by Col. Dan Nolan (Ret.)
My participation in “Carbon Nation” came about quite fortuitously. After I retired from the Army, I was working as a government analyst, looking at the tactical implications of energy security. I was leaving that position to try to encourage commercial interest to get involved with the Department of Defense to help solve what had been a strategic dilemma since the ‘70s: oil dependance. A friend asked me to speak to a documentary film maker about my concerns. I met Pete Byck outside the U.S. Capital building on a bright spring day and tried to tell the story of DOD’s efforts to solve a national security issue.
Having received a post graduate degree in National Security and Strategic Planning from the U.S. Naval War College, I put those tools to work to understand the larger implications of our addiction to fossil fuels. What I concluded was that climate change was a concern, the economic drain was unfortunate and that the national security implications were terrifying.
Energy Security for the United States creates a critical vulnerability in all of the elements of national power. In order to protect the free flow oil for ourselves and our markets, the U.S. commits billions of dollars in military, diplomatic, economic and information management efforts. Interruptions of the free flow means increased cost for American consumers and increased trade deficit with our trading partners. The cartel nature of Middle Eastern oil production means we must engage in other than free market activities to maintain the life blood of the economy.
According to the U.S. Energy Information Administration, the U.S. imports 51% of its petroleum requirements. In 2009 this equated to 11.7 million bbls a day. 51% of our imports come from the Western Hemisphere with the Persian Gulf and Africa providing 17% and 22%, respectively. Although prices fluctuate, given U.S. consumption of 378 million gallons of gas a day, a one dollar rise in gas prices diverts $2.6B a week from other spending. A $15 a bbl rise in oil prices causes a 1% decrease in US GDP.
The international nature of markets links us to regimes that may not have our best interests at heart. After all, nations have interests, not friends.
Budgets of OPEC nations are based on a conservative price for oil. The Saudi budget is based upon $58/bbl. The current price is $90/bbl. Iran is reducing internal price subsidies to increase their export ratio to above the current 52% of 1.5B bbls production annually. Venezuela’s state run oil company had earnings of $4.49B in 2009.
It is not just the U.S. that is vulnerable directly. Japan relies on oil imports to meet 45% of its energy needs in 2009. China’s oil consumption growth accounted for about a third of the world’s oil consumption growth in 2009. Germany, India, South Korea and France import 8.4 million bbls daily. Decreases in availability or increases in the cost of oil are reflect in decreases in U.S. trade deficit with these top six trade partners.
There are three critical vulnerabilities associated with oil: production, transportation and support for terrorists.
Production: Saudi Aramco operates the world’s largest oil processing facility and crude stabilization plant at Abqaiq, in eastern Saudi Arabia, with a crude processing capacity of more than 7 million bbl/d.. Nearly two-thirds of Saudi crude is processed at Abqaiq before export or delivery to refineries. The facility was the target of a terrorist attack in 2006. Terrorist one stop shopping.
Transportation: Middle Eastern oil must pass through the Straits of Hormuz to reach the US and, additionally, the Straits of Malacca to reach Asian markets. Attacks on individual ships can cause massive ecological damage and the closure of a major choke point, massive economic damage.
Funding for Terrorism: Iran is the only oil producing country on the U.S. list of state sponsored terrorism. The funding for Wahhabis’ madrassas can be traced back to charitable contributions from oil rich states. When we fill our cars, we are filling the magazines of those who would seek to destroy us.
“Carbon Nation” tells a story that must be heard. There are people throughout the world who are taking action, but leadership at the national and international level is lacking. We have “islands of excellence” in the quest for solutions, but we lack vision. To paraphrase a good book I read, without vision, the people perish. At no time has this had greater meaning. It is my sincere hope that “Carbon Nation” supplies the impetus to change, to find our vision and to plot a new course into the future.