• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Heritage Findings Reaffirmed: U.S. Not Ready for a Massive Oil Crisis

    The United States lacks effective energy policy responses in the event of a major oil crisis. This was the conclusion reached at a recent simulation by Securing America’s Future Energy. Little surprise here: We arrived at the same conclusion in three energy simulation exercises conducted at The Heritage Foundation in 2007, 2008, and 2010. These exercises, in which top current and former government officials, diplomats, and experts participated, demonstrated that there are significant security and diplomatic vulnerabilities to terrorist attacks. The dangers the Heritage energy game identified included domestic and global oil producing, processing, and transportation systems.

    Terrorists and other violent non-state actors, as well as protracted turmoil in principal OPEC and non-OPEC oil-producing countries, have the potential to cause a sharp drop in oil production and acute price spikes.

    The latest Heritage energy simulation exercise demonstrated that selective embargoes, low price guarantees, odd-even day sales, and long-term projects have no significant effect on post-crisis oil prices in the short term. The only way for the U.S. government to reduce actual petroleum costs is to increase supply or reduce demand and to pursue policies that would moderate the negative economic impact, e.g. withdraw additional petroleum from the Strategic Petroleum Reserve. As natural gas pricing mechanisms are often tied to oil, additional measures to keep energy prices in check would include reopening of nuclear facilities in Eastern Europe or increase in piped gas volumes and Liquefied Natural Gas (LNG) sales from Russia.

    The Heritage energy game concluded that any economic crisis that includes an oil price spike will benefit Iran, America’s primary adversary in the Middle East. Tehran’s regime is exploiting its energy resources to fuel a military buildup, developing an extensive nuclear weapons program, and is exporting a Shia Islamic revolution throughout the Middle East, especially to Iraq, Lebanon, and Bahrain.

    So far, the Obama Administration’s efforts to stop Iran’s ballistic missile and nuclear weapons programs are failing. According to the most recent reports, Iran has been significantly advancing its ballistic missile capabilities and is preparing to triple its uranium enrichment output. The U.S. government must accompany sanctions with support of Iran’s civic movement as well as a credible threat of the use of force to disrupt Iran’s nuclear weapons program, should Iran come closer to achieving this capability.

    Heritage’s simulation clearly showed that reliance on markets and international security cooperation in peacetime and in crisis can go a long way to restore the confidence of governments, corporations, and consumers. The United States and its allies will need to exercise decisive and effective leadership to mitigate impacts of future energy crises.

    Posted in Energy [slideshow_deploy]

    7 Responses to Heritage Findings Reaffirmed: U.S. Not Ready for a Massive Oil Crisis

    1. doug korthof says:

      Actually, if all oil imports (except Canada and Mexico) ended today, America could adapt and would be far better off. For that matter, we should close all coal mines and stop burning coal, a dirty and anachronistic charade.

    2. dana says:

      So Doug. What do you you plan on doing to run all those electrical appliances? Hot Air?

    3. Tom Sawyer says:

      The best way to counter Iran or any theocracy is to put front and center the nonsense that is called faith. Faith is a disease, people die for it people kill for it they ignore the lack of evidence to support it. Yes it would also call into question the nonsense that most people in the west accept and that is Christianity and that might not be a bad thing either. The sooner you can get the common man on the street to open his eyes to this nonsense the better.

      • Campbell says:

        Faith is just a thing to get people killed. It's something to believe in. It gives people hope. Hope is something people need. I'd stick up and die for it.

    4. guest says:

      If faith is the substance of things hoped for, and faith is the evidence of things not seen, then who or what am I to believe / in – myself,god or miracles ?

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×