Imported Oil and U.S. Security

The purpose of this study is to critically evaluate commonly suggested links between imported oil and U.S. national security and to assess the costs and benefits of potential policies for reducing U.S. consumption and imports of oil and to alleviate national security challenges linked to imported oil.

Contents
Preface
Figures
Tables
Summary
Acknowledgments
Abbreviations
Chapter One
Introduction
Purpose
The Monograph
Potential Economic Costs to the United States Posed by Imported Oil
Oil as a Foreign Policy Tool
Oil-Export Revenues, “Rogue States,” and Terrorism Financing
Incremental Costs of Fielding U.S. Forces to Protect Oil Supplies and Supply Routes from the Persian Gulf
Benefits to National Security and Costs of Policies from Diversifying Sources of Supply and for Reducing U.S. Imports of Oil
Chapter Two
Oil Markets and U.S. National Security
Potential Economic Threats to U.S. National Security from Importing Oil
The Role of Oil in the U.S. Economy
Demand
Imports
Global and U.S. Consumption
Global Production and Reserves
Prices
International Oil Markets and World Market Oil Prices
Oil Price Volatility
Supply and Demand Rigidities
Oil-Market Disruptions and U.S. National Security
Risks
Costs to the U.S. Economy of Supply Disruptions
Mitigating the Costs of Supply Disruptions
The Resilience of the Supply Chain
U.S. Terms of Trade, Oil Prices, and National Security
Chapter Three
Oil as a Foreign Policy Instrument
Oil Embargoes and Cutoffs
Oil Export Embargoes Prior to and During World War II
The 1956 Saudi Arabian Oil Embargo Against France and the United Kingdom
The 1967 Oil Embargo Against the United States, the United Kingdom, and Germany
The 1973–1974 Oil Embargo Against the United States, the Netherlands, Portugal, and South Africa
Russian Cutoffs of Oil Supplies
Russian Natural-Gas Cutoffs
Oil Export Subsidies
Soviet Subsidies to Eastern Europe
Russian Subsidies to Other Members of the CIS
Assistance to Egypt from the Persian Gulf States
Iraqi Subsidies to Syria and Jordan
Below-Market Sales of Oil by Venezuela and Saudi Arabia
Securing Oil Supplies
China
Japan’s Energy Diplomacy
Conclusions
Chapt er Four
Oil Revenues, Rogue States, and Terrorist Groups
Oil Revenues and Rogue States
Iran
Venezuela
Oil and Terrorism Finance
Terrorist Groups
Islamic Fundamentalism, Terrorism, and Oil Money
Political Groups That Use Terrorism as a Weapon
Conclusions
Chapter Five
Incremental Costs for U.S. Forces to Secure the Supply and Transit of Oil from the Persian Gulf
Introduction
Key Issues
A Secure Supply of Oil as a Key National Security Interest
Current Policy
Recent Estimates of the Costs of Protecting the Supply and Transit of Oil
Costing Forces Specific to Ensuring Security of Supply for Oil
Incremental Forces to Secure Oil from the Persian Gulf
Army
Marine Corps
Navy
Air Forces
A Top-Down Look at the Problem
Costs of Combat Operations
Conclusions
Chapter Six
Policy Options to Address U.S. National Security Concerns Linked to Imported Oil
Policies to Mitigate Disruptions in the Supply of Oil
Option: Support Well-Functioning Oil Markets
Option: Drawing on the Strategic Petroleum Reserve
Option: Improving the Resiliency of the Domestic Supply Chain
Policies to Expand Domestic Sources of Supply
Option: Open Access to Environmentally Sensitive and Other Restricted Areas
Option: Increase Supplies of Unconventional Fossil Fuels
Option: Increase Supplies of Renewable Fuels (Biofuels)
Policies to Reduce Domestic Consumption of Oil
Option: Higher Fuel Taxes
Option: Policies to Limit Oil Imports
Option: Raising Corporate Average Fuel Economy Standards
Policies to Reduce U.S. Expenditures to Defend Oil Supplies from the Persian Gulf
Policy Effects and Trade-Offs
Designing Effective Policies for Addressing U.S. Energy-Security Concerns
Bibliography