National Security at the Pump
As Americans struggle with rising gas prices, conservative candidates have been on the attack against the Obama administration. The conservative arguments, however, are counter to what experts on the subject say about both the causes of the rising oil price and current production. What is true: U.S. domestic production is rising steadily – and the new factor contributing to price rises is speculation over a war with Iran, coming largely from conservatives themselves. What is fundamental: these attacks and simplistic solution – “drill baby, drill!” – ignore the larger challenge of a comprehensive approach to energy that invests in America’s future and disengages from the tyranny of oil markets and Middle East politics.
Tensions and fears regarding conflict with Iran boost energy costs; an actual strike would be even worse. As economist Ross DeVol writes, “Rising oil and gasoline prices are once again threatening the U.S. economic recovery. It is no surprise that the root cause is geopolitical turmoil in the Middle East – this time related to Iran’s nuclear ambitions and potential disruptions in oil supply. At this point, it is the threat of Iranian oil supplies being removed from the market that is pushing prices higher.” The New York Times explains, “With no clear end to tensions with Iran and Syria and rising demand from countries like China, gas prices are already at record highs for the winter months … As summer approaches, demand for gasoline rises, typically pushing prices up around 20 cents a gallon. And gas prices could rise another 50 cents a gallon or more, analysts say, if the diplomatic and economic standoff over Iran’s nuclear ambitions escalates into military conflict or there is some other major supply disruption.”
Former White House Counterterrorism Czar Richard Clarke explains how the consequences of a strike on Iran could hurt oil prices even further: “You could see very quickly Iranian commandos and their small boats attacking tankers, attacking oil platforms… You could see mines being laid in the Gulf.” The result, Clarke says, “would be a huge crisis in energy.” Nouriel Roubini co-founder and chairman of Roubini Global Economics further explains the effects on the economy, “The worse-case scenario is a protracted conflict. If there’s an effect on the supply of oil and gas from the Gulf, and production and exports from Iran go for a while to zero, oil could go to $170, $180, $200 a barrel… The reality is that if you think about the last three major global recessions, there were all caused by a geopolitical shock in the Middle East that led to spike in oil prices… So if the conflict is severe and protracted and the increase in oil prices is significant, I would say we’re talking about not just a U.S. recession but a global recession.” [Ross DeVol, 3/13/12. NY Times, 2/29/12. Richard Clarke via ABC News, 3/5/12. Nouriel Roubini via Foreign Policy, 3/9/12]
As oil production, exports rise, conservative attacks on oil and gas production fall flat. Michael Levi, senior fellow at the Council on Foreign Relations, writes, “[T]here is a strong case to be made that he [Obama], not his opponents, offers the best hope for American oil and gas.” Levi explains that, “After falling every year from 1991 through 2008, U.S. oil production has climbed for three years in a row. U.S. oil imports started to drop in 2005 under President George W. Bush, but Obama’s policies haven’t stopped the trend. Last March, Obama announced a target of cutting oil imports by a third by 2020; less than a year later, the United States is already more than halfway there. Natural gas production is also surging. The United States hit rock bottom in 2006, at which point the shale gas revolution began to re-energize the sector. That boom has continued since Obama took office. It’s tough, in other words, to square claims that Obama is destroying American oil and gas with the record production numbers that the industry is posting year after year.” In fact, Bloomberg reports that the U.S. exported more fuels than it imported for the first time in 62 years last year, and fuel exports are forecast to more than double by 2015. [Michael Levi, 3/1/12. Bloomberg News, 3/12/12]
“Drill baby, drill” is not a policy; what is needed is a comprehensive energy policy that invests in America’s future. As the New York Times editorial board explains, “Therein lies the biggest weakness in the Republican litany. A country that consumes more than 20 percent of the world’s oil supply but owns 2 percent of its reserves cannot drill its way out of high prices or dependence on exports from unstable countries. The only plausible strategy is to keep production up while cutting consumption and embarking on a serious program of alternative fuels. American innovation is a big part of the answer.”
“The good news is that we have the technology and the know-how to permanently reduce our dependence on foreign oil. But we must commit to serious action or we will continue to pay the costs of our oil dependence through our wallets, our military commitments, our economy, and our health,” write John Podesta of the Center for American Progress, Carl Pope of the Sierra Club and Gene Karpinski of President of the League of Conservation Voters. Last year they outlined a plan to cut oil costs that has four key elements: “cutting oil imports; building 21st century vehicles and creating more transportation networks; ending tax loopholes for Big Oil; and cracking down on oil speculators.” [NY Times, 3/4/12. John Podesta, Carl Pope and Gene Karpinski, 3/11]
What We’re Reading
U.S. officials are debating whether to reduce American forces in Afghanistan by at least an additional 20,000 troops by 2013.
Iranian President Mahmoud Ahmadinejad was summoned to the Iranian parliament for questioning.
Burmese state media will air a campaign speech by Aung San Suu Kyi.
Egypt has experienced a dramatic increase in kidnappings and armed carjackings since Mubarak’s ouster last year.
The Somali militant group al Shabab took responsibility for a suicide bombing inside the presidential palace in Mogadishu.
A series of earthquakes hit Tokyo and northern Japan.
Chinese legislators endorsed a plan to give police the authority to detain suspects at undisclosed locations.
Hundreds of millions of voters in India are calling for more economic opportunities.
Greek leaders prepare for national elections slated for late April or early May.
Mexican lawmakers are set to amend the constitution to make it a federal crime to attack or intimidate journalists.
Commentary of the Day
Shirin Ebadi says the “true Arab Spring” will only happen when women are guaranteed a place in civic life.
Nina Hachigian and Jacob Stokes explain why Romney’s China trade talk is bad politics and worse policy.
Jonathan Schanzer thinks Iran is to blame for the recent conflict between Israel and Gaza.
Stephen Young argues that a large nuclear force is no longer an asset to U.S. national security – and notes the slow pace of change in this administration compared to the nuclear cuts under Ronald Reagan.
Presidents Barack Obama and British Prime Minister David Cameron emphasize the strength of the U.S.-UK alliance.