Imported Oil and U.S. Security

by Crane, Keith; Goldthau, Andreas; Toman, Michael; Light, Thomas; Johnson, Stuart E.

• ISBN13: 9780833047007
• ISBN10: 0833047000
• Format: Paperback
• Copyright: 2009-06-16
• Publisher: RAND Corporation

Summary

In 2007, the United States imported 58 percent of the oil it consumed. This book critically evaluates commonly suggested links between these imports and U.S. national security and assesses the economic, political, and military costs and benefits of potential policies to alleviate imported oil–related challenges to U.S. national security.

Table of Contents

Preface	p. iii
Figures	p. ix
Tables	p. xi
Summary	p. xiii
Acknowledgments	p. xix
Abbreviations	p. xxi
Introduction	p. 1
Purpose	p. 1
The Monograph	p. 2
Potential Economic Costs to the United States Posed by Imported Oil	p. 2
Oil as a Foreign Policy Tool	p. 2
Oil-Export Revenues, "Rogue States," and Terrorism Financing	p. 3
Incremental Costs of Fielding U.S. Forces to Protect Oil Supplies and Supply Routes from the Persian Gulf	p. 3
Benefits to National Security and Costs of Policies from Diversifying Sources of Supply and for Reducing U.S. Imports of Oil	p. 3
Oil Markets and U.S. National Security	p. 5
Potential Economic Threats to U.S. National Security from Importing Oil	p. 5
The Role of Oil in the U.S. Economy	p. 5
Demand	p. 5
Imports	p. 6
Global and U.S. Consumption	p. 8
Global Production and Reserves	p. 9
Prices	p. 12
International Oil Markets and World Marker Oil Prices	p. 12
Oil Price Volatility	p. 14
Supply and Demand Rigidities	p. 15
Oil-Market Disruptions and U.S. National Security	p. 17
Risks	p. 17
Costs to the U.S. Economy of Supply Disruptions	p. 19
Mitigating the Costs of Supply Disruptions	p. 21
The Resilience of the Supply Chain	p. 22
U.S. Terms of Trade, Oil Prices, and National Security	p. 23
Oil as a Foreign Policy Instrument	p. 25
Oil Embargoes and Cutoffs	p. 25
Oil Export Embargoes Prior to and During World War II	p. 25
The 1956 Saudi Arabian Oil Embargo Against France and the United Kingdom	p. 26
The 1967 Oil Embargo Against the United States, the United Kingdom, and Germany	p. 26
The 1973--1974 Oil Embargo Against the United States, the Netherlands, Portugal, and South Africa	p. 27
Russian Cutoffs of Oil Supplies	p. 29
Russian Natural-Gas Cutoffs	p. 30
Oil Export Subsidies	p. 35
Soviet Subsidies to Eastern Europe	p. 35
Russian Subsidies to Other Members of the CIS	p. 35
Assistance to Egypt from the Persian Gulf States	p. 36
Iraqi Subsidies to Syria and Jordan	p. 36
Below-Market Sales of Oil by Venezuela and Saudi Arabia	p. 37
Securing Oil Supplies	p. 37
China	p. 38
Japan's Energy Diplomacy	p. 39
Conclusions	p. 41
Oil Revenues, Rogue States, and Terrorist Groups	p. 43
Oil Revenues and Rogue States	p. 43
Iran	p. 44
Venezuela	p. 48
Oil and Terrorism Finance	p. 54
Terrorist Groups	p. 55
Islamic Fundamentalism, Terrorism, and Oil Money	p. 56
Political Groups That Use Terrorism as a Weapon	p. 56
Conclusions	p. 57
Incremental Costs for U.S. Forces to Secure the Supply and Transit of Oil from the Persian Gulf	p. 59
Introduction	p. 59
Key Issues	p. 60
A Secure Supply of Oil as a Key National Security Interest	p. 60
Current Policy	p. 62
Recent Estimates of the Costs of Protecting the Supply and Transit of Oil	p. 63
Costing Forces Specific to Ensuring Security of Supply for Oil	p. 65
Incremental Forces to Secure Oil from the Persian Gulf	p. 66
Army	p. 69
Marine Corps	p. 70
Navy	p. 70
Air Forces	p. 70
A Top-Down Look at the Problem	p. 71
Costs of Combat Operations	p. 72
Conclusions	p. 74
Policy Options to Address U.S. National Security Concerns Linked to Imported Oil	p. 77
Policies to Mitigate Disruptions in the Supply of Oil	p. 78
Option: Support Well-Functioning Oil Markets	p. 78
Option: Drawing on the Strategic Petroleum Reserve	p. 78
Option: Improving the Resiliency of the Domestic Supply Chain	p. 80
Policies to Expand Domestic Sources of Supply	p. 81
Option: Open Access to Environmentally Sensitive and Other Restricted Areas	p. 82
Option: Increase Supplies of Unconventional Fossil Fuels	p. 82
Option: Increase Supplies of Renewable Fuels (Biofuels)	p. 84
Policies to Reduce Domestic Consumption of Oil	p. 85
Option: Higher Fuel Taxes	p. 85
Option: Policies to Limit Oil Imports	p. 86
Option: Raising Corporate Average Fuel Economy Standards	p. 86
Policies to Reduce U.S. Expenditures to Defend Oil Supplies from the Persian Gulf	p. 87
Policy Effects and Trade-Offs	p. 88
Designing Effective Policies for Addressing U.S. Energy-Security Concerns	p. 89
Bibliography	p. 93
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