Oil markets are world markets. Our national security is potentially affected by the energy import structures of our allies and those with whom we have tensions, not just the import structures of our own energy systems. For example, many EU nations rely heavily on gas and oil from Russia, Iran, and Saudi Arabia. EU policies toward these energy exporters are sometimes constrained due to their energy vulnerabilities. Japan, China, and South Korea also rely much on Middle Eastern oil, with Iran and Saudi Arabia being right at the top of the oil sources for Japan and China. Chinese policy toward The Sudan is somewhat constrained due, in part, to its reliance on Sudanese oil. Our policy options toward Iran, The Sudan, and many other oil-exporting states, including Russia, are sometimes constrained due to the constraints imposed on our allies and potential allies on any policy changes or practical pressures to move things in a more positive direction, such as the US attempts at trying to solve the Iranian nuclear conundrum.

We do not import any oil from Iran according to US official statistics, but every time we import anything from another country that does import Iranian oil we are effectively importing Iranian oil. Any attempts at playing tougher with the Russians on some issues could be diluted by the EU’s extreme reliance and vulnerability toward Russian-sourced oil and gas. (The Russian pressure on Ukraine was, in part, based on the very low price that Ukraine got the natural for from Russia. It was a lot cheaper than the going price for natural gas in Western Europe. Russia also had its political motives, surely. Even so, Russia has no real direct energy leverage on the US given that we import almost no energy products from Russia.) However, national security is not just based on what happens inside of one’s country, but is interconnected with the national and energy securities of many other countries.

We import most of our oil from non-Muslim states. This, of course contradicts the common misperception of the sources of our oil being mostly from extremist sheikhs in the desert. Realities are far from this fantasy. Surely imports have been a growing proportion of our oil needs since our own oil production peaked in the early 1970s. But we have a certain amount of diversification of our sources, and most of our oil is not from countries that dislike us.

Most of our oil comes from the Western Hemisphere. Our major sources of imported oil in February 2009 were: Canada (1.9 mbd), Mexico (about 1.2 mbd), Saudi Arabia (about 1 mbd), Venezuela (about 960,000 bd), Angola (about 671,000 bd ), Iraq (about 550,000 bd ), Nigeria (about 500,000 bd), Brazil (about 360,000 bd ) and Kuwait (about 250,000 bd). These put together are about 80% of our imports. Which of these countries dislikes us enough to cut off our oil at some time in the future? We have our troubles with Venezuela, but we are also by far their largest markets for their oil. We take over 73% of their exports. I don’t think Mr. Chavez is foolish enough to cut us off. I doubt he would want to see himself get tossed out of office due to the destruction of his economy this embargo of oil to the US may cause. He is a talented rabble rouser, but he has rather strict practical limits on what he can do.

Let us rule out Canada, Mexico, Angola, Nigeria, Brazil, and Kuwait as countries which dislike us. There are parts of these countries’ populations who do not like out foreign policies and some of our international actions, but they are hardly direct threats to our national security due to their exporting oil to us. We have a certain number of enemies in Iraq, but I don’t think that Mr. Pickens was necessarily referring to Iraq as one of those countries that dislikes us.

Could it be that he was referring to Saudi Arabia? My guess is yes. But Saudi Arabia is a fairly small part of our overall supplies of oil. Out of the 23 mbd we consume, mostly wastefully, only about 1 mbd comes from Saudi Arabia. We have a strong military-to-military relation with Saudi Arabia. We have had a very long-standing, and fairly stable diplomatic and economic relationship with Saudi Arabia since the time of FDR. Granted, we have had our disagreements. There are some persons in Saudi Arabia who support violent extremists. The Government of Saudi Arabia, however, sees Al-Qaeda as an enemy. Osama Bin Laden, whom I call Osama Bedouin Din (Osama without religion), was stripped of his citizenship by the Saudis. They consider him a bitter enemy.

Surely we have our differences in some foreign policy issues with the Saudis, but they have also been cooperative on many levels on many issues, mostly quietly, for decades. They have also worked at times to keep the oil prices moderated, and have acted as a moderating influence in the region at times. They could also be seen as a strong ally in our quest to keep the extremist elements in Iran in check. The argument that our oil import money goes directly into the pockets of terrorists, and that we are “funding both sides of the global war on terrorism” with oil imports is an unproven statement that has taken hold in the public mind without sufficient backup. It plays well in politics and in the press, but it does not hold water.

