OIl-Related National Security Risks

Published March 2, 2006

Suicide bombers carried out a bold attack on the world's largest oil processing facility on Feb. 24, 2006.

Suicide bombers carried out a bold attack on the world's largest oil processing facility on Feb. 24, 2006.Crude oil futures spiked more than $2 US a barrel immediately after the attack.

For most of the 20th Century, the United States was the world’s largest producer of petroleum. U.S. oil fields provided not only all our domestic needs; they generated a surplus for export. U.S. oil fueled the Allied armies during WWII. But U.S. domestic production peaked in the early 1970s and has declined ever since, while our consumption has continued to climb steeply. The shortfall has been made up by imported oil.

In 2001, imported oil accounted for 55% of US consumption; this figure is projected to rise to 70% by 2020. “What’s the problem?” you might ask. After all, we exist in a global economy in which many countries import goods and products that aren’t produced locally.

Location, Location, Location

Oil is not found evenly distributed across the globe; it is concentrated in a few giant reservoirs. While the U.S. and a few other industrialized countries possess significant oil reserves, the vast bulk of it—over 80%—is beneath developing countries. In fact, nearly two-thirds of the world’s known oil reserves are under just six Persian Gulf nations: Saudi Arabia, Iraq, the United Arab Emirates, Kuwait, Iran and Qatar.

Let's look at the energy security [1] spiral resulting from our dependence on Persian Gulf oil:

1. Ensuring free access to oil forces the U.S. to maintain a military presence in the Persian Gulf. This presence costs the American taxpayer more than $50 billion per year in defense spending—and obviously a lot more during times of war.
2. The presence of the U.S. military and oil firms in these nations arouses hostility from people who reject American values or resent American wealth and power.
3. The production of oil in otherwise under-developed societies funnels vast wealth to a few, leaving the rest behind in poverty, undermining the stability of those nations and arousing more hatred in their people.
4. Oil money from the West—that means the cash you fork over at the pumps—fills the coffers of terrorist organizations to pursue a program of anti-American violence. 911 is just one example. (Oil money enables Saudi Arabia to invest approximately 40% of its income on weapons procurement.)
5. Pipelines, tankers and oil rigs become critical and very vulnerable targets for terrorists trying to bring the international economy to a standstill, by diminishing the supply of oil.
6. Both the International Energy Agency and the Energy Information Agency of the U.S. Department of Energy currently project a steady increase in world demand for oil through at least 2020. This means further enrichment of the oil-producing countries, continued funding to terrorist groups, sustained lethal threats to the U.S. and its allies, and fluctuating oil supply lines.

As long as we remain (and grow even more) dependent, this cycle of energy insecurity—oil and blood and oil and blood—will continue.