A group of former generals and senior defense officials is warning against the seductive myth of American energy independence. Fracking and horizontal well drilling are giving the United States a lot more oil and gas, but they aren’t making us independent from foreign suppliers. In fact, because oil is a globally traded commodity, even if we produced as much oil as we consumed (an unlikely proposition), supply disruptions abroad would still affect the price of oil here. Barring an isolationist energy policy—a logistically fraught idea that would really upset our allies—America won’t be energy independent as long as it consumes oil. The Commission on Energy and Geopolitics expanded on these concerns in its inaugural report on U.S. energy security. The FT reports:
The commission, led by Admiral Dennis Blair, a former director of National Intelligence, and General Mike Hagee, a former commandant of the US Marine Corps, also said the world had entered a “new normal” of high and volatile world oil prices. It urged the Obama administration to promote alternatives to oil use, particularly electric and natural gas-powered cars, and to strengthen support for global energy flows as a foreign policy objective. […][T]he Safe commission, which also included Admiral Mike Mullen, the former chairman of the US Joint Chiefs of Staff, and four former ambassadors, argues that although physical crude flows into the US may be declining, that does not stop the economy being vulnerable to oil price shocks.
In addition to arguing for a diversified energy mix—something fracking is also helping with, by boosting production of natural gas—the commission voiced support for electric and natural gas-powered vehicles as a way to decrease our country’s reliance on oil. Compressed natural gas vehicles require high up-front costs (the engines are much more expensive than their gasoline-powered counterparts) and currently lack the refueling infrastructure to take off. But they are an increasingly attractive option for fleets with the ability to eat the capital cost for long-term savings (natural gas is dirt cheap in the United States thanks to its oversupply) and which often require vehicles to refuel at central stations.The commission also called for “[continued] U.S. technical engagement—especially through hydraulic fracturing technology—to help promote the development of oil and gas resources around the globe.” Currently, America is the only country to successfully produce commercial quantities of shale oil or gas, and a variety of barriers are preventing countries like China from exploiting their own substantial reserves of shale hydrocarbons. America can’t solve China’s water access problem, but the commission argues that it can lend its considerable technical expertise to the more complex geological problems Beijing and others are facing.This report is a smart, realistic check on shale enthusiasm, but it’s worth noting that the price shocks the commission is warning against are already being at least partially evened out by increased American oil production. U.S. energy security is up, even if independence is off the table.