Offshore Drilling Aff
1AC
1AC – Inherency
Observation One – Inherency
Despite some increased domestic production, the US is still heavily dependent on
imported oil
Blair and Hagee 2/26 (Dennis C. Blair and Michael W. Hagee, Blair is a former director of national intelligence and former
commander in chief of the US pacific command, and Hagee is the 33rd commandant of the US marine and both serve as cochairman of the
commission on Energy and Geopolitics, “Tempering Oil Dependence”, NYT, February 26, 2014,
http://www.nytimes.com/2014/02/26/opinion/tempering-oil-dependence.html)
When we graduated from the Naval Academy in
1968, the American economic engine was powered by a domestic oil
rather than Saudi Arabia, was the
world’s swing producer, and the United States had handled the 1967 Arab oil embargo by increasing production, keeping markets stable. Times
were about to change. Five years after our graduation, with its oil fields producing at full capacity, America found itself utterly
unprepared for another oil embargo. This one, orchestrated by the Arab members of the Organization of the
Petroleum Exporting Countries cartel, delivered an economic shock that set off nearly a decade of financial turmoil,
geopolitical uncertainty and damaging volatility in the global oil market. Today, the 1973 oil embargo is
often remembered as a crisis caused by America’s over-reliance on imported oil. Crude imports almost tripled
industry in the midst of a boom: American production accounted for one-quarter of the global total. Texas,
between 1970 and 1973, to reach nearly 30 percent of supplies. This did leave the country vulnerable to supply shocks — and our political leadership conveyed the
idea that what America needed, above all, was “independence” from foreign producers. This analysis was simply wrong. The key to America’s crisis in 1973 was our
dangerous dependence on oil to power the economy, particularly transportation — and not on our dependence on overseas suppliers per se. At the time of the
embargo, petroleum fuels accounted for 96 percent of the energy consumed by our cars, trucks, ships and aircraft. Consumers and businesses that depended on oil
to power their transportation had no choice but to pay more at the pump, or travel less. It was that vulnerability that put us at the mercy of the global oil market
and actors like OPEC. What our leaders in 1973 failed to comprehend or communicate was that no matter how much oil the United States might produce, merely
being a large producer would not confer immunity from global oil market volatility. For proof, look no farther than countries like Canada and Norway, which are net
oil exporters but whose consumers face the same oil-price volatility as Americans. Today,
America’s energy landscape again appears
abundant. Improved production technologies have unlocked vast sources of domestic oil. American crude production is projected to approach a historical
record as soon as 2015, and net liquid fuel imports are expected to account for less than 30 percent of American oil supplies this year, down from nearly 60 percent
in 2008. This
dramatic turnaround has led many to suggest that the era of oil insecurity is over. Don’t be
fooled: Despite advances in energy and automotive technologies, we remain as vulnerable as ever. Since
1973, our transportation sector’s reliance on oil has dropped by just 3 percent, to 93 percent from 96
percent. Unless we act, 90 percent of our transportation will remain oil-dependent through 2030,
according to the Department of Energy. And we must expect interruptions to global oil supplies, oil-price
spikes and market manipulation by OPEC.
98% of the Outer Continental Shelf is off-limits now – defacto moratorium on offshore
drilling
Thomas Pyle, President of the Institute for Energy Research, 7-10-2012, “Energy Department sneaks
offshore moratorium past public; Jobs and oil-supply potential are shut down,” Washington Times, p.
Newsbank
While the Obama administration was taking a victory lap last week after the 5-4 Supreme Court decision
to uphold the president's signature legislative accomplishment, Obamacare, the Interior Department
was using the media black hole to release a much-awaited five-year plan for offshore drilling. That plan
reinstitutes a 30-year moratorium on offshore energy exploration that will keep our most promising
resources locked away until long after President Obama begins plans for his presidential library. Given
the timing, it is clear that the self-described "all of the above" energy president didn't want the
American people to discover that he was denying access to nearly 98 percent of America's vast energy
potential on the Outer Continental Shelf (OCS). The Outer Continental Shelf Lands Act (OCSLA) of 1953
provided the interior secretary with the authority to administer mineral exploration and development
off our nation's coastlines. At its most basic level, the act empowers the interior secretary - in this case,
former U.S. Sen. Kenneth L. Salazar of Colorado - to provide oil and gas leases to the highest-qualified
bidder while establishing guidelines for implementing an oil and gas exploration-and-development
program for the Outer Continental Shelf. In 1978, in the wake of the oil crisis and spiking gasoline prices,
Congress amended the act to require a series of five-year plans that provide a schedule for the sale of oil
and gas leases to meet America's national energy needs. But since taking office, Mr. Obama and Mr.
Salazar have worked to restrict access to our offshore oil and gas resources by canceling lease sales,
delaying others and creating an atmosphere of uncertainty about America's future offshore
development that has left job creators looking for other countries' waters to host their offshore rigs.
More than 3 1/2 years into the Obama regime, nearly 86 billion barrels of undiscovered oil on the Outer
Continental Shelf remain off-limits to Americans. Alaska alone has about 24 billion barrels of oil in
unleased federal waters. The Commonwealth of Virginia - where Mr. Obama has reversed policies that
would have allowed offshore development - is home to 130 million barrels of offshore oil and 1.14
trillion cubic feet of natural gas. But thanks to the president, Virginians will have to wait at least another
five years before they can begin creating the jobs that will unlock their offshore resources. Once you add
those restrictions to the vast amount of shale oil that is being blocked, the administration has
embargoed nearly 200 years of domestic oil supply. No wonder the administration wanted to slip its
plan for the OCS under the radar when the whole country was focused on the health care decision. But
facts are stubborn things, and the Obama administration cannot run forever from its abysmal energy
record. In the past three years, the government has collected more than 250 times less revenue from
offshore lease sales than it did during the last year of the George W. Bush administration - down from
$9.48 billion in 2008 to a paltry $36 million last year. Meanwhile, oil production on federal lands
dropped 13 percent last year, and the number of annual leases is down more than 50 percent from the
Clinton era. Under the new Obama plan, those numbers will only get worse. The 2012-17 plan leaves out
the entire Atlantic and Pacific coasts and the vast majority of OCS areas off Alaska. It cuts in half the
average number of lease sales per year, requires higher minimum bids and shorter lease periods and
dramatically reduces lease terms. Yet, somehow, we're supposed to believe that our "all of the above"
president is responsible for increased production and reduced oil import.
Onshore shale production can’t fill in – it’s already starting to collapse
Nafeez Mosaddeq Ahmed, PhD, bestselling author, int’l security scholar, 6-11-2014, "The inevitable
demise of the fossil fuel empire," Resilience, http://www.resilience.org/stories/2014-06-11/theinevitable-demise-of-the-fossil-fuel-empire
The US shale gas bonanza was largely enabled by bubble economics – "low interest rates and easy
financings" – but is unravelling as financial wishful thinking hits the wall of production reality, and is
already a "commercial failure," Powers told the IEA. Almost "every player" has experienced "huge debts
on balance sheets" and "enormous write-downs of shale gas reserves." In 2012 alone, he said,
Southwest Energy wrote down reserves of Fayetteville from 5 to 3 trillion cubic feet (tcf); Chesapeake
Energy wrote down Haynesville and Barnett proven reserves by 4.6 tcf (erasing 20% of its proven
reserves); EnCana wrote off $1.7 billion in shale gas assets; British Petroleum wrote off $2.1 billion due
to failed investments in Fayetteville and Woodford shales; and BHP Billiton wrote off $2.84 billion in
shale assets – to name just a few. Since the beginning of the shale boom, total asset write-downs by the
largest shale players are approaching $35 billion, reports the Oil and Gas Journal. Powers, whose book
Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth anticipated many of the challenges
being experienced by the industry, warns of an imminent 1970s style "natural gas deliverability crisis,"
which through the course of the next decade will "destroy consumer confidence and shake the
American economy to its foundation." The crisis will follow a decline in the Marcellus shale which,
although originally claimed to contain 410 tcf of gas reserves, in fact likely has just 50 tcf of technically
recoverable reserves. Powers forecasts that Marcellus will peak before the end of 2015, pointing out
that Chesapeake Energy, the largest landowner and producer in the Marcellus has already "dropped
most of its rigs and is running down its inventory of wells." Are 60% of US shale 'recoverable' reserves
commercially unviable? Such reservations are increasingly recognised by industry experts. In a new
paper for the Oxford Institute for Energy Studies, Ivan Sandrea - a senior partner at Ernst & Young
London for global oil and gas in emerging markets - points to an analysis of 35 independent shale gas
and tight oil focused companies "active across the major US plays and accounting for 3 million barrels of
oil per day per of production," showing that in the last six years "their financial performance has steadily
worsened" despite production growth. In the new age of expensive, difficult-to-extract unconventionals,
investment expenditures in production costs nearly match total revenues every year, and "net cash flow
is becoming negative while debt keeps rising." Sandrea also blames the "close link between rising debt
and production, the rising cost of debt to total revenues and negative cash flow, which add to concerns
about the sustainability of the business." The cash flow per share of US independents investing in shale
oil and gas "is negative" and "trending more negative with time." Although he alludes to some vague
optimism in the industry that these trends will reverse in a few years when shale explorations are more
"fully understood and financially evaluated," there seems little evidence from the economic and
production fundamentals that this is likely. In North Dakota's Bakken, for instance, Sandrea observes
that despite robust production growth, "the average production rate per well is not increasing as before
and the amount of new wells it takes to obtain a similar increase in overall production is rising." Overall,
he describes the shale oil and gas business as "analogous to an equation that operators have yet to
solve." Based on "an holistic review of the consensus and experience to date, the equation may still not
be workable for a few more years, if at all." His sobering conclusion is that only about 40% of
purportedly recoverable US shale oil and gas reserves may be commercially viable: "… who can, or will
want to, fund the drilling of millions of acres and hundreds of thousands of wells at an ongoing loss? ...
The benevolence of the US capital markets cannot last forever for all players… A more realistic outcome
is that sections of the industry will have to restructure and focus more rapidly on the most commercially
sustainable areas of the plays, perhaps about 40% of the current acreage and resource estimates,
possibly yielding a lower production growth in the US than is currently expected."
1AC – Plan
The United States Federal Government should remove federal restrictions on offshore
drilling in the Outer Continental Shelf.
1AC – Economy Advantage
Advantage __ – Economy
Oil shock inevitable and will wreck the economy
John Rubino, 6-15-2014, "We Are So Not Prepared For Another Oil Shock," No Publication,
http://dollarcollapse.com/the-economy/we-are-so-not-prepared-for-another-oil-shock/
In one sense, energy doesn’t matter all that much to what’s coming. Once debt reaches a certain level,
oil can be $10 a barrel or $200, and either way we’re in trouble. But the cost of energy can still play a
role in the timing and shape of the next financial crisis. The housing/derivatives bubble of 2006 -2008,
for instance, might have gone on a while longer if oil hadn’t spiked to $140/bbl in 2007. And the
subsequent recovery was probably expedited by oil plunging to $40 in 2008. With the Middle East now
lurching towards yet another major war, it’s easy to envision a supply disruption that sends oil back to
its previous high or beyond. So the question becomes, what would that do to today’s hyper-leveraged
global economy? Bad things, obviously. But before looking at them, let’s all get onto the same page with
a quick explanation of why everyone seems so mad at everyone else over there: The story begins in 570
A.D. in what is now Saudi Arabia, with the birth of a boy named Muhammad into a family of successful
merchants. After having some adventures and marrying a rich widow, around the age of 40 he begins
having visions and hearing voices which lead him to write a holy book called the Qur’an. More
adventures follow, eventually producing a religious/political system called Islam that comes to dominate
a large part of the local world. In 632 Muhammad dies without naming a successor, creating a
permanent fissure between the Shi’ites, who believe that only descendants of the Prophet Muhammad
should run Islam, and the Sunnis, who want future leaders to be chosen by consensus. Now fast forward
to the end of World War I: British leader Winston Churchill sits down with some other old white guys to
draw a series of rather arbitrary lines through the Middle Eastern territories recently captured from the
Turkish Ottoman Empire. They name their creations Jordan, Syria, and Iraq and appoint kings to rule
them. Unfortunately, the new borders enclose both Sunnis and Shi’ites, along with Kurds and Christians
who don’t get along with either kind of Arab Muslim. Shortly thereafter, Israel is tossed into the mix and
massive but unequally-distributed oil fields are discovered, pretty much guaranteeing instability for as
far as the eye can see. Since then, the Western powers have been trying to keep the oil flowing by
periodically deposing/replacing leaders and making/breaking alliances. All without the slightest idea of
what they’re doing. So the situation has gone from really bad in the 1960s and 1970s to potentially
catastrophic today as various Middle Eastern dictatorships and terrorist groups plot to create a panIslamic “New Caliphate” while secretly developing weapons of mass destruction. Which brings us to the
present crisis: The US, having deposed Iraqi dictator Saddam Hussein and spent a trillion or so dollars
trying to create a functioning democracy, has pulled out, only to see the new Shi’ite government
oppress the Sunni minority into rebellion. With the help (or leadership, it’s not clear) of Syrian Islamists
trained in that country’s ongoing civil war, the Sunnis are on the verge of taking over Iraq, and both the
US and (Shi’ite) Iran are being pulled back in — apparently on the same side. It’s a mess, in other words,
and the flow of oil, of which Iraq and Iran produce a lot, is now threatened. So what would $150/bbl oil
mean today? Several things: Another recession. The US economy contracted at an annual rate of about
2% in the first quarter and isn’t nearly as strong as analysts had predicted going forward. Let gas go to
$5 a gallon, and the consumer spending on which the US economic model depends would dry up. Put
another way, we might spend the same amount but it will be mostly for gas and not much else. So much
for the recovery. Equity bear market. Stock prices depend on corporate profits, which in turn depend on
sales. If Americans buy less, corporations earn less. With blue chip equities currently priced for
perfection, major companies faced with a sales slowdown will, if they want to keep their stock prices
from tanking, have to borrow even more money and buy back even more shares, which will only work
until interest costs start consuming what’s left of their profits. Then US stocks fall hard. Currency crisis. If
Saudi Arabia manages to stay out of this latest conflict, it will see its revenues surge as it sells the same
amount of oil at higher prices. But it’s not happy with the US (something about us recently tilting
towards Iran) and apparently no longer feels obligated to accept only dollars for its oil. Let it start
accepting euros, yen and yuan, and the result will be lessened demand for dollars, a falling dollar
exchange rate and all manner of turmoil in global bond markets. Derivatives implosion. Derivatives —
basically private bets on the behavior of interest rates, currency exchange rates and corporate bond
defaults — on the books of major banks have actually increased in the five years since those instruments
nearly destroyed the global financial system. There are between half a quadrillion and one quadrillion
dollars face value of derivatives out there, and a spike in financial market volatility would cause a lot of
them to blow up. There are other possible consequences of a major Middle East war, but the preceding
is enough to make the point that the more leveraged a system is, the more vulnerable it is to external
shocks. And no one has ever been as leveraged as we are right now.