Furthermore, a lot of the oil money we send to the Saudis goes to the pockets of our weapons exporters, is invested in western or Asian companies and financial markets, or is going to building up the economic cities and other megaprojects in Saudi Arabia, including keeping the oil flowing via the efforts of Saudi Aramco.

The Saudis have also been playing real hardball with their homegrown extremists, and have seriously beefed up the protection of their oil facilities, especially after the 2006 attack on the Ab-Qaiq processing facilities. If that attack succeeded then close to 6.5 million barrels a day would have been off the market for possibly a considerable time period. The Saudis asked for help on this issue, and they got it from many quarters. Our relations with the Saudis are far from perfect, and have some points of tension, such as the Arab-Israeli problems, where we have trouble finding any sort of common ground at times. However, there was a peace process shift that has been sponsored by the Saudi King that has gained some traction here and in the Middle East. Admittedly, there are people in Saudi Arabia who dislike the United States with a passion, but those who run the oil system in Saudi Arabia know how important the US is to their overall well-being. They also remember or know about how the Saudi economy was hammered after the OPEC attempts to blockade the west and the west’s reactions by improving energy efficiency, cutting oil demand, and by non-OPEC production increasing drastically.

Each of these countries who are major oil exporters to the US has their own cultures, foreign policies, economic policies and more. They are sovereign states, and have differing perspectives on some issues. Sometimes they work in alliance with us on some issues. On other issues we have our differences. This is clear with our relationship with Mexico on many levels. They have been, however, very good in their handling of the H1N1 flu virus, and are cooperating more than ever on the drugs and gun-running issues. We could all point to problems that we have had with all of these countries, even our good friends to the north, Canada, who send us a pile of natural gas and electricity also. Consider the trade issue we had with them on soft-wood lumber, the Vietnam deserters and others. No international relations our perfect, but we should not exaggerate those problems in order to change our energy policies. There are more compelling reasons to change our policies, or to be more exact, actually develop energy policies.

None of these countries is in any position to use oil as a weapon against the US. OPEC is a cartel only in name, and the speculators in London, New York, and Singapore probably have more sway on short time prices than any OPEC meeting. Could one see the Brazilians one day cutting off one of their biggest sources of foreign exchange in response to some policy by the US? Right now that seems an obscure proposition.

However, there are some things we need to consider for the future. One of the most important is that close to 60% of all known conventional oil reserves are found in the Persian Gulf and this area will most likely be the last to peak. Many of the others on our list of major oil exporters to us will peak a lot sooner than some would hope, and some, such as Mexico, have already peaked given the knowledge that we have now, and the economic structure of PEMEX. As oil runs out in many of the smaller sources of oil, such as in Nigeria, Brazil, Angola, etc. the more important the Persian Gulf will become. Tensions in the region may spark different scenarios.

Another thing to consider if we are to start to cut back on our use of oil too quickly: we may spur some extreme instability in the Persian Gulf and in those other countries that rely on oil revenues and on remittance labor that works in the Gulf and other oil producers. We may spur, for example, further instability in some of the smaller oil states, such Nigeria and Angola, who are extremely reliant on oil revenues. Moving too quickly from hydrocarbons could also do significant damage to the Russian economy, if they do not sufficiently diversify before the inevitable happens.

The inevitable is that oil will peak and that production will find its limits. This is the case even if we consider heavy oils, tar sands, and oil shale. These non-conventional oils also bring with them extreme environmental implications, with significant costs at many levels.

So we are facing down the real national security threats to the US. These are not that we are importing oil from countries that do not like us. These are the dual and potentially very threatening effects of peak oil and global climate change. Global climate change is a direct result of the use of fossil fuels, and oil is a big part of this. Senior national security leaders like Generals Zinni and Sullivan, Admiral Truly and more have seen this on the horizon, and have wondered, really, how close that horizon truly is. Peak oil will become a much greater threat if we do not start to pre-plan for it now.

