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Back to the Future of U.S. Energy Security

by Blake Clayton
June 4, 2012


The new secular reality in the U.S. oil market—declining net imports, driven by increasing domestic production and lower demand—has been making headlines for some time now. But what does decreasing dependence on imported oil mean for U.S. foreign policy?

That’s the question that’s been on my mind as I’ve looked back at a 2006 CFR Task Force Report, The National Security Consequences of U.S. Oil Dependency. It’s a fantastic study and still well worth a close read, six years later.

In hindsight, one thing that’s fascinating about the study is its context: it was written around the time that U.S. crude oil net imports hit an all-time high (2005). Back then, the notion of a Western Hemisphere oil boom—and what it might mean for the United States (and even global) economy—had not yet become the talk of the energy community. Imports had been trending higher the last two decades. Few would have predicted the reversal that has taken place in U.S. oil imports, let alone its magnitude.

U.S. Net Imports of Oil (1973 – 2011, in million barrels per day)

Since 2006, U.S. net oil imports have declined by more than thirty percent. A broad consensus of energy analysts expects the trend to continue, predicting game-changing implications for the United States and geopolitics more broadly.

So back to my opening question: To what extent is this decline in imported oil affecting U.S. foreign policy? How might a continuation of the trend affect policy in the future? One way to get at the question is to start by thinking about how you think U.S. dependence on imported oil affects U.S. foreign policy today, then imagining how a decrease in the level of dependence might alter your answers.

Here’s where the 2006 CFR Task Force Report is useful. Its authors identified five major reasons “why dependence on energy traded in world markets is a matter of concern for U.S. foreign policy.” They also examined a sixth, more tentative, reason.

I’ve listed a very abbreviated version of all six reasons below.

How much, if at all, do you think a continued reliance by the United States on oil imports would affect each of the reasons they put forward? Would it have no effect, eliminate the reason altogether, or just lessen its significance? They’re questions that Michael and I have been debating, which I now put to you.

  1.  “The control over enormous oil revenues gives exporting countries the flexibility to adopt policies that oppose U.S. interests and values. […] Because of their oil wealth, [producer] countries are free to ignore U.S. policies and to pursue interests inimical to our national security.”
  2.  “Oil dependence causes political realignments that constrain the ability of the United States to form partnerships to achieve common objectives. Perhaps the most pervasive effect arises as countries dependent on imports subtly modify their policies to be more congenial to suppliers. […] These new realignments have further diminished U.S. leverage, particularly in the Middle East and Central Asia.” Related to the second point, “All consuming countries, including the United States, are more constrained in dealing with producing states when oil markets are tight.”
  3. “High prices and seemingly scarce supplies create fears—especially evident in Beijing and New Delhi, as well as in European capitals and in Washington—that the current system of open markets is unable to secure supply. The present competition has resulted in oil and gas deals that include political arrangements in addition to commercial terms.” Although they have “little effect on world oil and gas markets because the volumes affected are small,” these arrangements are “worrisome because they lead to special political relationships that pose difficulties for the United States.”
  4. “Revenues from oil and gas exports can undermine local governance. The United States has an interest in promoting good governance both for its own sake and because it encourages investment that can increase the levels and security of supply.”
  5. “A significant interruption in oil supply will have adverse political and economic consequences in the United States and in other importing countries.”
  6. “Some observers see a direct relationship between the dependence of the United States on oil, especially from the Persian Gulf, and the size of the U.S. defense budget.” That said, “U.S. strategic interests in reliable oil supplies from the Persian Gulf are not proportional with the percent of oil consumption that is imported by the United States from the region.” Furthermore, “Even if the Persian Gulf did not have the bulk of the world’s readily available oil reserves, there would be reasons to maintain a substantial military capability in the region.”

Post a Comment 4 Comments

  • Posted by Purgatus

    The point is well made; even if the U.S is not directly importing as much oil from “certain countries” those countries are still exporting their oil somewhere, and the buyers of that oil will still be very aware of that relationship. In addition, oil exporters will still have massive oil revenue streams, even if that stream is somewhat less derived from American buyers. That revenue stream enables belligerent policies and undermines good governance.

    Most of the other concerns are directly related to the global balances of supply and demand, and the consequences of supply interuption/global price increases. Thus U.S. decreases of imports are only relevant in that sphere insomuch as they are reflective of a global loosening of supply constraint, and/or a global transitioning of supply from less reliable suppliers to more certain suppliers.

    So overall I think we might see a shift in the right direction, but nowhere near as much as might be anticipated (or hoped for).

    It seems that natural gas fracking technologies will do more to shift security concerns than would an increase in domestic oil supply.

  • Posted by Zach

    Agree with previous comment that these reasons will not be overly affected by U.S. decline in oil imports especially at a time when demand is surging elsewhere particularly in Asia. One interesting aspect though is that, while the U.S. never relied on the Persian Gulf for a whole lot of its own oil, as this reliance decreases further while countries like China, India and others become increasingly dependent on that oil, U.S. should try to reduce its own role in the region while forcing these larger consumers to play a bigger role. Less directly, a less reliant U.S. could pursue policies (increase strategic reserves, find more efficient ways to export unconventional sources) aimed at reducing the leverage potentially hostile powers have over U.S. allies. This could involve Iran and the Strait of Hormuz (if it later gains capability to actually close down shipping) but more importantly Russia and Europe.

  • Posted by Ryan

    It is good to flag #6 as suspect. This was written when the past administration was still trying to justify our invasion of Iraq, which no one labeled an “oil war.” Of course the recent drop in oil prices is largely attributable to gains in Iraqi production, which many now attribute to our military effort. Might as well call it like we see it. Iraq was a resource war from the get go. Obama may get re-elected on the price drop, but we can thank W (and the “higher powers” he consulted before the bombing of Baghdad).

  • Posted by Matt

    Again, I agree that the shift in power is not going to be as great as might be anticipated from the question taken at face value. While there is definitely a transfer of power (and wealth) from consumer nations to producer nations, the decrease in oil demand from the US is going to be cancelled out by the increase in demand from developing countries. That said, the US still holds considerable sway first in terms of our ability to pay our debts, and second, in terms of other technology / products / equipment that producer nations want.

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