Empirics prove oil shocks uniquely cause US recession
Jennifer Slouhy 14, covers energy policy and congressional affairs for the Houston Chronicle and
Hearst Newspapers, Business Day, June 19, 2014, Iraq crisis threatens oil price shock,
http://www.smh.com.au/business/iraq-crisis-threatens-oil-price-shock-20140618-3ae3u.html
If the conflict in Iraq forced a third of the country's oil production offline, it could thrust crude prices up
$US40 a barrel, a group of former military leaders and energy experts has warned. Although supply fears have abated slightly,
the conflict has so far increased the ''risk premium'' embedded in international oil prices and put Brent crude
just above $US113 on Tuesday. Further unrest in Iraq could cause oil costs to soar much higher, given the limited buffer of
production capacity worldwide able to make up for any significant strife-related shortfalls, according to a new report from Securing America's
Future Energy. Iraq is the second-biggest producer in OPEC, the Organisation of the Petroleum-Exporting Countries, and Saudi Arabia was
already under pressure to boost production by 900,000 barrels per day just to keep up with rising global demand. ''The loss of even one third of
total Iraqi production - 1 million barrels per day - would essentially eliminate global spare production capacity,'' the SAFE report says. ''In that
event, oil prices would likely reach or exceed the highs reached in July 2008.'' Despite soaring US production - about 8.2 million barrels per day
in March - the nation still imports large amounts of foreign crude. The International Energy Agency has said Iraq would
account for 60 per cent of the increase in OPEC oil production capacity between now and 2020 and be a major driver of global crude production
growth even after that point. The
analysis also documents the link between oil price shocks and economic
activity in the US. Every US recession since 1973 has been preceded by or occurred during an oil-price
spike, the report notes.
Only expanded drilling can prevent the shock
Nafeez Mosaddeq Ahmed, PhD, bestselling author, int’l security scholar, 6-11-2014, "The inevitable
demise of the fossil fuel empire," Resilience, http://www.resilience.org/stories/2014-06-11/theinevitable-demise-of-the-fossil-fuel-empire
The latest data from the International Energy Agency (IEA) and other sources proves that the oil and gas
majors are in deep trouble. Over the last decade, rising oil prices have been driven primarily by rising
production costs. After the release of the IEA's World Energy Outlook last November, Deutsche Bank's
former head of energy research Mark Lewis noted that massive levels of investment have corresponded
to an ever declining rate of oil supply increase: "Over the past decade, the oil and gas industry's
upstream investments have registered an astronomical increase, but these ever higher levels of capital
expenditure have yielded ever smaller increases in the global oil supply. Even these have only been
made possible by record high oil prices. This should be a reality check for those now hyping a new age of
global oil abundance." Since 2000, the oil industry's investments have risen by 180% - a threefold
increase - but this has translated into a global oil supply increase of just 14%. Two-thirds of this increase
has been made-up by unconventional oil and gas. In other words, the primary driver of the cost
explosion is the shift to expensive and difficult-to-extract unconventionals due to the peak and plateau
in conventional oil production since 2005. The increasingly dislocated economics of oil production
According to Lewis, who now heads up energy transition and climate change research at leading
investment firm Kepler Cheuvreux: "The most straightforward interpretation of this data is that the
economics of oil have become completely dislocated from historic norms since 2000 (and especially
since 2005), with the industry investing at exponentially higher rates for increasingly small incremental
yields of energy." The IEA's new World Energy Investment Outlook published last week revised the
agency's estimates of future oil industry capital expenditures out to 2035 even higher, from $9.4 trillion
to $11.3 trillion – an increase of 20%. Oil prices could in turn increase by $15 per barrel in 2025 if
investment does not pick up. Most of the investment increase required would be devoted not to new
sources of production, but "to replace lost production from depleting fields," said Lewis. In the IEA's own
words: "More than 80% of this spending [of between $700 and $850 billion annually by the 2030s] is
required just to keep production at today's levels, that is, to compensate for the effects of decline at
existing fields. The figure is higher in the case of oil (at close to 90% of total capital expenditure)." But as
Lewis pointed out, the "risk of insufficient investment" is not a hypothetical matter that might occur a
decade from now, but is "already today a clear and present danger" as most of the oil and gas majors
have revised down their plans for capital expenditure in recent months. Stranded by post-peak oil price
hikes There is therefore "a medium to longer-term threat" to the oil industry's "business model from
high and rising oil prices." We just don't get the same quality of energy from shale oil and gas as cheap
crude - and what we do get comes at a higher cost. Although oil prices are at record-high levels,
production costs are rising so dramatically that they are fatally undermining oil company profits, forcing
them to announce cut backs in expenditures this year. ExxonMobil, Chevron and Royal Dutch Shell "are
now signalling that they expect their capital expenditure (capex) to level off in the next few years,"
reported the Financial Times. "And they are likely to come under continued pressure to bring it down."
Mark Lewis thus concludes that "the upstream oil industry is already struggling to make the returns that
shareholders require for the kind of upstream risks that are now being taken." Profits are being
squeezed, and they'll only get slimmer with time. Other factors likely to push oil prices higher over
coming decades include the increasing reliance on shale gas "to fill the supply gap… in the face of stalling
crude-oil production since 2005," which has "significantly lower energy density than crude oil";
"declining exports of crude oil globally since 2005 as OPEC consumes more and more of its own
production"; and "the ever-present but recently heightened geopolitical risks in key oil-producing
regions."
Expanded supply from domestic drilling is key – shields the U.S from economic
blackmail and oil shocks
CENR 2014, U.S Senate Committee on Energy and Natural Resources, January 30 2014, Homeland Security Digital Library “U.S. CRUDE
th
OIL EXPORTS: OPPORTUNITIES AND CHALLENGES “ Includes Statements From the following, Ron Wyden Chairman, Senate Committee on
Energy and Natural Resources Harold Hamm Chairman and Chief Executive Officer, Continental Resources, Inc., Graeme Burnett Senior Vice
President, Fuel Optimization, Delta Air Lines, Amy Myers Jaffe Executive Director of Energy and Sustainability, Graduate School of Management,
Institute of Transportation Studies Daniel J. Weiss Senior Fellow, Director of Climate Strategy, Center for American Progress,
https://www.hsdl.org/?view&did=750046 //RD
As American shale production expands from natural gas to oil, the geopolitical benefits will mushroom both by
improving U.S. financial strength and by eliminating U.S. vulnerability to economic blackmail. The upshot
of shale oil will be to reverse the course of history and roll back the clock to pre-1973. Oil producing states
will no longer be able to use the lever of a possible energy supply cut-off to America to pressure
Washington to adjust its foreign policy. If domestic shale oil abundance someday more closely matches shale gas
abundance and the US has no imports to replace, then we will have more discretion on when and how to
use the Strategic Petroleum Reserve. In such circumstances, a President could consider using the SPR to
either loan oil to other countries for geopolitical aims (for example, to counter the economic blackmail of
the “oil weapon” against an allied country) or to provide extra oil into the market to head off attempts
by coalitions of other energy producers to create artificial rises in global prices, should such oil price
spikes start to cause financial or economic harm to the global economy.
Drilling independently boosts the economy – economic effects happen fast
API 2014, American Petroleum Institute, January, “Offshore Access to Oil and Natural Gas Resources”, http://www.api.org/policy-andissues/policy-items/exploration/~/media/Files/Oil-and-Natural-Gas/Offshore/OffshoreAccess-Primer-lores.pdf
America’s vast offshore energy reserves present an opportunity to improve our economy, increase our
energy security and create tens of thousands of jobs. Opening the U.S. Atlantic Outer Continental Shelf (OCS) to
offshore oil and natural gas development could turn that opportunity into reality. Oil and natural gas
production off our Atlantic coast is a potential gold mine. Developing oil and natural gas in the Atlantic
could put hundreds of thousands of Americans to work, make us more energy secure, and bring in
needed revenue for the government. But none of these benefits will appear unless the federal
government follows pro-development energy policies. For the past five years, the Obama administration has been
considering whether to allow seismic surveying off the Atlantic coast, which would give energy producers better knowledge of where potential
resources might be located. Americans
stand to benefit if seismic surveying permits are approved and the
Atlantic and other offshore areas that have been kept off-limits are included in the next five-year leasing program.
Major capital investments, job creation, and revenue to the government would all begin years before
the first barrel goes to market. Expanding offshore energy production would also send a strong signal to
the energy markets that America is leading the world in developing energy resources, which could help
put downward pressure on prices.
Economic collapses causes nuclear war
Cesare Merlini 11, nonresident senior fellow at the Center on the United States and Europe and
chairman of the Board of Trustees of the Italian Institute for International Affairs, May 2011, “A PostSecular World?”, Survival, Vol. 53, No. 2
Two neatly opposed scenarios for the future of the world order illustrate the range of possibilities, albeit at the risk of oversimplification. The first scenario entails the premature
One or more of the acute tensions apparent today evolves into an open and
traditional conflict between states, perhaps even involving the use of nuclear weapons. The crisis
crumbling of the post-Westphalian system.
might be triggered by a collapse of the global economic and financial system, the vulnerability of which we have just
experienced, and the prospect of a second Great Depression, with consequences for peace and democracy
similar to those of the first. Whatever the trigger, the unlimited exercise of national sovereignty, exclusive selfinterest and rejection of outside interference would self-interest and rejection of outside interference would likely be amplified,
emptying, perhaps entirely, the half-full glass of multilateralism, including the UN and the European Union. Many of the more likely conflicts, such as between Israel
and Iran or India and Pakistan, have potential religious dimensions. Short of war, tensions such as those related to immigration might become unbearable. Familiar issues
of creed and identity could be exacerbated. One way or another, the secular rational approach would be
sidestepped by a return to theocratic absolutes, competing or converging with secular absolutes such as unbridled
nationalism.
1AC – Hegemony Advantage
Advantage __ – Hegemony
US oil import dependence hurts hegemony and undermines national security
Rebecca Lefton And Daniel J. Weiss, 1-13-2010, "Oil Dependence Is a Dangerous Habit," American
Progress, http://www.americanprogress.org/issues/green/report/2010/01/13/7200/oil-dependence-isa-dangerous-habit/
Oil imports fuel “dangerous or unstable” governments The United States imported 4 million barrels of
oil a day—or 1.5 billion barrels total—from “dangerous or unstable” countries in 2008 at a cost of about
$150 billion. This estimate excludes Venezuela, which is not on the State Department’s “dangerous or
unstable” list but has maintained a distinctly anti-American foreign and energy policy. Venezuela is one
of the top five oil exporters to the United States, and we imported 435 million barrels of oil from them in
2008. As a major contributor to the global demand for oil the United States is paying to finance and
sustain unfriendly regimes. Our demand drives up oil prices on the global market, which oftentimes
benefits oil-producing nations that don’t sell to us. The Center for American Progress finds in “Securing
America’s Future: Enhancing Our National Security by Reducing oil Dependence and Environmental
Damage,” that “because of this, anti-Western nations such as Iran—with whom the United States by law
cannot trade or buy oil—benefit regardless of who the end buyer of the fuel is.” Further, the regimes
and elites that economically benefit from rich energy resources rarely share oil revenues with their
people, which worsens economic disparity in the countries and at times creates resource-driven tension
and crises. The State Department cites oil-related violence in particular as a danger in Nigeria, where
more than 54 national oil workers or businesspeople have been kidnapped at oil-related facilities and
other infrastructure since January 2008. Attacks by insurgents on the U.S. military and civilians continue
to be a danger in Iraq. Our oil dependence will also be increasingly harder and more dangerous to
satisfy. In 2008 the United States consumed 23 percent of the world’s petroleum, 57 percent of which
was imported. Yet the United States holds less than 2 percent of the world’s oil reserves. Roughly 40
percent of our imports came from Canada, Mexico, and Saudi Arabia, but we can’t continue relying on
these allies. The majority of Canada’s oil lies in tar sands, a very dirty fuel, and Mexico’s main oil fields
are projected dry up within a decade. Without reducing our dependence on oil we’ll be forced to
increasingly look to more antagonistic and volatile countries that pose direct threats to our national
security.
Further drilling expansions are key to heg and the economy – current sales aren’t
enough
Mark Green, Comm. Prof @ GMU, 3-19-2014, "Gulf Lease Auction Points to Our Offshore Potential,"
No Publication, http://energytomorrow.org/blog/2014/march/gulf-lease-auction-points-to-ouroffshore-potential
This week’s central Gulf of Mexico lease auction, which saw oil and natural gas companies pledge more
than $850 million in winning amounts, certainly helps support the United States’ status as an energy
superpower. Developing more of our own oil and natural gas – and this week’s auction is a big step
toward production – makes our country more energy secure, creates jobs and boosts the U.S. in global
energy marketplace. The potential benefits from future energy production from this week’s auctioned
leases – jobs, economic growth and revenue for government – also suggest a couple of “what ifs”: What
if the federal government included the Atlantic Outer Continental Shelf (OCS) in its next five-year leasing
plan, the first step toward development in those areas? What if the U.S. opened more of the eastern
Gulf to exploration and development? A recent study of the potential in just the Atlantic OCS offers
insight: Nearly 280,000 new jobs could be created More than $50 billion in new revenue for government
could be generated Up to 1.3 million barrels of oil equivalent per day could be added to domestic
production – approximately 70 percent of current Gulf output. API Upstream and Industry Operations
Director Erik Milito: “Every lease sale held in the U.S. strengthens our hand as an energy superpower.
Offshore lease sales have raised more than $17.3 billion for the government over the last 10 years and
allowed our industry to create more jobs and produce more energy here at home. Holding lease sales in
the Atlantic and more of the Eastern Gulf of Mexico would make America stronger economically and
diplomatically.” Additional detail from the new Gulf lease auction by Fuel Fix.com: 50 companies filed
bids Many of the 380 total bids were for deep-water territory During the last central Gulf sale a year
ago, 52 companies submitted 407 bids on 320 blocks, with high bids totaling $1.2 billion Acting Assistant
Interior Secretary Tommy Beaudreau: “I know there’s exciting stuff happening in a lot of different areas .
. . but the Gulf of Mexico is and will be here to stay. The gulf of Mexico and the offshore industry of the
United States is and will continue to be one of the bedrocks of the nation’s energy portfolio and our
country’s energy future.” This is true. Developing America’s offshore oil and natural gas reserves is
fundamental to our country’s energy strength and its future. While this latest lease auction is a positive
step, 87 percent of federal offshore acreage remains off limits to development. More of these offshore
reserves need to be accessible for oil and natural gas development. This starts with including more areas
in the government’s five-year offshore leasing plan. Access, a reasonable permitting process and a
consistent approach to regulation are key to realizing the benefits of America’s energy wealth, offshore
and on.
Even if the aff can’t solve all dependence, it increases US bargaining leverage and locks
in heg
Joseph S. Nye, Harvard Prof, seriously famous, Summer 2012, “The Geopolitics of U.S. Energy
Independence,” International Economy, http://www.internationaleconomy.com/TIE_Su12_GeopoliticsEnergySymp.pdf
At the same time, America's bargaining position in world politics should be enhanced. Power arises from
asymmetries in interdependence. You and I may both depend on each other, but if I depend less than
you do, my bargaining power is increased. For decades, the United States and Saudi Arabia have had a
balance of asymmetries in which we depend on them as the swing producer of oil and they depended
on us for ultimate military security. Now the bargains will be struck on somewhat better terms from our
point of view. In the area of natural gas, Russia has enjoyed leverage over Europe and its small
neighbors through its control of supply through pipelines. As North America becomes self-sufficient in
gas, liquefied natural gas from various regions is freed up to provide alternative sources for Europe and
this will diminish Russian leverage. In East Asia, which has become the focus of American foreign policy.
China will find itself increasingly dependent on Middle East oil. American efforts to persuade China to
play more of a role in producing public goods of stability in the region may be enhanced, and China's
awareness of the vulnerability of its supply routes to American naval disruption in the unlikely case of
conflict could also have a subtle effect on the balance of bargaining power. A balance of energy imports
and exports does not produce pure independence, but it does alter the power relations involved in
energy interdependence.
Expanded oil production will ensure sustainable US heg – builds alliances and
technology expertise
Dan Mahaffee, Dir. Policy and Board Relations @ Center for the Study for the Pres., Summer 2012,
“The Geopolitics of U.S. Energy Independence,” International Economy, http://www.internationaleconomy.com/TIE_Su12_GeopoliticsEnergySymp.pdf
If the United States becomes a net energy exporter within a decade through expanded oil exploration,
alter- native energy innovation, and natural gas shale "frack- ing" techniques, we can continue to shape
the global marketplace. As a result, the future will look an awful lot like the balance of power we enjoy
today. With the development of new U.S. energy exports, our close allies will be a natural destination
for these prod- ucts. While post-nuclear Japan will be a major destina- tion for U.S. energy, there is
already an existing open-market affinity between the United States and Europe. Although Germany may
need to seek closer rela- tions with Russia for its energy needs. it could also tum to its more natural ally,
the United States, for exports, as well as U.S. expertise to help harness Europe's own sources of energy
from European shale formations. Ultimately. the United States may find itself in a position of power. not
in terms of barrels or BTUs. but rather in the technical expertise we develop in cutting-edge energy
extraction. In this respect, investments today in our education system and science infrastructure may be
the deciding factor. The deep and longstanding alliances with NATO for security, and the IEA for energy,
will likely prove much stronger than short-terrn relationships with Russia; such a marriage of
convenience will likely collapse as the Putin regime begins to use energy policy to control relation- ships
with Europe and the Russian "near-abroad." As for the Middle East, while the United States may be able
to develop its own oil supplies, the extraction cost of Middle 'astern energy resources will ' ' . at least for
the foreseeable future. Natural gas cannot and will not replace oil on a one-for-one basis across th U.S.
eneijgy supply: the Mid- dle East, particularly Sau i Arabia and the Gulf States. will remain vital to the
global energy portfolio. However. the United States can no longer separate itself from regional energy
issues, as the health of the global energy sgp_ply-impacts the.global economy,' which, in turn, impacts
the United States. M "V . Ultimately, maintaining America's' historic lead in energy technologies and
innovations is 'essential to U.S. security interests, especially as future conflicts are increasingly likely to
involve energy scarcity. '
U.S. hegemony prevents nuclear great power war
Brooks, Ikenberry, and Wohlforth 13 (Stephen, Associate Professor of Government at Dartmouth
College, John Ikenberry is the Albert G. Milbank Professor of Politics and International Affairs at
Princeton University in the Department of Politics and the Woodrow Wilson School of Public and
International Affairs, William C. Wohlforth is the Daniel Webster Professor in the Department of
Government at Dartmouth College “Don’t Come Home America: The Case Against Retrenchment,”
International Security, Vol. 37, No. 3 (Winter 2012/13), pp. 7–51)
deep engagement is that it prevents the emergence of a far more dangerous global security
environment. For one thing, as noted above, the United States’ overseas presence gives it the leverage to restrain partners from
taking provocative action. Perhaps more important, its core alliance commitments also deter states with aspirations to regional hegemony from
contemplating expansion and make its partners more secure, reducing their incentive to adopt solutions to
A core premise of
that threaten others and thus stoke security dilemmas. The contention that engaged U.S. power dampens the baleful effects of anarchy is
consistent with influential variants of realist theory. Indeed, arguably the scariest portrayal of the war-prone world that would emerge absent the “American Pacifier” is provided in the works of
John Mearsheimer, who forecasts dangerous multipolar regions replete with security competition, arms
races, nuclear proliferation and associated preventive war temptations, regional rivalries, and even runs
at regional hegemony and full-scale great power war. 72 How do retrenchment advocates, the bulk of whom are realists, discount this benefit? Their arguments are
their security problems
complicated, but two capture most of the variation: (1) U.S. security guarantees are not necessary to prevent dangerous rivalries and conflict in Eurasia; or (2) prevention of rivalry and conflict in Eurasia is not a U.S. interest. Each
response is connected to a different theory or set of theories, which makes sense given that the whole debate hinges on a complex future counterfactual (what would happen to Eurasia’s security setting if the United States truly
disengaged?). Although a certain answer is impossible, each of these responses is nonetheless a weaker argument for retrenchment than advocates acknowledge. The first response flows from defensive realism as well as other
international relations theories that discount the conflict-generating potential of anarchy under contemporary conditions. 73 Defensive realists maintain that the high expected costs of territorial conquest, defense dominance, and
an array of policies and practices that can be used credibly to signal benign intent, mean that Eurasia’s major states could manage regional multipolarity peacefully without the American pacifier. Retrenchment would be a bet on
this scholarship, particularly in regions where the kinds of stabilizers that nonrealist theories point to—such as democratic governance or dense institutional linkages—are either absent or weakly present. There are three other
major bodies of scholarship, however, that might give decisionmakers pause before making this bet. First is regional expertise. Needless to say, there is no consensus on the net security effects of U.S. withdrawal. Regarding each
region, there are optimists and pessimists. Few experts expect a return of intense great power competition in a post-American Europe, but many doubt European governments will pay the political costs of increased EU defense
The result might be a Europe that is incapable of securing itself from
various threats that could be destabilizing within the region and beyond (e.g., a regional conflict akin to the 1990s Balkan wars), lacks
capacity for global security missions in which U.S. leaders might want European participation, and is
vulnerable to the influence of outside rising powers. What about the other parts of Eurasia where the United States has a substantial military presence?
Regarding the Middle East, the balance begins to swing toward pessimists concerned that states currently backed by Washington— notably Israel, Egypt, and Saudi
Arabia—might take actions upon U.S. retrenchment that would intensify security dilemmas. And concerning
East Asia, pessimism regarding the region’s prospects without the American pacifier is pronounced. Arguably
the principal concern expressed by area experts is that Japan and South Korea are likely to obtain a nuclear capacity and increase their
military commitments, which could stoke a destabilizing reaction from China. It is notable that during the Cold War, both South Korea and
cooperation and the budgetary costs of increasing military outlays. 74
Taiwan moved to obtain a nuclear weapons capacity and were only constrained from doing so by a still-engaged United States. 75 The second body of scholarship casting doubt on the bet on defensive realism’s sanguine portrayal
is all of the research that undermines its conception of state preferences.
Defensive realism’s optimism about what would happen if the United States retrenched is very much dependent on its
particular—and highly restrictive—assumption about state preferences; once we relax this assumption, then much of its basis for optimism vanishes. Specifically, the prediction of post-American tranquility throughout Eurasia rests
on the assumption that security is the only relevant state preference, with security defined narrowly in terms of protection from violent external attacks on the homeland. Under that assumption, the security problem is largely
Burgeoning research across the social and other
sciences, however, undermines that core assumption: states have preferences not only for security but also
for prestige, status, and other aims, and they engage in trade-offs among the various objectives. 76 In addition, they define security not just in terms of territorial protection but in view of
many and varied milieu goals. It follows that even states that are relatively secure may nevertheless engage in highly competitive
behavior. Empirical studies show that this is indeed sometimes the case. 77 In sum, a bet on a benign postretrenchment Eurasia is a bet that leaders of major
countries will never allow these nonsecurity preferences to influence their strategic choices. To the degree that these bodies of scholarly knowledge have predictive leverage, U.S. retrenchment would
result in a significant deterioration in the security environment in at least some of the world’s key
regions. We have already mentioned the third, even more alarming body of scholarship. Offensive realism predicts that the withdrawal of the
American pacifier will yield either a competitive regional multipolarity complete with associated
insecurity, arms racing, crisis instability, nuclear proliferation, and the like, or bids for regional hegemony, which may be
beyond the capacity of local great powers to contain (and which in any case would generate intensely
competitive behavior, possibly including regional great power war). Hence it is unsurprising that retrenchment advocates are prone to focus on the
solved as soon as offense and defense are clearly distinguishable, and offense is extremely expensive relative to defense.
second argument noted above: that avoiding wars and security dilemmas in the world’s core regions is not a U.S. national interest. Few doubt that the United States could survive the return of insecurity and conflict among
Eurasian powers, but at what cost? Much of the work in this area has focused on the economic externalities of a renewed threat of insecurity and war, which we discuss below. Focusing on the pure security ramifications, there are
overall higher levels of conflict make the world a more
dangerous place. Were Eurasia to return to higher levels of interstate military competition, one would see overall higher levels of military
spending and innovation and a higher likelihood of competitive regional proxy wars and arming of client
states—all of which would be concerning, in part because it would promote a faster diffusion of military power away from the
United States. Greater regional insecurity could well feed proliferation cascades, as states such as Egypt,
Japan, South Korea, Taiwan, and Saudi Arabia all might choose to create nuclear forces. 78 It is unlikely that proliferation
two main reasons why decisionmakers may be rationally reluctant to run the retrenchment experiment. First,
decisions by any of these actors would be the end of the game: they would likely generate pressure locally for more proliferation. Following Kenneth Waltz, many retrenchment advocates are proliferation optimists, assuming that
Proliferation optimism rests
on assumptions of rationality and narrow security preferences. In social science, however, such assumptions are
inevitably probabilistic. Optimists assume that most states are led by rational leaders, most will overcome organizational problems and resist the temptation to preempt before feared neighbors
nuclearize, and most pursue only security and are risk averse. Confidence in such probabilistic assumptions declines if the world were to
move from nine to twenty, thirty, or forty nuclear states. In addition, many of the other dangers noted by analysts who are concerned about the destabilizing effects
nuclear deterrence solves the security problem. 79 Usually carried out in dyadic terms, the debate over the stability of proliferation changes as the numbers go up.