Another set of energy related national security issues directly related to the oil trade can be found in the inexorable power of geography. About 45% of all oil is transported by ship. 15 mbd goes via the narrow Straits of Hormuz. About 12 mbd goes via the treacherous Straits of Malacca and the Singapore Straits. 3 mbd goes through the straits near the Bab Al Mandab off of Yemen. 3 mbd crosses the Suez Canal. 3 mbd goes via the Bosporus Straits. The list goes on an on.

Many important oil pipelines and other facilities in the world are more vulnerable than many would like to think. The ABOT terminal off of southern Iraq ships about 85% of Iraq’s exports, and it quite vulnerable. Many major pipelines coming out of Russia are vulnerable. The Port of Houston is not exactly a bastion of security either, and we import almost 1/3 of our crude to be refined here into that port. The LOOP off of Louisiana is a target, and a large source of our crude imports.

The list of oil infrastructure vulnerabilities, well, that is the sort of list that can keep me up at night. These are real oil-based national security threat zones. A less centralized and less geographically dense energy system would be a lot less risky. The supply chains for oil for the US, and for the rest of the world, are often in limited geographical bands, and are ripe for the targeting for any non-state group that has a bad idea. Al-Qeada and OBL have made statements to the effect that they have these nodes in their sights. The sooner we move away from oil and such a non-robust supply chain system the more secure our energy and economic systems will be.

I agree with Mr. Pickens that we need to move from oil, especially in transportation, which is the biggest user of oil in the US, and by far the most inefficient user of oil in the US. For every gallon that goes into the typical US auto only about 5-10% is used to move the passengers and cargo. The rest is mostly wasted energy. Light-weighting of the cars, building carbon fiber cars, moving to real hybrids, moving to electric cars with the electricity based on a smart-grid system indeed may be one of the ways to go to battle the energy-environment based national security threats looming. Right now we have a dumb grid. About 85% of the fuel put into producing electricity goes up in the air has heat. Even more is lost in transmission, distribution, and splitting the lines near houses, factories, etc.

There are clear and present dangers heading toward us due to our reliance on oil. These clear and present dangers are not due to whom we are importing from. They are from how much our economy and society relies on an uncertain commodity which also has sometimes very volatile prices, will peak, helps create global climate change, and has potentially very fragile supply chains. All of these fragilities in the oil-based energy systems potentially can have extreme effects on our people.

Should Congress address these issues with legislation? The answer, of course, is yes. But it is imperative that the legislation does not do more damage than good, and that it is based on facts and science, rather than on populism and the race for the next vote or campaign contribution. Legislation directed at the looming threats of peak oil, global climate change, and the potential fragilities of the oil supply chain could be a very important set of next steps to move us toward the new energy future that is a requirement for the national security of this country to be maintained and preserved. Such legislation could be drivers to the new energy future.

Above all, the best of American values need to be reflected not just in our energy policies, but our overall domestic and foreign policies. Trading off our values for the next barrel of oil is unacceptable.

The time to move toward our new energy future is now. We cannot doddle on the side lines and look for excuses to kick the can of change down the road to the next leaders or the next generations. We are facing a massive responsibility to the present and future generations to get our energy systems and other interconnected systems right. If we get it wrong then the national security of this country will be truly in jeopardy and the economy as we know it could become so fragile that the economic crisis we face today will seem like a walk in the park in the rain, rather than the whipsawing high gusts of economic instability we could face from the twin towers of oil-based instability: peak oil, global climate change, and potentially very fragile oil supply chains.

The opinions expressed by Dr. Sullivan are his alone.

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For decades, our dependence on foreign oil (and the unstable countries that produce it) has been growing – and sometimes this trend has been made worse by congressional actions that have penalized American oil and natural gas producers. For example, according to the Congressional Research Service, the 1980 Windfall Profits Tax on American oil and natural gas producers “reduced domestic production from between 3 and 6 percent and increased oil imports between 8 and 16 percent.” The tax also drained $40 billion from these American companies that otherwise could’ve been invested in new energy supplies here at home.

The current Congress should learn a lesson from past mistakes. As it crafts an energy bill, the Congress should reject proposals (such as the Obama Administration’s budget) that would increase taxes on the American oil and natural gas industry. It should be U.S. policy to encourage, not discourage more American energy from all sources. This is the only way we can reverse an ever-growing and dangerous trend of reliance on foreign oil.

energy.nationaljournal.com/