In the early 1970s, U.S. economic and transportation security was damaged from oil embargos. In 1990, America went to war to secure foreign oil fields. In 2003, America invaded those oil fields again…well, let’s not get into that.
For the past decade, the U.S. has been on a domestic oil & natural gas drilling campaign for “national security” and to become an “energy superpower.” 2020 has seen US crude oil futures go from a high of $65/barrel to just above $20-almost a 70% drop. This price action has occurred in part from the demand loss from COVID-19 economics. But this also can be attributed to the fact that Saudi Arabia and Russia have decided to go to war with their oil producing enemies, especially U.S. drillers that use hydraulic fracturing (fracking) in their operations. Oil and natural gas extraction are connected. Natural gas is essentially a byproduct in fracking for oil and was deemed by many to be a bridge fuel on the way to clean energy. For the past several years fracking companies in America have become over leveraged in debt, largely financed by the largest U.S. banks. These companies are now in big trouble.
The Saudis and the Kremlin know how weak these American fracking companies are from lower oil prices. Now they are flooding the global crude market to drop the price to such an extent that many American companies might go bankrupt. And some will. As these companies go under, the result will be a reduction America’s production capacity. Due to the geology of the Arabian Peninsula, Aramco (the national petroleum company of the kingdom) can extract oil cheaper than everyone else. Through out March they have been hiring extra oil tankers to hold more crude for which there isn’t demand. They’ve created new floating storage. While the price of most every nonessential service has been coming down over the past month the booking rates for oil tankers have soared. Saudi Arabia and Russia are willing to reduce their own revenue to hurt American producers introducing the potential of driving them out of business; impacting U.S. jobs, tax revenue, energy communities and national security.
First, high oil prices damaged national security. Now, low oil prices threaten national security. It’s time to have American security not dependent on a global commodity that foreign powers can manipulate.
With the global disruption, downtime and pause resulting from COVID 19, the world is getting the opportunity to reflect on and rethink possibilities for change and redesign. Included in the climate, economic and health reasons for the transition from fossil fuels to renewable energy is our national security.
Unlike oil and natural gas, America’s solar and wind power resource is known and almost predictable source of energy. These resources can’t be cornered by a foreign government or used as a weapon.
Renewable energy is national security.
The fossil fuel industry is already in decline from divestment and technology driven market forces. On March 18th, the federal government held an auction for oil and gas leases available on 78 million acres in the Gulf of Mexico. Less than 400k acres were bought.
The U.S. military wants freedom from the constraints of gasoline. In speaking about the army’s desire to electrify their vehicles, Lt. Gen. Eric Wesley, director of the Futures and Concepts Center , said “Let’s be clear. We’re behind. We’re late to meet on this thing.” “ If you look at all of the analysis, all of the various nations that we work with, they’re all going to electric power with their automotive fleet, and right now, although we do science and technology and we’ve got some research and development going on and we can build prototypes, in terms of a transition plan, we are not there.”
Now is the time for U.S. policy makers to join corporate leaders and NGOs to strengthen our national security by transitioning from a commodity-based energy system to one of technology that we control. By creating an energy system based in domestic renewables we remove the ability for another government to weaponize the price of oil against us. Now is the time for renewable security.
Upcoming event: https://e2.org/events/oil-clean-energy-and-national-security/