of nuclear proliferation—including the risk of accidents and the prospects that some new nuclear powers will not have truly survivable forces—seem
prone to go up as the number of nuclear powers grows. 80 Moreover, the risk of “unforeseen crisis dynamics” that
could spin out of control is also higher as the number of nuclear powers increases. Finally, add to these concerns the enhanced danger of nuclear leakage, and a world with overall higher levels of
security competition becomes yet more worrisome. The argument that maintaining Eurasian peace is not a U.S. interest faces a second problem. On widely accepted realist assumptions, acknowledging that U.S.
engagement preserves peace dramatically narrows the difference between retrenchment and deep engagement. For many supporters of retrenchment, the optimal strategy for a power such as
the United States, which has attained regional hegemony and is separated from other great powers by oceans, is offshore balancing: stay over the horizon and “pass the buck” to local powers to do the dangerous work of
counterbalancing any local rising power. The United States should commit to onshore balancing only when local balancing is likely to fail and a great power appears to be a credible contender for regional hegemony, as in the cases
of Germany, Japan, and the Soviet Union in the midtwentieth century. The problem is that China’s rise puts the possibility of its attaining regional hegemony on the table, at least in the medium to long term. As Mearsheimer notes,
“
The United States will have to play a key role in countering China, because its Asian neighbors are not strong enough to do it by themselves.” 81 Therefore, unless
China’s rise stalls, “the United States is likely to act toward China similar to the way it behaved toward the Soviet Union during the Cold War.” 82 It follows that the United States should take no action that would compromise its
capacity to move to onshore balancing in the future. It will need to maintain key alliance relationships in Asia as well as the formidably expensive military capacity to intervene there. The implication is to get out of Iraq and
the argument that U.S. security commitments are
unnecessary for peace is countered by a lot of scholarship, including highly influential realist scholarship. In addition, the argument that Eurasian peace is
Afghanistan, reduce the presence in Europe, and pivot to Asia— just what the United States is doing. 83 In sum,
unnecessary for U.S. security is weakened by the potential for a large number of nasty security consequences as well as the need to retain a latent onshore balancing capacity that dramatically reduces the savings retrenchment
might bring. Moreover, switching between offshore and onshore balancing could well be difªcult. Bringing together the thrust of many of the arguments discussed so far underlines the degree to which the case for retrenchment
the United States lowers security competition in the
world’s key regions, thereby preventing the emergence of a hothouse atmosphere for growing new military
capabilities. Alliance ties dissuade partners from ramping up and also provide leverage to prevent military transfers to potential rivals. On top of all this, the United States’ formidable military machine may deter
misses the underlying logic of the deep engagement strategy. By supplying reassurance, deterrence, and active management,
entry by potential rivals. Current great power military expenditures as a percentage of GDP are at historical lows, and thus far other major powers have shied away from seeking to match top-end U.S. military capabilities. In
addition, they have so far been careful to avoid attracting the “focused enmity” of the United States. 84 All of the world’s most modern militaries are U.S. allies (America’s alliance system of more than sixty countries now accounts
for some 80 percent of global military spending), and the gap between the U.S. military capability and that of potential rivals is by many measures growing rather than shrinking. 85
Oil dependence destroys US hegemony and independently spurs terrorism
David B. Sandalow, May 22, 2008, David B. Sandalow is the assistant secretary of energy for policy and international
affairs and a senior fellow at Brookings, “Rising Oil Prices, Declining National Security,”
http://www.brookings.edu/research/testimony/2008/05/22-oil-sandalow
First, oil
dependence strengthens Al Qaeda and other Islamic terrorists. The United States is in a long war.
Islamic fundamentalists struck our shores and are determined to do so again. Like the Cold War, this struggle has many
causes and will last for generations. Unlike the Cold War, oil dependence plays a central role in the struggle. For more than 50 years,
the need to protect oil flows has shaped U.S. policy and relationships in the Persian Gulf. During the Cold War, we
supported the Shah of Iran in part to keep oil flowing from the region. In 1980, President Carter declared that attempts by outside forces to gain
control of the Persian Gulf would be “repelled by any means necessary, including military force.” In 1991, with
Saddam Hussein in Kuwait, President George H.W. Bush told Congress that war was necessary because “[v]ital economic interests
are at risk…Iraq itself controls some 10% of the world’s proven oil reserves. Iraq plus Kuwait controls
twice that.” After removing Saddam from Kuwait in 1991, U.S. troops remained in Saudi Arabia where their presence bred
great resentment. These steps to secure oil flows have come at a cost. By making us central players in a region torn by
ancient rivalries, oil dependence has exposed us to resentment, vulnerability and attack. Osama bin Laden’s first fatwa, in
1996, was titled “Declaration of War against the Americans Occupying the Land of the Two Holy Places.” Today, deep resentment of the U.S. role
in the Persian Gulf remains a powerful recruitment tool for Islamic fundamentalists. Yet the United
States faces severe constraints in responding to this resentment. With half the world’s proven oil
reserves, the world’s cheapest oil and the world’s only spare production capacity, the Persian Gulf will
remain an indispensable region for the global economy so long as modern vehicles run only on oil. To
protect oil flows, the U.S. policymakers will feel compelled to maintain relationships and exert power in
the region in ways likely to fuel Islamic terrorists. Compounding these problems, the huge money flows
into the Persian Gulf from oil purchases help finance terrorist networks. Al Qaeda raises funds from an
extensive global network, with Islamic charities and NGOs playing an important role. Saudi money provides critical support for
madrassas with virulent anti-American views. The sharp increase in oil prices in recent months deepens
these problems, further enriching those who fund terrorists committed to our destruction. Second, oil
dependence strengthens oil-exporting nations that oppose U.S. interests. Several leading oil exporters
pursue policies that threaten the United States. Today, the most serious threat comes from Iran, whose
nuclear ambitions could put terrifying new weapons into the hands of terrorists. Yet efforts to respond
to this threat with multilateral sanctions have often foundered on fears that Iran would retaliate by
withholding oil from world markets. Indeed Iran does not even need to withhold oil from world markets to play its “oil card.” The mere fear it
might do so can cause oil prices to climb, as traders build a “risk premium” into the cost of every barrel. This puts pressure on governments around the world to
minimize “saber-rattling” against Iran, in order to help control oil prices. The result – an
emboldened Iran, more confident in its ability
to pursue policies that threaten U.S. national security. In short, three decades after the first oil shocks -- and a quarter-century after
the humiliating capture of U.S. diplomats in Tehran – we remain hostage to the world’s continuing dependence on oil.
Other oil-exporting nations pose problems as well. President Hugo Chavez of Venezuela – the world’s eighth largest exporter -- fans
anti-American sentiments throughout Latin American. Oil revenues not only help maintain his grip on power, they allow him to finance policies that put U.S. assets
at risk in countries such as Bolivia and Argentina. Here again, rising
oil prices enhance the wealth and power of those who wish
us ill, putting all Americans at risk. Third, oil dependence endangers our men and women in uniform. Oil
dependence jeopardizes the safety of our troops. In Iraq during the past five years, many brave men and
women in have died in fuel convoys, which are often vulnerable to attack. Diesel generators display a
heat signature easily detected by some enemies. In July 2006, Major General Richard Zilmer, commander of coalition forces in western
Iraq, made a “Priority 1” request for combat-ready renewable energy systems. Maj. Gen. Zilmer noted the need for frequent resupply convoys, in particular for
petroleum, and wrote that without renewable energy systems: “…personnel loss rates are likely to continue at their current rate...[with the] potential to jeopardize
mission success.” Rising oil prices also put budgetary strains on the Pentagon, a leading purchaser of petroleum products. Finally,
oil dependence
undermines democracy and good governance around the world. Oil wealth corrodes democratic
institutions. This dynamic is not inevitable, but it is widespread. A growing body of scholarly work explores this topic, concluding that oil
wealth is strongly associated with corruption and authoritarian rule. New York Times Foreign Affairs columnist Tom Friedman
has written about the “First Law of Petropolitics” -- that the price of oil and pace of freedom move in opposite directions. A few
examples underscore these trends. Bahrain, the Persian Gulf country with the smallest oil reserves, was also the first to hold free elections. As oil prices climbed in
recent years, both Vladmir Putin and Hugo Chavez moved away from democratic institutions and toward more authoritarian rule. In
Nigeria, oil
abundance contributes to widespread corruption.
High risk of nuclear terror – experts agree there’s motivation and capability
Matthew Bunn, et al, Public Policy Prof @ Harvard, 10-2-2013, “Stepts to Prevent Nuclear Terrorism,”
Belfer Center,
http://belfercenter.ksg.harvard.edu/publication/23430/steps_to_prevent_nuclear_terrorism.html
I. Introduction In
2011, Harvard’s Belfer Center for Science and International Affairs and the Russian Academy of Sciences’
Institute for U.S. and Canadian Studies published “The U.S. – Russia Joint Threat Assessment on Nuclear Terrorism.”
The assessment analyzed the means, motives, and access of would-be nuclear terrorists, and concluded
that the threat of nuclear terrorism is urgent and real. The Washington and Seoul Nuclear Security
Summits in 2010 and 2012 established and demonstrated a consensus among political leaders from
around the world that nuclear terrorism poses a serious threat to the peace, security, and prosperity of our
planet. For any country, a terrorist attack with a nuclear device would be an immediate and catastrophic
disaster, and the negative effects would reverberate around the world far beyond the location and moment of
the detonation. Preventing a nuclear terrorist attack requires international cooperation to secure nuclear
materials, especially among those states producing nuclear materials and weapons. As the world’s two greatest nuclear powers, the United States and Russia have
the greatest experience and capabilities in securing nuclear materials and plants and, therefore, share a special responsibility to lead international efforts to prevent
terrorists from seizing such materials and plants. The depth of convergence between U.S. and Russian vital national interests on the issue of nuclear security is best
illustrated by the fact that bilateral cooperation on this issue has continued uninterrupted for more than two decades, even when relations between the two
countries occasionally became frosty, as in the aftermath of the August 2008 war in Georgia. Russia and the United States have strong incentives to forge a close
and trusting partnership to prevent nuclear terrorism and have made enormous progress in securing fissile material both at home and in partnership with other
countries. However, to meet the evolving threat posed by those individuals intent upon using nuclear weapons for terrorist purposes, the United States and Russia
need to deepen and broaden their cooperation. The 2011 “U.S. - Russia Joint Threat Assessment” offered both specific conclusions about the nature of the threat
and general observations about how it might be addressed. This report builds on that foundation and analyzes the existing framework for action, cites gaps and
deficiencies, and makes specific recommendations for improvement. “The U.S. – Russia Joint Threat Assessment on Nuclear Terrorism” (The 2011 report executive
summary): • Nuclear
terrorism is a real and urgent threat. Urgent actions are required to reduce the risk. The risk is driven by
the rise of terrorists who seek to inflict unlimited damage, many of whom have sought justification for
their plans in radical interpretations of Islam; by the spread of information about the decades-old
technology of nuclear weapons; by the increased availability of weapons-usable nuclear materials; and
by globalization, which makes it easier to move people, technologies, and materials across the world. •
Making a crude nuclear bomb would not be easy, but is potentially within the capabilities of a technically
sophisticated terrorist group, as numerous government studies have confirmed. Detonating a stolen nuclear weapon
would likely be difficult for terrorists to accomplish, if the weapon was equipped with modern technical safeguards (such as the electronic locks known as
Permissive Action Links, or PALs). Terrorists
could, however, cut open a stolen nuclear weapon and make use of its
nuclear material for a bomb of their own. • The nuclear material for a bomb is small and difficult to
detect, making it a major challenge to stop nuclear smuggling or to recover nuclear material after it has
been stolen. Hence, a primary focus in reducing the risk must be to keep nuclear material and nuclear weapons from being stolen by continually improving
their security, as agreed at the Nuclear Security Summit in Washington in April 2010. • Al-Qaeda has sought nuclear weapons for almost
two decades. The group has repeatedly attempted to purchase stolen nuclear material or nuclear
weapons, and has repeatedly attempted to recruit nuclear expertise. Al-Qaeda reportedly conducted
tests of conventional explosives for its nuclear program in the desert in Afghanistan. The group’s nuclear ambitions
continued after its dispersal following the fall of the Taliban regime in Afghanistan. Recent writings from top al-Qaeda leadership are
focused on justifying the mass slaughter of civilians, including the use of weapons of mass destruction,
and are in all likelihood intended to provide a formal religious justification for nuclear use. While there are
significant gaps in coverage of the group’s activities, al-Qaeda appears to have been frustrated thus far in acquiring a nuclear capability; it is unclear whether the the
group has acquired weapons-usable nuclear material or the expertise needed to make such material into a bomb. Furthermore, pressure from a broad range of
counter-terrorist actions probably has reduced the group’s ability to manage large, complex projects, but has not eliminated the danger. However, there
is no
sign the group has abandoned its nuclear ambitions. On the contrary, leadership statements as recently as
2008 indicate that the intention to acquire and use nuclear weapons is as strong as ever.
Terrorism causes extinction – escalates to nuclear great power war
Ayson 10 (Robert, Professor of Strategic Studies and Director of the Centre for Strategic Studies: New
Zealand – Victoria University of Wellington, “After a Terrorist Nuclear Attack: Envisaging Catalytic
Effects”, Studies in Conflict & Terrorism, 33(7), July)
A Catalytic Response: Dragging in the Major Nuclear Powers
A terrorist nuclear attack, and even the use of nuclear weapons in response by the country attacked in the first place, would not necessarily
represent the worst of the nuclear worlds imaginable. Indeed, there are reasons to wonder whether nuclear
terrorism should ever be
regarded as belonging in the category of truly existential threats. A contrast can be drawn here with the global catastrophe that
would come from a massive nuclear exchange between two or more of the sovereign states that possess these weapons in significant numbers.
Even the worst terrorism that the twenty-first century might bring would fade into insignificance alongside considerations of what a general
nuclear war would have wrought in the Cold War period. And it must be admitted that as long as the major nuclear weapons states have
hundreds and even thousands of nuclear weapons at their disposal, there is always the possibility of a truly awful nuclear exchange taking place
precipitated entirely by state possessors themselves. But
these two nuclear worlds—a non-state actor nuclear attack
and a catastrophic interstate nuclear exchange—are not necessarily separable. It is just possible that some sort of
terrorist attack, and especially an act of nuclear terrorism, could precipitate a chain of events leading to a massive
exchange of nuclear weapons between two or more of the states that possess them. In this context, today's
and tomorrow's terrorist groups might assume the place allotted during the early Cold War years to new state possessors of small nuclear
arsenals who were seen as raising the risks of a catalytic nuclear war between the superpowers started by third parties. These risks were
considered in the late 1950s and early 1960s as concerns grew about nuclear proliferation, the so-called n+1 problem. It may require a
considerable amount of imagination to depict an especially plausible situation where an act of nuclear
terrorism could lead to
such a massive inter-state nuclear war. For example, in the event of a terrorist nuclear attack on the United States, it might well
be wondered just how Russia and/or China could plausibly be brought into the picture, not least because they seem unlikely to be fingered as
the most obvious state sponsors or encouragers of terrorist groups. They would seem far too responsible to be involved in supporting that sort
of terrorist behavior that could just as easily threaten them as well. Some possibilities, however remote, do suggest themselves. For example,
how might the United States react if it was thought or discovered that the fissile material used in the act of nuclear terrorism had come from
Russian stocks,40 and if for some reason Moscow denied any responsibility for nuclear laxity? The correct attribution of that nuclear material to
a particular country might not be a case of science fiction given the observation by Michael May et al. that while the debris resulting from a
nuclear explosion would be “spread over a wide area in tiny fragments, its radioactivity makes it detectable, identifiable and collectable, and a
wealth of information can be obtained from its analysis: the efficiency of the explosion, the materials used and, most important … some
indication of where the nuclear material came from.”41 Alternatively, if the act of nuclear terrorism came as a complete surprise, and
American officials refused to believe that a terrorist group was fully responsible (or responsible at all)
suspicion would shift immediately to state possessors. Ruling out Western ally countries like the United Kingdom and
France, and probably Israel and India as well, authorities in Washington would be left with a very short list consisting of
North Korea, perhaps Iran if its program continues, and possibly Pakistan. But at what stage would Russia and China be definitely
ruled out in this high stakes game of nuclear Cluedo? In particular, if the act of nuclear terrorism occurred against a backdrop
of existing tension in Washington's relations with Russia and/or China, and at a time when threats had already been
traded between these major powers, would officials and political leaders
not be tempted to assume the worst? Of course,
the chances of this occurring would only seem to increase if the United States was already involved in some sort of limited armed conflict with
Russia and/or China, or if they were confronting each other from a distance in a proxy war, as unlikely as these developments may seem at the
present time. The reverse might well apply too: should a nuclear terrorist attack occur in Russia or China during a period of heightened tension
or even limited conflict with the United States, could Moscow and Beijing resist the pressures that might rise domestically to consider the
United States as a possible perpetrator or encourager of the attack? Washington's
early response to a terrorist nuclear
attack on its own soil might also raise the possibility of an unwanted (and nuclear aided) confrontation
with Russia and/or China. For example, in the noise and confusion during the immediate aftermath of the
terrorist nuclear attack, the U.S. president might be expected to place the country's armed forces, including its nuclear
arsenal, on a higher stage of alert. In such a tense environment, when careful planning runs up against the friction of reality, it is just
possible that Moscow and/or China might mistakenly read this as a sign of U.S. intentions to use force (and possibly nuclear force) against
them. In that situation, the temptations to preempt such actions might grow, although it must be admitted that any preemption
would probably still meet with a devastating response. As part of its initial response to the act of nuclear terrorism (as discussed earlier)
Washington might decide to order a significant conventional (or nuclear) retaliatory or disarming attack against the
leadership of the terrorist group and/or states seen to support that group. Depending on the identity and especially the location of these
targets, Russia and/or China might interpret such action as being far too close for their comfort, and potentially as an
infringement on their spheres of influence and even on their sovereignty. One far-fetched but perhaps not impossible scenario
might stem from a judgment in Washington that some of the main aiders and abetters of the terrorist action resided somewhere such as
Chechnya, perhaps in connection with what Allison claims is the “Chechen insurgents' … long-standing interest in all things nuclear.”42
American pressure on that part of the world would almost certainly raise alarms in Moscow that might require a degree of advanced
consultation from Washington that the latter found itself unable or unwilling to provide.
1AC – Iran Advantage
Advantage __ – Iran
US dependence on oil imports makes Iranian nuclearization and Iran-US war inevitable
– multiple scenarios
Glaser 11 (Charles Glaser, Professor, Elliott School of International Affairs and Dept. of Political Science Director, Elliott School Institute
for Security and Conflict Studies, The George Washington University, “International Security Implications of Energy Dependence and
Vulnerability”, Mit.edu, April 27,2011, http://web.mit.edu/ssp/seminars/wed_archives_2011Spring/glaser.html)
Mechanisms that Link Energy Dependence and Conflict I.
The first set of mechanisms focuses specifically on U.S. energy
dependence. 1. If the U.S. ability to fight a war is based on the flow of oil, then this poses a combat
vulnerability. In the Cold War when trying to prepare to fight in Europe, we did have that vulnerability. If the sea lines of communication
(SLOCs) were vulnerable, it created a security problem. Right now that is not a real danger. For now, China does not have the ability to interrupt
the flow of oil. Iran
does have ability to cut off for an specific amount of time. Maybe a story about China-Iran alliance
could claim this. This is likely far-fetched but projecting a few decades forward might make this possible, though unlikely. 2. Threats to
U.S. prosperity from energy security that are sufficiently great might require the US to fight to restore
prosperity. This may not be classified as “security threat” but it involves U.S. fighting in response. The Gulf War offers an example -- the oil
cutoff did not hurt security, only prosperity, but we fight a war for it. The threat is not greater now than it was 10-15 yrs before that. And
recently the threat is lower since 1991. This may be harder to say now with the recent Middle East uprising. The major cutoff scenario that
would pose a threat is the cutoff of Saudi oil under four possible scenarios: Saudi Arabia simply decided not to sell oil However, they are
unlikely to do this. Could they afford it? They probably could for a bit making it within range, but unlikely. The collapse of Saudi regime A year
ago many said it was unlikely and it still is, but it is perhaps more possible due to recent uprisings. This is
a real danger here. Press and Gholz identify a Saudi cutoff as large enough threat to justify the use of
force. But could the U.S. effectively intervene and restore the flow of oil if there was a clear disruption?
This is uncertain. The prospect of Saudi facilities being attacked This poses a possible source of outside disruption. Another
possible scenario is a cutoff of oil supply from the Strait of Hormuz This scenario has been examined but not with a
nuclear Iran, which would be more capable than a conventional Iran of cutting off this supply. 3. Energy-motivated alliances -Another link between energy security and U.S. prosperity stems from the alliances the U.S. creates
specifically for energy interests. Conflicts may not be over energy but energy may be the reason the U.S.
is drawn into an alliance and thus into conflict. An example of this would be bringing Georgia into NATO. The claim for NATO
expansion to Georgia is energy interests, though this may be an opportunistic rationale since there’s no strategic or inherent reason for the
relationship. However, if a Georgia-Russia conflict were to occur, it would not stem over oil but still might cause NATO to intervene to honor its
commitments. Though this may not be likely, it is a real possibility. In other words, if this became a threat to US national security or involved it
in conflict, it would be because of initial energy considerations. 4.
There is a potential mechanism linking national security
to energy security through the relationship between U.S. energy needs and terrorism. The U.S. need for
energy leads it into Middle Eastern involvement, particularly in Saudi Arabia, and in conflicts like the
Gulf war, which does generate some energy for al Qaeda in opposing the U.S. forward bases present
largely based on energy. There is a case to be made that less involvement in the Middle East results in
al-Qaeda having less interest in us. Anti-Americanism and terrorism may stem out of such energy
interests, but it is still possible to assess that, even accepting this, al-Qaeda may not pose much of a
danger. II. The second set of mechanisms deals with the influence of other states’ energy dependence on U.S. national security. 5. Alliances
entering energy conflicts -- Alliances, forged out of non-energy motives, could get entangled in conflicts over energy that would require the U.S.
coming to the defense of their allies. This possibility exists if China and Japan to get into conflict over energy resources in the East China Sea. If
this conflict occurs, the U.S. would get drawn into that conflict potentially resulting in major power conflict. This conflict over the maritime
boundary was much less intensive before it was discovered that oil and gas may be present. Thus the role of energy and increasing value
intensifies competition and the claims over boundaries and islands. 6. Security dilemma mechanism – A country with a resource dependence
that seeks to protect it with military power (e.g. China) may end up challenging other states’ and/or U.S. naval capabilities. This could spark
competition and though it does not lead to war itself, it could strain political relations and drive a military expansion, making war more likely. As
a result, China’s dependence on oil offers potential leverage as well as a source of danger for the United States. 7. Energy
dependence
reduces U.S. foreign policy leverage - If other great powers are major importers of oil, the U.S. is less able
to pressure those oil-exporting countries. The U.S. has a hard time getting China to impose sanctions on
Iran due to proliferation because of China’s imports from and investments in Iran. Nuclear proliferation
is generally bad for security, particularly with Iran, and there is a belief that energy interests/relations
inhibit our ability to crack down on this, thus resulting in a security problem. In broad terms it undercuts
our leverage. A similar pattern has emerged with Russian economic interests in Iran with regards to
nuclear reactor sales. The China Scenario (mechanism #6) is a relatively new situation: China is a relatively new importer of oil -- it was
an exporter until about 15 yrs ago. This will continue to grow in the next few decades no matter what. China’s oil imports are vulnerable to the
U.S. navy because much of its oil comes from the Persian Gulf and it has no military ability between the Persian Gulf and Strait of Malacca. It is
not a fluke that the U.S. controls the seas, but we have security and energy interests (and regional commitments) to make sure Japan and South
Korea are supplied with oil. However, both countries cannot control the SLOCs since it’s a shared space that needs to be controlled. Any
country that vulnerable would be concerned, but China is specifically worried about a conflict over Taiwan where the U.S. can coerce China by
threatening access to the sea lanes and oil. To fight to protect Taiwan, China also needs a navy that can protect its maritime access and this is a
multi-decade project. The U.S. is already concerned about the growth of the Chinese navy. This itself may not lead to conflict but it will be one
of the many things that can poison the U.S.-China relationship. The damage from this vulnerability will strain relations to make the crisis more
likely (over Taiwan) and may escalate early. This is not simply resource wars but where energy is playing a role in the background that may
make conflict more likely. A Variant of Mechanism #2 Another
potential example is Iran seeking to inhibit the U.S.
ability to access Gulf oil for prosperity reasons. The case of Iran gets more interesting if/when it acquires
nuclear weapons. Based on analysis by Caitlin Talmadge, if Iran were to close the Strait of Hormuz, we could open
it, but to open the strait, we would need to get involved in fairly extensive conventional operations on
land and sea that could escalate. Iran wouldn’t think of using nuclear weapons to close the strait but the
U.S. operations to open the strait could escalate rapidly causing their use to be more thinkable at later
stages. Iran is more likely to retaliate against U.S. coercion if/when it has nuclear weapons. Most of its
current threats are undermined by a lack of a deterrent but it becomes less vulnerable to coercion if it if
it acquires nuclear weapons and it could use them in a bargaining manner. Moreover, the most likely
danger is that the targets the U.S. is attacking to re-open the straits are land targets and command and
control nodes that, as Posen details, could lead to inadvertent escalation. Broader points/takeaways It is not clear
that U.S. insecurity has increased in the past two decades, but if it has, energy security is less a problem for the reasons people often
point to (like high energy prices) and more likely a problem for reasons like instability in the Gulf. The scenarios with
China and nuclear Iran are newer problems and these dangers do not arise out of standard resource war arguments. It is also possible that
energy self-sufficiency may abate some of the dangers. Energy
dependence may be replacing the value of territory and
the terrain of energy transport is becoming more like territory, which invokes a more traditional set of
mechanisms for conflict. China naval expansion seems to be triggering a real security dilemma, which is always exacerbated by bad
inter-state relations. We have to decide whether we want China to be vulnerable over oil. It certainly gives us leverage. But it may be more
dangerous than the value of coercion. China is buffering itself with a large petroleum reserve. The further it can push back the window of
energy coercion, the better for stability. Thus we should be encouraging China to do this.
US-Iran war goes nuclear and causes draw-in
Geoffrey Kemp, director of Regional Strategic Programs at the Center for the National Interest, and John Allen Gay, an assistant
managing editor at The National Interest, “The High Cost of War with Iran”, 3/25/2013, The National Interest,
http://nationalinterest.org/commentary/the-high-cost-war-iran-8265?page=2
President Obama stated recently that Iran could develop a nuclear bomb in over a year. As negotiations over Tehran’s nuclear program
continue to drag on with little sign of a breakthrough, the
odds increase that an armed conflict will eventually break
out. The chances are significant that the United States would either start or be sucked into this war. What
would the consequences be? What are the alternatives? Our new book War with Iran: Political, Military, and Economic Consequences can serve
as a guide to these questions. The
United States would make destroying Iran’s major nuclear facilities its primary
aim, and it would likely be successful within hours of a conflict breaking out. Iran’s known nuclear sites are heavily defended or buried in the
earth, but the U.S. arsenal contains aircraft that can penetrate the defenses and munitions that can penetrate the bunkers. Iran probably has
other, smaller nuclear sites that are not known. If these are not identified and destroyed, they can serve as the building-blocks of a
reconstructed nuclear program—or even enable an attempt at a rapid breakout. Still, there is little doubt that the United States could deal
Iran’s nuclear program a massive setback. This will not be the only front of a war, however. Iran’s leaders have threatened the West with
retaliation too frequently and too publicly to simply ignore an attack. Iran
has agents and allies that may commit acts of
terrorism. Lebanese Hezbollah’s deadly bombing of a bus full of Israeli tourists in Burgas, Bulgaria and the discovery of a similar plot in
Cyprus are examples of this capability. And assassination plots against Israeli diplomats in India, Georgia, Thailand and Kenya, as well as the
Saudi ambassador in Washington, show Iranian willingness to commit acts of terrorism as part of its strategy. Iran also has many small military
speedboats, midget submarines and antiship missiles. It may use these to attack American vessels near its shores or to disrupt the flow of oil
through the Strait of Hormuz. An
oil blockade, if successful and sustained, would send shockwaves through the global
economy, as roughly a fifth of the world’s internationally traded oil passes through the strait. But Iran’s leaders know that such a severe
step would risk a severe response, and it is unlikely that they’d be able to effectively seal Hormuz. Thus, they are more likely to launch a
sustained campaign of pinprick harassment—a missile here, a few floating mines there, spread out over hours, days and weeks. When
combined with actions by Iranian operatives in neighboring countries and possibly by Iran’s ballistic missile forces, this will create uncertainty
for any attacker—too violent to be peace, but not fully war. This state of affairs will put Iran on a more level footing with the United States, and
will challenge U.S. policy makers to come up with an appropriate response. A sustained entanglement may result. The
economic impact
of this kind of war would be negative. Regardless of how the conflict proceeds, there would be a significant spike in
oil prices; if the war is not swift and decisive, the spike could last for weeks or months. The impact of this should not be
underestimated, especially given the fragility of the global economic recovery. A $10 increase in the price per
barrel of oil would take a billion dollars from American consumers in about five days. War could see oil between $150 and $200 per barrel. High
prices would harm most states, although oil exporters outside the Persian Gulf region, like Russia
and Venezuela, could see a
windfall. The economic fallout would drive much of the war’s negative political impact. Asian nations, which
are the recipients of much Gulf oil, would be particularly unhappy. Washington’s European allies also would be divided at best.
Relations with Russia and China would suffer most. Both states are alarmed by U.S. willingness to use force to reshape the strategic
environment, and a major conflict with Iran could see the two taking steps to be an effective counterbalance. This could
include helping Iran rebuild and rearm. The unprecedented international sanctions regime against Iran would likely fall apart in the wake of a
war. Some would loosen sanctions out of frustration with the United States. Some might yield to public pressure over images of Iranian
suffering. The war’s oil-price shocks may tempt others to improve relations with oil-producing Iran. The net effect would be a reduction in Iran’s
isolation. A war thus has significant costs and dangers. Yet there is no guarantee that it would solve the Iranian nuclear threat. Iran can always
rebuild its nuclear facilities. Being attacked by a superpower might convince Tehran that nuclear weapons aren’t worth the price. Yet it might
also reinforce the case for getting a nuclear deterrent to make future attacks less likely. The strategic problem for the United States after the
war would thus be the same as it was before: getting Iran to abandon the threatening elements of its nuclear program. The United States might
not start the war. Israeli prime minister Benjamin Netanyahu has been singularly determined to bring the Iran crisis to a swift resolution. The
rest of the Israeli security establishment shares many of Netanyahu’s worries. If Israel strikes Iran on its own, and the United States is drawn in,
the U.S.-Israeli relationship will likely suffer. Polls already show fading sympathy for Israel on the American left; an unpopular war could fuel
this trend. As counterintuitive as it may seem, Iran could also start the war. Certain hardline cliques within Iran are willing to engage in
provocative actions. If a terror plot like that against the Saudi ambassador to the United States were to succeed, it would likely be seen as a
casus belli. Further, Iran’s economic isolation is a source of tension that it could seek to alleviate by provoking instability.
Needless to say, inaction has its own costs. There is not yet any indication that Iran has chosen to build a bomb, but as its nuclear program
steadily advances, detecting and stopping a rush to weaponize will become more difficult. An Iran with a nuclear weapon will be betterequipped to resist the efforts of the United States and its allies in the Middle East. There will be fewer options if relations sour. Still, Iran isn’t
likely to give atomic weapons to terrorists or launch sudden nuclear attacks—history suggests that even the most radical regimes that get the
bomb, like Mao’s China, become very wary of using it. Iran’s leaders may sponsor terror, but they are not out to commit national suicide by
provoking nuclear retaliation against their country. Perhaps the biggest concern with an Iranian bomb is that it will end the nuclear
nonproliferation regime and provoke a cascade of proliferation, not only in the Middle East but in South and East Asia, including South Korea
and Japan. This would be a significant setback for the United States, which has long made nonproliferation a center of its foreign policy. The
risk of a nuclear conflict would increase.
US dependence independently prevents leverage necessary to solve Iranian
nuclearization
John Hannah, 10-12-2012, Energy insecurity: How oil dependence undermines America's effort to
stop the Iranian bomb," Foreign Policy,
http://shadow.foreignpolicy.com/posts/2012/10/12/energy_insecurity_how_oil_dependence_undermi
nes_america_s_effort_to_stop_the_irania
Energy issues have figured prominently in Governor Romney's campaign. Achieving "North American
energy independence" has been a central pillar of the 5-point economic plan that he's been touting -including at last week's first presidential debate. A bit surprising, then, that in the governor's October
8th foreign policy speech, with its heavy emphasis on the Middle East, energy didn't even merit a
mention. Let's face it. Ensuring the free flow of oil has been the main driver of American strategy in the
Middle East for decades. Our nation's economic wellbeing depends on a well-supplied global oil market,
and countries in the Middle East account for a significant portion of the world's production. The cartel
they dominate, OPEC, today controls between 30 and 40 percent of the international market while
possessing the vast majority of the world's proven reserves. As a result, America and the global
economy are incredibly vulnerable to what happens in the region. Every U.S. recession but one since
World War II has been preceded by an oil price shock. And in the majority of cases, those shocks have
been triggered by events originating in the Middle East. Think the 1973 Arab oil embargo, the 1979
Iranian revolution, or Saddam's 1991 invasion of Kuwait. But you don't have to go back that far to
appreciate the problem we face. Last year's revolution in Libya, along with broader unrest across the
Arab world, sent oil prices skyrocketing. Ditto Iran's threats in January to blockade the Straits of Hormuz.
And concern about an eventual war with Iran continue to impose a significant risk premium on global
prices, a reality Americans confront every day at the gas pump. Even short of tipping the economy back
into recession, the effects of this kind of price volatility are highly negative: our trade deficit rises;
disposable income and consumer spending decline; and economic growth takes a significant hit.
Concerns about oil prices have often badly distorted U.S. policy toward the Middle East. The most acute
example is the effort to pressure Iran to give up its nuclear weapons ambitions. U.S. policymakers have
long known that the most effective step we could take against the mullahs is to cut off Iran's oil sales
and starve them of the enormous revenues they need to keep their repressive regime afloat. Yet for
years, first President Bush and then President Obama fiercely resisted sanctioning the Islamic Republic's
petroleum sector. The reason? Because they quite legitimately feared that removing Iranian crude from
the market would disrupt global supplies and trigger a devastating price shock. Only in late 2011, with
Iran rapidly approaching the nuclear threshold, did Congress finally steamroll the administration by
forcing through legislation that targeted Iranian oil. Even then, implementation of the sanctions was
watered down. The administration was given a six-month grace period to assess the possible impact that
sanctions would have on the global oil market. And rather than demanding that customers of Iranian oil
end their purchases entirely, countries were granted waivers from U.S. sanctions if they only
"significantly reduced" their buy -- which in practice required them to cut back between 15 and 20
percent. While the U.S. effort, together with complimentary EU sanctions, have no doubt had a major
effect on Iran's economy -- reducing its oil exports by as much as 50 percent -- a full embargo would
have been far more impactful and the obvious course of action for Washington to pursue if not for the
countervailing concern about oil markets. In the meantime, the Iranian regime continues to pocket
perhaps $3 billion per month from the million or so barrels of oil that it still exports daily, all the while
pressing ahead with its nuclear program. America doesn't have a higher national security priority than
stopping the world's most dangerous regime from going nuclear. And yet the sad reality is that our
dependence on oil has for years, and to our great peril, systematically deterred us from fully deploying
the most powerful tool in our arsenal -- all-out sanctions on Iran's petroleum sector -- for resolving the
crisis peacefully. Not surprisingly, that underlying logic applies in spades when it comes to any discussion
about the possible use of force against Iran, where predictions of oil spiking to an economy-crippling
$200 per barrel are commonplace. The fact that our oil vulnerability has put such severe constraints on
our freedom-of-maneuver to address the most pressing national security threat we face is deeply
troubling. The big question is whether we can do anything about it. Admittedly, history doesn't offer
much reason for optimism. For almost 40 years, successive U.S. presidents have promised to tackle the
problem with very little to show for it.
Iranian nuclearization causes nuclear war
Jeffrey Goldberg 12, Bloomberg View columnist and a national correspondent for the Atlantic, January
23, 2012, “How Iran Could Trigger Accidental Armageddon,” online:
http://www.bloomberg.com/news/2012-01-24/how-iran-may-trigger-accidental-armageddoncommentary-by-jeffrey-goldberg.html
The experts who study this depressing issue seem to agree that a Middle East in which Iran has four or
five nuclear weapons would be dangerously unstable and prone to warp-speed escalation. Here’s one
possible scenario for the not-so-distant future: Hezbollah, Iran’s Lebanese proxy, launches a crossborder attack into Israel, or kills a sizable number of Israeli civilians with conventional rockets. Israel
responds by invading southern Lebanon, and promises, as it has in the past, to destroy Hezbollah. Iran,
coming to the defense of its proxy, warns Israel to cease hostilities, and leaves open the question of
what it will do if Israel refuses to heed its demand. Dennis Ross, who until recently served as President
Barack Obama’s Iran point man on the National Security Council, notes Hezbollah’s political importance
to Tehran. “The only place to which the Iranian government successfully exported the revolution is to
Hezbollah in Lebanon,” Ross told me. “If it looks as if the Israelis are going to destroy Hezbollah, you can
see Iran threatening Israel, and they begin to change the readiness of their forces. This could set in
motion a chain of events that would be like ‘Guns of August’ on steroids.” Imagine that Israel detects a
mobilization of Iran’s rocket force or the sudden movement of mobile missile launchers. Does Israel
assume the Iranians are bluffing, or that they are not? And would Israel have time to figure this out? Or
imagine the opposite: Might Iran, which will have no second-strike capability for many years -- that is, no
reserve of nuclear weapons to respond with in an exchange -- feel compelled to attack Israel first,
knowing that it has no second chance? Bruce Blair, the co-founder of the nuclear disarmament group
Global Zero and an expert on nuclear strategy, told me that in a sudden crisis Iran and Israel might each
abandon traditional peacetime safeguards, making an accidental exchange more likely. “A confrontation
that brings the two nuclear-armed states to a boiling point would likely lead them to raise the launchreadiness of their forces -- mating warheads to delivery vehicles and preparing to fire on short notice,”
he said. “Missiles put on hair-trigger alert also obviously increase the danger of their launch and release
on false warning of attack -- false indications that the other side has initiated an attack.” Then comes the
problem of misinterpreted data, Blair said. “Intelligence failures in the midst of a nuclear crisis could
readily lead to a false impression that the other side has decided to attack, and induce the other side to
launch a preemptive strike.” ‘Cognitive Bias’ Blair notes that in a crisis it isn’t irrational to expect an
attack, and this expectation makes it more likely that a leader will read the worst into incomplete
intelligence. “This predisposition is a cognitive bias that increases the danger that one side will jump the
gun on the basis of incorrect information,” he said. Ross told me that Iran’s relative proximity to Israel
and the total absence of ties between the two countries -- the thought of Iran agreeing to maintain a
hot line with a country whose existence it doesn’t recognize is far-fetched -- make the situation even
more hazardous. “This is not the Cold War,” he said. “In this situation we don’t have any
communications channels. Iran and Israel have zero communications. And even in the Cold War we
nearly had a nuclear war. We were much closer than we realized.” The answer to this predicament is to
deny Iran nuclear weapons, but not through an attack on its nuclear facilities, at least not now. “The
liabilities of preemptive attack on Iran’s nuclear program vastly outweigh the benefits,” Blair said. “But
certainly Iran’s program must be stopped before it reaches fruition with a nuclear weapons delivery
capability.”
1AC – Solvency
Observation Two – Solvency
OCS has massive reserves and development happens quickly
FOF 2014, Frontiers of Freedom, May 20 2014, Educational Institute, “Towards Energy Independence “, http://www.ff.org/towardsth
energy-independence/ //RD
The final significant untapped reserve of petroleum in North America lies on the outer continental shelf
(OCS), the submerged landmass of North America that extends several hundred miles from the coastline before dropping off the continental
slope to the ocean floor. An estimated 86 billion barrels of petroleum reserves are believed to exist on the OCS,
70 billion of which are economically recoverable under current oil prices. Of these, over 63 billion (90%) lie either in the Gulf
of Mexico or off the northern coastline of Alaska. The recent expiration of restrictions on exploration in this area has
led to the discovery of several new oilfields there and raised interest amongst prospectors in the neighboring
Eastern Gulf Coast OCS zone adjacent Florida which remains off-limits by executive order until 2022 at the earliest. Plans by the Obama
administration to rescind this order and open the Eastern Gulf of Mexico for exploration and drilling
were scheduled to come into effect in 2010, but were promptly cancelled after the Deepwater Horizon
oil spill that same year. The State of Florida has similarly banned exploration and drilling for oil in its own waters, which extend about
10 miles out to sea before entering federal jurisdiction. Even if these bans were lifted, there is little information about the potential reserves
the Eastern Gulf OCS may hold. Exploratory wells dug as far back as the 1960’s yielded poor results, as did international ventures across the
Florida Strait in Cuban waters. Regardless, the American Energy Alliance (AEA) estimates that up to 3.4 billion barrels of commercially
exploitable oil may exist there, which could be tapped for production in as few as five to seven years. The
state of California also
holds large potential reserves of offshore petroleum, estimated at 6 to 7 billion barrels by the Minerals
Management Service (MMS) and over 10 billion by the AEA. As in the Eastern Gulf OCS region, exploration and leasing of
the OCS within state waters has been banned by the state government and deadlocked politically in federal waters. Production on these
sites could begin in as few as five years, and some even sooner as existing platforms (which predate the
leasing bans) could access known deposits immediately. The MMS has also estimated that as much as 19
billion barrels of proven oil reserves are located on the Alaskan OCS adjacent to the North Slope in the
Chukchi and Beaufort Seas. Shell Oil has worked for years to secure the necessary permits and approvals to explore and drill these
fields, though the process has been plagued by numerous delays. Should current targets for 2015 exploration be reached,
however, the Department of Energy (DoE) has released models for what hypothetical production of
these fields would look like. Though Arctic offshore drilling is more expensive per barrel than onshore drilling, experts remain
confident that both Arctic fields could economically produce a mean estimate of 1 million barrels per
day between them (365 million barrels per year). As with the ANWR field, this peak production number is not expected to be
attained until 20 years after the start of operations, placing it between the years 2034-2036. If production in the Gulf of Mexico
and California were of similar efficiency, an estimated 100 million barrels per year could be added to this
sum, for a total of at least 450 million barrels per year being drawn from the American OCS.
We solve even if drilling takes time – investment and perception
DC 13 (Drilling Contractor is the official magazine of the international association of drilling contractors, “Study: Development offshore US
Atlantic could add $195 billion in investment”; 12/11/2013; http://www.drillingcontractor.org/study-development-offshore-us-atlantic-couldadd-195-billion-in-investment-27151)
“Oil and natural gas production off our Atlantic coast is a potential gold mine,” API Director of Upstream and
Industry Operations Erik Milito said. “Developing oil and natural gas in the Atlantic could put hundreds of thousands of Americans to work,
make us more energy secure and bring in needed revenue for the government. But none of these benefits will appear unless the federal
government follows pro-development energy policies.” The Obama administration has been considering whether to allow seismic surveying in
the Atlantic for the last five years and shortly will begin work on the next five-year offshore leasing program. Americans stand to benefit if
seismic surveying permits are approved and the Atlantic and other offshore areas that have been kept off-limits are included in the next fiveyear leasing program. “Major
capital investments, job creation and revenue to the government would all begin
years before the first barrel goes to market,” Mr Milito said. “Expanding offshore energy production would also
send a strong signal to the energy markets that America is leading the world in developing energy
resources, which could help put downward pressure on prices.”
No link to their Environment DA’s – offshore drilling is safer than ever
Erik Milito, director of operations at American Petroleum Institute, 4-25-2014, “Offshore Drilling Is
Safer,” Forbes, http://www.forbes.com/sites/realspin/2014/04/25/offshore-drilling-is-safer/
Four years after the Deepwater Horizon oil spill in the Gulf of Mexico, we’re well into a new era of safety
for offshore energy exploration. Even before cleanup in the Gulf of Mexico was complete, the oil and natural
gas industry started working with federal regulators on a comprehensive review of offshore operations.
We in the industry clearly understand that the future of offshore drilling depends on our ability to conduct
operations safely. Federal regulators and the public should rest assured. Despite claims to the contrary, the
oil and natural gas industry and the federal government have together taken great strides to enhance
the safety of offshore operations. Four joint industry task forces have now reexamined every aspect of
offshore drilling, from equipment and operating procedures to subsea well control and oil spill response.
Working with experienced regulators from the Department of Interior, industry experts developed new
recommendations and standards for operations in both deep and shallow water exploration. One of the
most urgent needs was clearly to boost the rapid response capability for containment in case of a leak. New
collaborative containment companies established after the 2010 spill now stand ready to deploy state-of-theart containment technology at the first indication of a spill at the wellhead. Our task forces found room for
improvement in numerous other areas. The industry is now following newly established or revised standards in
areas ranging from well design and cementing to blowout prevention, subsea equipment for capping
wells, and protections for workers responding to a spill. The American Petroleum Institute maintains more than 600
industry standards covering all aspects related to production, and more than 100 have been incorporated into federal regulations. Even
before the Deepwater Horizon accident, spills were rare. Over the past decade, 99.999% of oil shipped
to the United States reached its destination without incident. More than 40,000 total wells have been drilled in the Gulf
of Mexico, and at the time of the spill, 699 wells were operating at depths of 5,000 feet or greater, while more than 3,900 were in production at
1,000 feet or more. It’s
a common and understandable misconception that deep water operations are inherently more
risky. While deep water wells present greater technical challenges in some cases, safety standards also change to reflect the
difference. As a result, working in deeper water does not equate to greater risk. Obviously, even one incident is
too many, let alone one on the scale of the 2010 crisis. That’s why the industry has also created the Center for Offshore
Safety (COS). Its mission is to work with independent third-party auditors and government regulators to
create an industry-wide culture of continuous safety improvement. The federal Bureau of Safety and
Environmental Enforcement (BSEE) has already incorporated a number of guidelines COS devised into its own
regulations. BSEE is one of three new agencies formed from the reorganization of the former Minerals Management Service in response to
the Gulf spill. In recent congressional testimony, Director Brian Salerno noted that 25 of the 33 BP Deepwater Horizon Commission
recommendations have been acted upon or are in the process of being addressed. COS
is also working on a major initiative on
prevention. The Center collects and analyzes data to better detect potential problems before they occur.
The prevention protocol includes a “blind source” reporting system, which allows companies to provide data without incurring
punitive action, enabling us to learn more and faster.
Inherency
Yes US Oil Dependence
Oil dependence is bad and is high now
Greene et al 13(David L. Greene Corporate Fellow, Oak Ridge National Laboratory Senior Fellow, Howard H. Baker Jr. Center for Public
Policy, University of Tennessee Roderick S. Lee George Washington University Janet L. Hopson Research Associate Professor, Department of
Earth and Planetary Sciences University of Tennessee, “OPEC and the Costs to the U.S. Economy of Oil Dependence 1970-2010, The Howard H.
Baker Jr. Center for Public Policy combined study, February 15, 2013, http://bakercenter.utk.edu/wpcontent/uploads/2013/02/OilDependenceCosts2010-New-Cover021413.pdf)
Since the 1970s, oil dependence has been recognized as an important national security and economic
problem for the United States (Deutch, Schlesinger and Victor 2006). To a great extent, although not entirely, the
national security issues associated with oil dependence are a consequence of its potential damage to
the U.S. economy. To inform decisions about national energy policy it is therefore important to measure those costs. In 1993
researchers at Oak Ridge National Laboratory began retrospectively estimating the direct economic costs of oil
dependence (Greene and Leiby 1993). In 2006, following a methodology proposed by the National Research Council’s (NRC’s) Committee
on Prospective Benefits of the Department of Energy’s Energy Efficiency and Fossil Energy R&D Programs (NRC 2005), the researchers
formalized and refined the methodology for retrospective and prospective cost estimation in the Oil Security Metrics Model (OSMM) (Greene
and Leiby 2006). The
model has since been used not only to estimate past costs but to analyze the potential
effectiveness of policies on likely future costs (Greene 2010). Past estimates showed that oil dependence
costs reached a peak of about $350 billion in 1980 and 1981. This study indicates that oil dependence costs
reached that level in 2007, soared to approximately $500 billion in 2008, fell back to just over $300 billion in 2009 and
remained at that level in 2010. However, U.S. gross domestic product (GDP) today is more than twice what it was in 1980. Relative to
GDP, oil dependence costs in 2008 were 3.5%; in 1980 oil dependence costs relative to GDP came to 4.5%. The cumulative,
direct costs of oil dependence to the U.S. economy from 2005 to 2010 are estimated to have totaled
approximately $2.1 trillion. Monte Carlo simulations reflecting uncertainties in key parameters produced ranges including 90% of the
simulation estimates of $429 billion to $602 billion with a mean value of $508 billion for oil dependence costs in 2008 and from $268 billion to
$339 billion with a mean of $302 billion for 2010. The uncertainty interval increases with increasing estimated costs. The 5th percentile to 95th
percentile range for total costs from 2005 to 2010 is $1.8 trillion to $2.5 trillion.
Oil dependence is high now and is bad, multiple empirics prove
Hannah 12(John Hannah, a senior fellow at the Foundation for Defense of Democracies and contributor for FP’s shadow government,
“Energy insecurity: How Oil Dependence undermines America’s effort to stop the Iranian bomb”, Foreign Policy Shadow Government blog,
October 12, 2012,
http://shadow.foreignpolicy.com/posts/2012/10/12/energy_insecurity_how_oil_dependence_undermines_america_s_effort_to_stop_the_ira
nia)
Energy issues have figured prominently in Governor Romney's campaign. Achieving
"North American energy independence"
has been a central pillar of the 5-point economic plan that he's been touting -- including at last week's first presidential debate. A bit
surprising, then, that in the governor's October 8th foreign policy speech, with its heavy emphasis on the Middle East, energy didn't even merit
a mention. Let's
face it. Ensuring the free flow of oil has been the main driver of American strategy in the
Middle East for decades. Our nation's economic wellbeing depends on a well-supplied global oil market,
and countries in the Middle East account for a significant portion of the world's production. The cartel they
dominate, OPEC, today controls between 30 and 40 percent of the international market while possessing the
vast majority of the world's proven reserves. As a result, America and the global economy are incredibly
vulnerable to what happens in the region. Every U.S. recession but one since World War II has been
preceded by an oil price shock. And in the majority of cases, those shocks have been triggered by events
originating in the Middle East. Think the 1973 Arab oil embargo, the 1979 Iranian revolution, or
Saddam's 1991 invasion of Kuwait. But you don't have to go back that far to appreciate the problem we
face. Last year's revolution in Libya, along with broader unrest across the Arab world, sent oil prices
skyrocketing. Ditto Iran's threats in January to blockade the Straits of Hormuz. And concern about an
eventual war with Iran continue to impose a significant risk premium on global prices, a reality
Americans confront every day at the gas pump. Even short of tipping the economy back into recession,
the effects of this kind of price volatility are highly negative: our trade deficit rises; disposable income
and consumer spending decline; and economic growth takes a significant hit.
US Oil dependence high now
Weiss and Lefton 12(Rebecca Lefton and Daniel J. Weiss, Rebecca Lefton is a Policy Analyst with the Energy team at American
Progress; Daniel J. Weiss is a Senior Fellow and the Director of Climate Strategy at American Progress, “Foreign Oil Dependence Threatens US
Economic and National Security”, American Progress Organization, September 13, 2012,
http://www.gale.cengage.com/pdf/samples/SP_9780737761771.pdf)
The United States relies heavily on fossil fuels for its energy needs, tying the country’s future economic
security to oil imports. This is problematic for a variety of reasons. The United States currently imports
oil from a number of unstable nations, potentially helping to finance terrorism. Also, American oil
consumption contributes to global warming. By creating extremes in climate changes, global warming is
responsible for multiple environmental crises. These crises arc expensive and often require increasingly
scarce military resources. Even as US oil consumption creates a more dangerous world, the oil industry lobbies
against change: importing oil is extremely profitable to the oil industry. In the long run, however, clean energy technology has the potential to
create more jobs and bolster a sagging US economy. A
recent report on the November 2009 U.S. trade deficit found
that rising oil imports widened our deficit, increasing the gap between our imports and exports. This is
but one example that our economic recovery and long-term growth is inexorably linked to our reliance
on foreign oil. The United States is spending approximately 1 billion a day overseas on oil instead of investing
the funds at home, where our economy sorely needs it. Burning oil that exacerbates global warming also poses
serious threats to our national security and the world’s security. For these reasons we need to kick the oil addiction by
investing in clean-energy reform to reduce oil demand, while taking steps to curb global warming. In 2008 the United States imported oil from
10 countries currently on the State Department’s Travel Warning List, which lists countries that have “long-term, protracted conditions that
make a country dangerous or unstable.” These nations include Algeria, Chad, Colombia, the Democratic Republic of the Congo, Iraq, Mauritania,
Nigeria, Pakistan, Saudi Arabia, and Syria. Our reliance on oil from these countries could have serious implications for our national security,
economy, and environment.
