Rand, one of the US’s most influential think tanks, has figured out what most school children, but few Congressmen, understand: oil imports don’t threaten US security, oil consumption does.
The biggest risk to the US (and all other consumers for that matter) would be an abrupt, extended fall in the global oil supply, Rand concluded.
Nevertheless, striving for energy “independence” (a catchword that has survived the transition from Presidents George W. Bush to Barack Obama and remains alive and well on Capitol Hill) though politically popular, appears a rather fruitless exercise. Instead, the US should support a well-functioning oil market, Rand says (emphasis ours):
A large, extended reduction in the global supply of oil would trigger a sharp
rise in the price of oil and lead to a sharp fall in economic output in the United States,
no matter how much or how little oil the United States imports.
Rand, sounding suspiciously European, says an excise tax on all oil, not just imports, may not make for easy re-election, but would lessen any blow from a sudden drop in supply. Meanwhile, the US government should review its barriers to exploring and developing new fields in the US as well as support competitive alternatives (traditionally more popular American sentiments, to be sure).
It’s simple really. “Because oil is traded through a global market, the US economy will continue to be vulnerable to global shifts in the supply and demand for oil for the foreseeable future, regardless of how much oil or what percentage of its oil the US imports,” Rand said in the report’s summary.
The think tank also has a message for oil producers: embargoes don’t work to advance your foreign policy goals.
And a message for US allies: Help pay the bill – 12 to 15 per cent of the US’s sizable 2008 defense budget – for patrolling the Persian Gulf.
Here is Rand’s snapshot of the potential links between imported oil and US national security: