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Growing Middle East Threats to U.S. Energy Security
%2001Oct.jpg "Growing Middle East Threats to U.S. Energy Security")
President Obama has finally recognized the growing threat of ISIS in Syria & Iraq and to U.S. national security. To address this growing threat the Obama Administration has initiated a new Air Campaign to “degrade and destroy ISIS”. And, to possibly avoid the need for future U.S. Armed Force’s ‘boots on the ground’ President Obama is also trying to develop a new Coalition in order to get other Countries to help contain and ultimately destroy ISIS and other developing Middle East terrorist groups. Even though U.S. Energy Security has supposedly been a part of the Obama Administration’s ‘All of the Above’ energy policy for years, the recognition of the potentially growing risks to U.S. petroleum oil imports and Energy Security has been omitted from past and current Administration policies and actions.
The Obama Administration apparently has not recognized or acknowledged the potential threats to U.S. Energy Security from growing Middle East oil supply disruption risks. Despite recent increases in domestic crude oil production and somewhat reduced consumption the U.S. still relies on over 2.0 million barrels per day (MBD) of Persian Gulf crude and petroleum oil imports or almost 12% of total current U.S. petroleum oil consumption.
U.S. Crude and Petroleum Oil Supply, Demand and Imports
Data Source – EIA Petroleum Overview and Trade: Tables 3.1 and 3.3a. Note: 2014(E) ‘estimate’ based on MER/STEO data.
Due to developing Middle East threats Persian Gulf imports have the greatest risk of future disruption compared to all other current sources of U.S. petroleum oil imports. Loss of up to 12% U.S. oil imports is almost twice the volume lost during the 1973 Arab OPEC oil embargo.
OPEC Persian Gulf exports must be shipped through the Strait of Hormuz, a narrow waterway that could be readily shutdown if oil shipments were attacked. Just a couple years ago Iran threatened to block all oil shipments through the Strait of Hormuz if Israel or any country were to attack their nuclear development facilities. Due to the less than productive Obama Administration’s negotiations to curtail Iran’s nuclear weapons development ambitions and the probability of future Israel attacks to protect their country, this risk of shutting down the Strait of Hormuz and Persian Gulf oil shipments is quite real. Remember when Israel took out Iraq’s nuclear facility in 1981 in retaliation to a similar national threat. Iran definitely has the military capabilities to readily take out numerous oil tankers that must pass through the Strait of Hormuz that borders their country. Total shutdown of the Strait will block all 17 MBD OPEC Persian Gulf exports or 20% of total current World oil supplies.
If not contained, the growing ISIS and other terrorist groups such as Al Qaeda could expand from Syria and Iraq possibly into other Middle East Countries including Kuwait, Saudi Arabia, Qatar and United Arab Emirates. ISIS, Al Qaeda and other terrorist groups could also partner with Iran behind the scenes, and coordinate attacks against other OPEC Persian Gulf oil facilities and shipping infrastructures in retaliation of U.S. or Coalition attacks in Syria or Iraq, or possible further deterioration of the Iranian nuclear negotiations.
The shutdown of the Strait of Hormuz will not only disrupt all U.S. Persian Gulf imports, but will also impact the availability and cost of nearly all other oil imports from outside North America. Loss of 20% of total World crude oil supplies from a future Strait of Hormuz shutdown will immediately create an International energy crisis and extremely frantic competition for remaining available oil supplies. Strong competition for the balance of world oil supplies will at minimum substantially increase crude oil market prices very rapidly. Since the U.S. currently imports over 3.0 MBD of oil from non-Persian Gulf countries outside North America, the limited availability and substantially higher cost of over 15% of total current U.S. crude and petroleum oil supplies from Countries other than Canada and Mexico, will further decrease Energy Security and negatively impact the overall economy beyond just loss of 2.0 MBD of Persian Gulf imports.
To help mitigate the impacts of possible future U.S. oil supplies disruptions the Federal Government built the Strategic Petroleum Reserve (SPR) following the 1973 Arab OPEC oil embargo. In the event of lost imported oil, the SPR can replace up to 4.4 MBD directly to the Gulf Coast and Mid Continent via existing pipeline, rail and inland marine infrastructures. SPR transfers to the East and West Coast will be more constrained due to limited ‘Jones Act’ shipping. The 1920 Jones Act requires U.S. port-to-port shipments normally be made in U.S. built, crewed and operated tanker ships. The West Coast SPR shipments are further constrained by the required Panama Canal shipment routing. If or when the Strait of Hormuz is shutdown, the oil shortages on the West Coast, and East Coast to a lesser degree, could approach the historic energy crises levels experienced following the 1973 Arab OPEC embargo and the 1979 Iranian Revolution.
The large threats to Persian Gulf oil shipments and U.S. Energy Security need to be immediately addressed to avoid a future energy crisis which could cause another ‘Great Recession’. The Obama Administration needs to acknowledge these risks and implement new policy changes needed to mitigate the growing threats to U.S. Energy Security. Since the progress in reducing U.S. petroleum consumption has slowed significantly as the economy recovers more fully from the Great Recession, this possible solution to significantly reducing future oil imports will likely take 10-20 years to significantly reduce or eliminate Persian Gulf imports. The most timely and effective strategy to reducing or possibly eliminating the U.S. need for Persian Gulf oil imports is further increasing North America crude oil supplies. This will involve major changes to the Obama Administration’s existing ‘All the Above’ energy policy and expediting the development all forms of the most secure sources of required petroleum supplies.
Clearly the single largest impact on U.S. reduced oil imports recently has been due to increased domestic crude oil production from newly developing ‘hydraulic fracturing’ technology. As a result of this new technology Oil Companies have been able to produce large and growing amounts of unconventional ‘tight oil’ from the huge shale reserves around the Continental U.S. Even though the Obama Administration tries to claim credit for this increase in U.S. domestic production, the reality is that with very few exceptions, the vast majority of increased ‘tight oil’ production has come from State and Private land leases; and not leased Federal properties. To further increase domestic production of unconventional and conventional crude oil the Obama Administration needs to immediately increase the access and number of leases issued for Federal on- and off-shore oil reserves. This policy change will accelerate future domestic crude oil production and more rapidly reduce currently needed and high risk Persian Gulf oil imports.
The next major policy change the Obama Administration needs to make is immediately approving the Keystone XL pipeline. This action will give the U.S. very quick access to the most secure source of oil imports from the U.S.’s largest Trade Partner and important Ally; Canada. It’s time to stop the seemingly endless delays in approving the cross-border section of the Keystone XL pipeline project. After six years no significant or un-resolvable environmental issues have been identified and approving the Keystone XL will lead to the quickest and largest reduction in Persian Gulf imports, or up to 0.7 MBD within a couple years.
Besides more rapidly opening up Federal lands/waters to significantly more oil production development, the Obama Administration needs to properly manage the exports of light tight (crude) oil or condensates, and LNG. Keeping light tight oil (LTO) within the U.S. will encourage Domestic Refiners to make the investments needed to efficiently process increased volumes of LTO in the future. Keeping LNG within the U.S. will make the economics of developing alternative natural gas fueled vehicles attractive enough to displace increased volumes of diesel and gasoline petroleum motor fuels in the future. In addition to better managing current and potential future oil & gas exports, the Administration needs to persuade Oil Companies and Traders to reduce the level of imports purchased from Persian Gulf Countries and substitute safer, more secure oil imports from other Countries around the world.
The Obama Administration definitely needs to continue its support for improved energy efficiency of all the different technologies that use petroleum as a primary fuel. This includes reduced Transportation petroleum motor fuels consumption and fuels switching from petroleum-to-natural gas in the Industrial, Commercial, Residential and Power Sectors. An effective ‘All of the Above’ Energy Security policy needs to increase domestic production and reduce higher risk imports until actual reductions in required petroleum consumption can be achieved by fuels switching to cleaner, renewable fuels including electric vehicles, and increased fuel efficiency technologies. Cost effectively reducing the need for petroleum fuels will be critical for reliably sustaining and growing the future U.S. economy.
Implementing an effective new U.S. Energy Security policy that will reduce the need for Middle East OPEC Persian Gulf imports could also become the basis for a more effective strategy to degrade and destroy ISIS and other terrorist groups in the Middle East. By substantially reducing and possibly eliminating the purchase of OPEC Middle East crude and petroleum oil imports in the near future, this strategy would also become the basis for a new ‘Trade War’ to defund current and future terrorist organizations. Such a strategy would help reduce the potential financial support of growing terrorist threats and could be much more effective than current Air Force or limited future ‘Boots on the Ground’ campaigns.
22 Comments on "Growing Middle East Threats to U.S. Energy Security"
Plantagenet on Wed, 1st Oct 2014 2:20 pm
Its not surprising that Obama was caught by surprise by the rise of the the Caliphate in Syria and Iraq. He failed to attend over half of the security briefings that the intelligence community prepared for him, and apparently was day dreaming about golfing during the ones he did manage to make.
ghung on Wed, 1st Oct 2014 3:42 pm
Yeah, Plant, Bush should have been golfing more. Look where his ‘intelligence’ briefings got him (us).
Plantagenet on Wed, 1st Oct 2014 4:55 pm
Lets throw Clinton into the mix here too—he bombed Iraq off and on during his presidency as well. Not to mention Bush1 who went to war with Iraq after Iraq invaded Kuwait.
The tragic thing is that Obama might’ve learned from the mistakes of his predecessors, but he’s made the same mistakes and taken the US right into another middle east war.
Northwest Resident on Wed, 1st Oct 2014 5:02 pm
When three or four presidents in a row bomb Iraq, you have to begin to wonder if it is just a coincidence that that many presidents in a row all decided to do the bombing, or if there might be a single greater power than any president that has been behind the scenes the whole time, and that the decision to bomb Iraq is being made by that power, not by a consecutive string of Presidents.
Plantagenet on Wed, 1st Oct 2014 5:09 pm
@NWR who is the “greater power” who is ordering Obama to bomb Iraq and Syria? You think god is to blame? Sorry—-no need to call upon mysterious unknown powers to place the blame—-Obama and Bush are 100% to blame for their own actions.
JuanP on Wed, 1st Oct 2014 5:58 pm
NWR, Four consecutive presidents have bombed Iraq. I think it is because of the oil and pipelines.
Northwest Resident on Wed, 1st Oct 2014 6:34 pm
Plant — It’s been explained before several times on this forum, no need to do it again.
JuanP — Yeah, that’s what I thought — four in a row. I also strongly suspect that it has something to do with the oil and pipelines in that region. Especially when the Secretary of State says that of course it is the oil we are there for — that’s a dead giveaway!
Plantagenet on Wed, 1st Oct 2014 7:13 pm
Of course its for the oil and pipelines and the natural gas. Its for the huge strategic importance of the middle east. Thats so obvious that even Bush and obama can see it. There’s absolutely need to call upon mysterious secret conspiracies operating behind the scenes to explain the repeated US interventions in Iraq—by the time the fourth president in a row bombs Iraq it should be glaringly obvious—pay no attention to Bush’s speeches about bringing democracy to Iraq or Obama’s speeches about fighting the network of death, its actually all about the oil.
Makati1 on Wed, 1st Oct 2014 8:45 pm
The ME is a hell hole because they have the power to take down the US and never fire a shot. Saddam, Gadaffi, etc. All of them threatened to sell oil for other than USDs. All are now gone.
If Petrodollars were to become Petroeuros or Petroyaun or Petrorubles, the US would become a 3rd world country quickly.
That is now being ‘allowed’ to happen because the countries switching are Russia(nuclear), China(nuclear), Iran, Brazil, India(nuclear), and another 100+ countries at last count.
Cities in Europe are vying to be exchange centers for the Yuan trade. Central Banks are climbing on board the train to multiple reserve currencies as they too know the USD is Charmin and not even a good grade of toilet paper.
I personally exchange my income into Pesos and a small percentage of other Asian currencies and coins as soon as it hits my bank. When I go to Hong Kong, I have HK dollars. When I go to Japan, I have Yen. I even have some Yuan for my future trip to Beijing. USD? About $100 for my trips back to the States, as I might need to take a cab somewhere. (My last cab ride in Philly cost $60 for ~5 miles. I could go ~100 miles for that amount here.)
GregT on Wed, 1st Oct 2014 8:46 pm
Come on guys, how could this possibly have anything to do with oil? The US is about to become energy independant. Right?
Nope, it’s all about justice, peace, and democracy. Oh ya, and vigilance. Plenty of vigilance.
bobinget on Wed, 1st Oct 2014 10:11 pm
Today’s energy report paints a not to bright picture.
http://www.eia.gov/petroleum/supply/weekly/pdf/highlights.pdf
With many refineries down for change-over to winter blends we still came up inventory short a million barrels. That most certainly should Not be the case… IOW’s if 15% OF REFINERIES now down for maintenance were operating, we would be down at least six million Barrels.
bobinget on Wed, 1st Oct 2014 10:17 pm
Doubtless this never-ending Mideast/world/oil/ war will give President O that elusive XL pipeline excuse .
Northwest Resident on Wed, 1st Oct 2014 11:56 pm
Plant says: “…who is the “greater power” who is ordering Obama to bomb Iraq and Syria?”
Answer: Not “who”, but “what”. And that would be consensus.
Obama didn’t wake up one morning and decide hey, I have a great idea, let’s bomb Iraq and Syria. That decision derives from a vast array of intelligence being filtered by the CIA, the military and no doubt other agencies. Their conclusions and recommendations are communicated to higher ups in the chain. At the same time, consultations are being made with allies to get their input. All the feedback and all the information from these numerous sources gets filtered up and processed by numerous other higher-up individuals, who then make their recommendations and attempt to sway opinion based on what they believe needs to be done.
Somewhere in that vast information and decision-making process sits the president, listening to his advisors including military advisors, all of whom have processed large amounts of information and talked with numerous others to arrive at the conclusions they advocate.
Somewhere in the process, consensus begins to form on what must be done. Obama no doubt asks questions, makes recommendations and suggestions, proposes ideas. But so is everybody else. In the end, maybe it is Obama’s final decision and maybe not, who knows. But it is very difficult to go against a majority consensus, and in some cases probably impossible.
The decision to bomb Iraq all these many years is NOT the bright idea of four presidents in a row, but is the amalgamated consensus of thousands of people in industry, energy, military, intelligence and diplomatic professions.
To blame Obama (or any other president) as being solely responsible for bombing Iraq is ignoring the fact that there are forces — powers — that sometimes have a much greater impact on the majority consensus than just the president.
And of course, let’s not forget that many government employees in positions of power, elected and unelected, have been put there or have been greatly assisted in getting their position by very wealthy individuals and well entrenched financial interests.
Many senators, congressmen, government apparatchiks and others “might” tend to owe their first allegiance to the wealthy powers that helped them get their prestigious positions, rather than to the president of the moment. And these same people might (and often do) take advice and direction from the wealthy powers that they owe their allegiance to. And in that way, powers greater than the president attempt to exert and frequently do have significant influence on the majority consensus for a wide range of issues.
What part of that do you disagree with, Plant?
Davy on Thu, 2nd Oct 2014 4:32 am
N/R, hard to argue with that outline of power devolution toward a policy or decision in the US. I just don’t find the blame game on presidents valid with such a flow of power. It is like blaming a CEO of a corporation for bad results. That is problematic because of the dilution of the decision making process. The President’s decision is many decisions that eventually present themselves to him for a decision. His decision is influenced and shaped by the advice and the content that reaches him. Often that is a long line of dirty hands touching the data and lots of content messaging. Me personally it is not the policy and decisions of the presidents it is the personal ethics. I am disturbed by the lies. Both Bush and Obama lied straight face to the American public over NSA spying. This is well documented by the documentary reporters at PBS Frontline. The lies were contextual lies but a lie is a lie is a lie. We know there was some serious lying on the Iraq invasion of 03. This is where I will point a finger at the presidents. Planter, you are doing your intelligence a disservice by the constant finger pointing at O for all the bad policy coming out of the dark den of DC. N/R nailed it as is often the case. Planter, you make great points but the O references distract from your better comments.
Northwest Resident on Thu, 2nd Oct 2014 9:32 am
Davy — Great feedback. Thanks. The main point is, saying “Obama decided to bomb Iraq” is such a simplistic view of a very complex decision-making process. But some people are more interested in venting anger/dislike at Obama (or other presidents) than they are in considering the whole situation, and Plant is definitely one of those.
In my posts I sometimes state my opinion that there are much greater powers than the president to who have direct control over events that we little people can only witness. Let’s face it. There are some mega-billionaires out there who “own” bought-and-paid-for officials, elected and unelected. The bought-and-paid-for officials follow direct orders from the billionaires they are owned by. These “public servants” serve not the public, but their money masters. And THAT is how very wealthy individuals and entrenched financial interests exert direct control over a broad range of policies.
Plant — Now you understand, right?
ghung on Thu, 2nd Oct 2014 10:04 am
Funny how we need to put faces on this “higher power” when it’s largely a culture of imperial exploitation and gain, which all of us are participating in to some degree.
Of course, there are ‘kings of industry and finance’ who wield influence to an ever-expanding degree as they see their best laid plans becoming subject to vagaries of history; goes totally against their hubris and egos (by default, they must be control freaks).
As Greer’s latest series of articles points out, the elites are getting quite nervous as chinks appear in their faux armour. The Rooks in this imperial game of chess know they’re vulnerable as well, and their denials of the true nature of this process are getting ever more shrill and dogmatic; more frequently insisting that this central bank action, or that oil extraction process will preserve this paradigm they are so utterly invested in. They can’t stand by any ideas that suggest they will be the ultimate fools of this round of great unwindings; the next French Bourgeoisies, the next Russian Aristocracy. They can only control this faux dialogue a bit longer, and then it’s game over.
The higher power is us, and the inertia we all impart to the systems we’re utterly committed to. That’s why I’m devoting most of my energy to dis-investing in these systems, one by one. I don’t want to play that game any more. Funny thing is, it took several decades to realise I never did. Living in a stump in the forest would be a much more honest existence.
Northwest Resident on Thu, 2nd Oct 2014 5:17 pm
Plant — Here’s a review snip of a book titled “America in Decay: The Sources of Political Dysfunction” by Francis Fukuyama.
Fukuyama describes the inevitable end-game of money capturing the political machinery of the central state: every big-bucks lobby/constituency has veto power over Federal policies and budget priorities. In effect, every lobby can veto any initiative that crimps their power or their share of Federal swag.
Those lobbyists represent corporate/financial groups AND they represent individual Big Bucks Billionaires.
The lobbyists hand money out to legislators that follow orders and take instructions (explicitly or implicitly), and they withhold it from those who don’t, while funding the competitors of those who refuse to follow instructions.
BIG MONEY IS THE POWER THAT IS GREATER THAN THE PRESIDENT. By far.
The president needs consensus in order to act on big issues. Rarely in American politics is consensus formed based on the concepts of right and wrong. Rather, consensus is formed based on the BIG MONEY special interests, the puppets they deploy to do their bidding, and paid moles they have embedded into the political process at key positions and by all other kinds of orchestrated mischief with the BIG MONEY men and their companies pulling all the strings.
You should understand who is the “greater power” who is ordering Obama to bomb Iraq and Syria? It is far more complicated than that, I’m sure by now that you agree.
Davy on Thu, 2nd Oct 2014 8:41 pm
Yea NR, like the political drama television series, House of Cards. I bet Planter doesn’t watch that because that is one of “O”s favorite series.
Northwest Resident on Thu, 2nd Oct 2014 9:03 pm
Davy — I take it by Plant’s lack of response that he has humbly accepted the truth and has made an oath to never again embarrass himself (or annoy us) with one of those damn Obama-blaming one-liners.
Davy on Thu, 2nd Oct 2014 9:19 pm
NR, Planter is coming around on PO he may also dial down the “O” noise.
trickydick on Thu, 2nd Oct 2014 9:29 pm
You think god is to blame? Sorry
There are a few levels in between Presidents and God that you overlooked.
Kenz300 on Thu, 2nd Oct 2014 10:18 pm
Quote — ” Despite recent increases in domestic crude oil production and somewhat reduced consumption the U.S. still relies on over 2.0 million barrels per day (MBD) of Persian Gulf crude and petroleum oil imports or almost 12% of total current U.S. petroleum oil consumption.”
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Increasing US production……….. reduced US consumption………… rising mileage standards………. replacing 20 mpg vehicles with 40 mpg vehicles……. young people buying bicycles instead of cars……….. electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles growing in use……. more cities becoming bicycle friendly and providing safe walking and bicycling paths……….. a little more conservation by walking, biking or taking mass transit or driving fewer miles……..
If Japan was able to shut down 50 nuclear power plants and still keep the lights on then the US and the world can get by with less oil production and higher prices. It will just speed up the transition to alternatives.
Some cities and states encourage bikes………. they provide safe walking and biking lanes and trails. Cities also should encourage businesses and apartments to provide safe places to lock or store a bicycle.
Top 10 Cycling-Friendly Cities – YouTube
https://www.youtube.com/watch?v=ycKXeKfu4lo
———————
Bike Friendly Cities, The Journey to School – YouTube
https://www.youtube.com/watch?v=4-XenU6UEp8