his official inauguration in 2000, Putin was ostensibly committed to further democratizing the Russian state and strengthening diplomatic ties with the industrialized nations. Oil prices were roughly $30 a barrel. Today the price of crude hovers at $70 per barrel and Putin has been anything but democratic to the international community and his own people, pursuing programs reminiscent of oligarchic capitalism. His efforts include centralizing state power by renationalizing the Russian oil and natural gas giant Gazprom as well as numerous private businesses and institutions, intimidating former Soviet states including Ukraine and Georgia, and jailing dissenters as well as powerful industrialists he deems a threat to the Russian state. Mikhail Khodorkovsky, once the richest man in Russia and chief of the now defunct Yukos oil giant is a prime example. He is now enjoying a pleasurable stay at a dismal prison camp in eastern Siberia.

Much of the reason for these exorbitant oil prices are attributed not only to globalization fully integrating the global marketplace in which billions of new consumers from developing nations are brought into the mix, but also to a general malaise and sense of insecurity in global oil markets due to the violence in places like Iraq and Sudan, two nations rich in this resource. In fact, oil revenues are fueling the Darfur genocide. The Khartoum government exports over seventy percent of its oil production to China. In turn, eighty percent of the oil revenues received are transformed into arms provided to the janjaweed (state-sponsored death squads).

Our dependence on foreign oil and oil in general are having serious national security and planetary implications. Climate change is a horrifying reality and an ignominious contribution by man. A recent strategic report authored by some of America’s most venerable military leaders states that the consequences of not acting on this pandemic as soon as possible are dire. The report notes, “Climate change can act as a threat multiplier for instability in some of the most volatile regions of the world, and it presents significant national security challenges for the United States.” The continual burning of fossil fuels will lead to extreme weather events and increase the spread of life-threatening diseases all of which have the potential to disrupt of our ways of life and threaten our physical security. The officials further that the creation of sustained natural and humanitarian disasters “will likely foster political instability where societal demands exceed the capacity of governments to cope”.

With climate change being a universal phenomenon, some of the hardest hit peoples will be in the underdeveloped and developing regions; places where populations are most robust. The people of Africa, the Middle East and Asia will suffer dramatically. Marginal living conditions will be exacerbated, political instability will strengthen and spread, the probability of failed states will increase, and economic and environmental conditions in these already fragile areas will further erode as food production declines, diseases increase, clean water becomes increasingly scarce, and large populations move in search of resources. Weakened and failing governments, with an already thin margin for survival, foster the conditions for internal conflicts, extremism, and movement toward increased authoritarianism and radical ideologies. As a result, the U.S. will be increasingly drawn into these regions to provide sustainable humanitarian support, provide military stability to prevent the spread of extremism that will inevitably arise, and partake in reconstruction efforts once a conflict has begun.

As a nation, we continue to believe that a market-oriented, commercially competitive oil industry is the most efficient means to ensure the supply of energy at the lowest cost. We can no longer be passive about this belief. While promoting energy independence is an end result, it can only occur through gradual, coordinated steps. Granted, by any objective measure, the United States will need to import oil and gas in considerable quantities for decades to come. That is the most efficient way to supply our energy needs and to attain compromise within our highly polarized government. But, by ensuring strong safeguards in this area we can mitigate some of the instability seen in the world today. America can be a forerunner in firmly standing its ground and convincing other nations to find alternatives to importing from repressive nations.

While energy security should be our primary policy, we need to pursue new technologies and new approaches to energy. Developing an environmentally-acceptable expansion to coal use as well as pursuing nuclear power generation for electricity are two endeavors worth investing in. Eighty percent of France’s electricity is produced with nuclear power. There is no reason why we cannot do the same. Our government also needs to become more active in defending market principles in our international negotiations. We need to promote greater transparency, adherence to contractual obligations, and a dropping of barriers to foreign investment in the energy sector front.

A market-based approach that will set caps on carbon and other greenhouse gas emissions coupled with increasing federal investment in energy efficiency and advanced energy technologies are the most viable options towards creating an America that is less reliant on oil, energy independent, and safer for democracy. America and the other industrialized nations of the West serve as a model for the rest of the world to act boldly, prudently, and with utmost haste.

Unfortunately, the U.S.’s global image has been tarnished with the current administration. We have forgone and thus lost our ability to exercise what Harvard professor Joseph Nye calls “soft power”, or the ability for a nation to use diplomacy and a sharing of common values with another international actor to forge peaceful, mutually beneficial partnerships. He argues that what America needs to adapt to the changing global political climate is a “smart power” strategy. According to Nye, the United States needs to “develop a bipartisan strategy for integrating the instruments of foreign policy to help restore our standing in the world”. This can be accomplished only with new American leadership. Using the channels of public diplomacy, humanitarian assistance, foreign aid, cultural outlets, education, and technology, the US will have the leverage capacities to convince the world that first, climate change is a reality, and second, we as a planet must take aggressive measures to slow its pace. With rational global actors aboard, the coalition can then pursue unified, coordinated avenues to subvert the aspirations of repressive states. With the US committed to fostering global partnerships, less developed nations can build the capacity and resiliency to better manage climate impacts, and our national security will be ensured.