US Oil dependence has gone up 14% since the 70’s and is still on the rise now
EESI 13(Environmental and Energy Study Institute, energy study institute, “Oil Dependence Dilemma: Can’t Live With It; Can’t Live Without
It – Or Can We?”, EESI, October 18, 2013, http://www.eesi.org/articles/view/oil-dependence-dilemma-cant-live-with-it-cant-live-without-it-orcan-we)
Can’t live with it. Petroleum
dependence has wreaked havoc on the U.S. economy, energy security, trade
deficit, public health, and the environment. Since 1973, the economy has been on a roller coaster. Global oil prices
have spiked, plummeted and spiked again due to actions by cartels, wars and threats of wars, overseas
civil unrest and labor strikes, hurricanes, speculation, tight supplies, and steadily rising global demand
(see this EIA graph of oil prices and events 1970-2000) . High prices and price volatility are still here and are not
expected to go away any time soon. Today’s retail gasoline prices are as high in real terms as they were
in the early 1980s when the Iran-Iraq war threatened oil supplies in the Persian Gulf (see this EIA graph of
inflation-adjusted prices for various petroleum-based fuels, 1976-2013) . In terms of public health, the EPA estimates that
mobile sources burning petroleum-based fuels accounted for "47 percent of outdoor toxic emissions, 50
percent of the cancer risk, and over 80 percent of the non-cancer hazard. Benzene is the largest contributor to
cancer risk of all . . . and mobile sources were responsible for 59 percent of benzene emissions in 2002." Public health threats remain the
greatest in urban areas near transportation corridors. With respect to climate change, the
United States emitted 2.3 billion
metric tons of carbon dioxide from petroleum in 2012, 43 percent of total U.S. carbon dioxide emissions
from all energy sources. The United States now emits more carbon dioxide from petroleum than from
coal or natural gas. The environmental and climate change costs of oil dependence will only grow in the
decades ahead if current trends continue. Conventional oil reserves are declining. Enhanced oil recovery
technologies will help extract additional oil from those reserves, but this will require more climatepolluting energy and resource inputs. The United States has large, undeveloped unconventional sources of oil, such as oil shale or
oil sand deposits. But these will require large amounts of energy to develop, as well as water resources (which are already under stress across
many parts of the country). Development can inflict large scale damage across landscapes and ecosystems. And
the quality of the oil
produced is often poor, requiring more energy to refine. Other new sources of oil are in remote locations (e.g. off shore, in
the Arctic, or in the deep sea). In short, the environmental risks, energy intensity, and GHG-intensity of developing new petroleum resources
will only increase over time. Consider the horrendous effects of the recent Deep Water Horizon disaster in the Gulf of Mexico and the recent oil
pipeline ruptures in North Dakota, Arkansas, and Michigan. Environmental concerns about fracking and oil sands production remain
unresolved. Can’t live without it. Clearly,
ending the U.S. addiction to oil is no easy challenge. Oil is in many ways
an ideal energy source – high energy density, transportable, perfect for long distance transportation.
Through most of the 20th century, it was also abundant and cheap. It fueled the rapid rise of the United
States as a global power, as well as the nation’s high material standard of living. We became hooked.
Today, the United States is consuming 14 percent more petroleum than in 1975 . The transportation
sector accounts for 71 percent of petroleum demand, and 93 percent of the transportation sector runs
on petroleum. Thus, car commuters, freight haulers, airlines, businesses that rely on shipping, and - the
largest oil consumer of all - the Department of Defense, remain the most vulnerable to oil supply
disruptions and price spikes.
US Oil dependence is high enough to keep US econ vulnerable
Koch 13(Wendy Koch, USATODAY reporter for energy and climate, “U.S. oil supply looks vulnerable 40 years after embargo”, USATODAY,
October 19, 2013, http://www.usatoday.com/story/news/nation/2013/10/19/us-oil-imports-opec-embargo/2997499/)
Henry Kissinger, who was President Nixon's secretary of State during the 1973 oil crisis, agrees. "We're better prepared
now, by far," he told an energy conference last week in Washington, D.C. If Saudi Arabia cut its production and
exports, he said the U.S. could buy elsewhere, adding: "They've lost the opportunity to blackmail us." Yet not all has changed. "We
remain very vulnerable," Panetta says, adding it wouldn't take much for members of the Organization of Petroleum
Exporting Countries (OPEC) — which launched the 1973 embargo — or terrorist groups like al-Qaeda to disrupt supplies.
He says the U.S. is using less oil per capita than decades ago and relying on the Middle East for a smaller
share of its imports, but those shifts almost don't matter. World oil prices, which largely determine what Americans pay at
the pump, remain high, because developing countries including China and India are driving up demand. With global oil supplies so
tight as a result, even a small disruption rattles the markets and causes price spikes. That's why, despite
a 50% increase in U.S. oil production since 2008, the price for a regular gallon of gas remains so high. It
costs, in inflation-adjusted dollars, twice as much as 40 years ago. "We're still part of a global oil
market," says Daniel Yergin oil historian and author of The Quest: Energy Security and the Remaking of the Modern World. He
notes petroleum imports have fallen since their peak in 2005, when they accounted for 60% of what
Americans used. But they've simply retreated to the same share of consumption as in 1973. The
Department of Energy expects imports will continue to fall as U.S. oil production increases because of
fracking. This controversial drilling process blasts huge quantities of water, mixed with sand and
chemicals, underground to break apart shale formations and release oil as well as natural gas. "We won't
become energy independent, but we'll become less energy dependent," Yergin says. That's not enough to
inoculate the U.S. from future oil shocks. "Despite the domestic oil boom, America's oil security is only
middle-of-the-road," Robbie Diamond of Securing America's Future Energy (SAFE), a non-partisan group aimed at reducing U.S.
dependency, said this month in releasing a ranking of 13 countries' oil security. The United States ranked fifth best, after Japan (No. 1), United
Kingdom, Canada and Germany.
US Oil dependence on Saudi Arabia is increasing now
Krauss 12(CLIFFORD KRAUSS, national business correspondent based in Houston, covering energy for NYT, “U.S. Reliance on Oil From
Saudi Arabia Is Growing Again”, NYT, August 16, 2012, http://www.nytimes.com/2012/08/17/business/energy-environment/us-reliance-onsaudi-oil-is-growing-again.html?pagewanted=1&_r=1&seid=auto&smid=tw-nytimesworld)
The United States is increasing its dependence on oil from Saudi Arabia, raising its imports from the
kingdom by more than 20 percent this year, even as fears of military conflict in the tinderbox Persian
Gulf region grow. The increase in Saudi oil exports to the United States began slowly last summer and
has picked up pace this year. Until then, the United States had decreased its dependence on foreign oil and from the Gulf in
particular. This reversal is driven in part by the battle over Iran’s nuclear program. The United States
tightened sanctions that hampered Iran’s ability to sell crude, the lifeline of its troubled economy, and
Saudi Arabia agreed to increase production to help guarantee that the price did not skyrocket. While
prices have remained relatively stable, and Tehran’s treasury has been squeezed, the United States is
left increasingly vulnerable to a region in turmoil. The jump in Saudi oil production has been welcomed by Washington and
European governments, but Saudi society faces its own challenges, with the recent deaths of senior members of the royal family and sectarian
strife in the eastern part of the country, making the stability of Saudi energy and political policies uncertain. The United States has had a
political alliance with the Saudi leadership that has lasted for decades, one that has become even more pivotal to Washington during the
turmoil of the Arab spring and rising hostilities with Iran over that nation’s nuclear program. (Saudi Arabia and Iran are bitter regional rivals.)
The development underscores how difficult it is for the United States to lower its dependence on foreign
oil — especially the heavy grades of crude that Saudi Arabia exports — even as domestic oil production
is soaring. It is a development that has alarmed conservative and liberal foreign policy experts alike,
especially with oil prices and Mideast tensions rising in recent weeks. “At a time when there is a rising
chance of either a nuclear Iran or an Israeli strike on Iran’s nuclear facilities, we should be trying to
reduce our reliance on oil going through the Strait of Hormuz and not increasing it,” said Michael Makovsky, a
former Defense Department official who worked on Middle East issues in the George W. Bush administration. Senior Iranian officials have
repeatedly threatened to close the Strait of Hormuz, the narrow neck through which most Gulf oil is shipped, and the Iranian navy has held
maneuvers to back up the threats. Most analysts say it is doubtful the Iranians would take such an extreme measure because that would block
exports vital to the country’s economy, but the United States Navy has been preparing for such a contingency. Many
oil experts say
that the increasing dependency is probably going to last only a couple of years, or until more Canadian
and Gulf of Mexico production comes on line.
Yes Offshore Moratorium
Obama has a de-facto moratorium on new offshore drilling now
Doc Hastings, Chair of House NR Comm., 6-20-2014, “EIA: Sales of Energy From Federal Lands Down
7% Last Year,” naturalresources.house.gov/news/documentsingle.aspx?DocumentID=385312
According to new numbers released today by the U.S. Energy Information Administration (EIA), total
sales of fossil fuels from energy production on federal and Indian lands decreased by 7 percent last year.
This is latest example of how the Obama Administration continues to block American energy production
on federal lands and waters. “American families cannot afford four-dollar gasoline prices, but instead of
increasing access to our own energy resources right here at home, President Obama is placing them offlimits. The Obama Administration is restricting American energy production wherever and whenever
possible and these new numbers from EIA are further proof of that. President Obama has imposed a
defacto drilling moratorium on new offshore drilling, canceled both onshore and offshore lease sales,
and imposed layer upon layer of red-tape to make it harder to develop our energy resources,” said
House Natural Resources Committee Chairman Hastings. “In order to create an America that works, we
need access to affordable and reliable energy. That’s why next week the House will consider H.R. 4899,
the Lowering Gasoline Prices to Fuel an America that Works Act. This common sense legislation will
remove Obama Administration’s roadblocks to American energy production on federal lands and say
‘YES’ to over a million more American jobs, lower gasoline prices, and American energy security.”
85% of the OCS is still off limits
Doc Hastings, chair of House NR Comm., 2014, "Increasing American Energy Production Will Lower
Gasoline Prices, Create More Jobs," House Committee on Natural Resources,
http://naturalresources.house.gov/gasprices/
Increase Offshore Production. President Obama has placed the entire Pacific Coast, Atlantic Coast and
the Eastern Gulf off-limits to future energy production – as it was before Congress lifted the moratorium
in 2008. A good portion of Alaska’s Outer Continental Shelf is also being kept under lock-and-key. In fact,
the President's proposed five-year lease plan keeps 85% of our offshore areas under lock-and-key.
According to the American Energy Alliance, expanding drilling in the OCS could create 1.2 million jobs
annually across the country and generate $8 trillion in economic output.
85% of the OCS is off limits
Pete Sessions, Rep TX, GOP, 6-28-2013, "Offshore Energy and Jobs Act of 2013 Passes the House,"
Texas GOP Vote, http://www.texasgopvote.com/issues/stop-big-government/offshore-energy-and-jobsact-2013-passes-house-005618
This week, House Republicans advanced a part of our all-of-the-above energy plan to help create jobs
and boost our nation’s energy security. The Offshore Energy and Jobs Act of 2013 (H.R. 2231), which
passed the House today, would increase energy production by unlocking our nation’s most resource-rich
offshore areas. As you may know, the Obama Administration has imposed a defacto offshore drilling ban
by putting potential resources off-limits to drilling and oil development. H.R. 2231 responds to the
President’s policies that reduce domestic energy production by requiring that the Administration
implement a new five-year leasing plan in areas containing the most promising oil and natural gas
resources. President Obama’s restrictive drilling policies – which lock up 85% of our offshore areas –
cost Americans much-needed jobs, forfeit revenue that would pay down our skyrocketing debt, and
deny access to domestic resources that would lessen our dependence on foreign oil. With the current
average price for a gallon of regular gasoline above $3.50, I believe the federal government should be
doing everything that it can to help drive down energy prices and increase domestic production of oil
and gas.
Defacto offshore drilling moratorium now
Michael Bastasch, Daily Caller, 6-24-2014, “Three-Fourths of Fossil Fuel Production Loss On Federal
Lands Under Obama,” http://dailycaller.com/2014/06/24/three-fourths-of-fossil-fuel-production-losson-federal-lands-under-obama/
Since 2003, production of coal, gas and oil on federal lands has fallen by 21 percent, according to
government data. But nearly three-quarters of that declined occurred since 2009 — under the watch of
the Obama administration. The Energy Information Administration reported last week that total fossil
fuel energy production on federal lands declined for the third year in a row, despite a slight uptick in
onshore oil production last year. Federal lands fossil fuel production declined 21 percent from 2003 to
2013, reports EIA, mainly due to “a steady decline in federal offshore natural gas production between FY
2003 and FY 2013 and the 9% drop in coal production from federal lands in FY 2013 from FY 2012.” But
15.5 percent of the 21 percent decline has occurred since 2009, when President Obama took office. This
means that nearly three-quarters of the decline in fossil fuel production on federal lands has occurred
under Obama’s watch. Oil production on federal lands did actually increase slightly last year, but falling
coal and natural gas production meant that government-controlled lands saw a 7 percent decrease in
fossil fuels production. This was also accompanied by a 7 percent decrease in the sales of fossil fuels
from federal and Indian lands. Republicans have hammered the president for blocking off large areas of
federal lands and offshore areas to energy development such as oil and gas drilling. Reports of
decreasing sales and production numbers on federal lands only served to intensify Republican criticisms
of the administration’s energy policy. “American families cannot afford four-dollar gasoline prices, but
instead of increasing access to our own energy resources right here at home, President Obama is placing
them off-limits,” Washington Republican Rep. Doc Hastings said in a statement. “The Obama
Administration is restricting American energy production wherever and whenever possible and these
new numbers from EIA are further proof of that,” Hastings added. “President Obama has imposed a
defacto drilling moratorium on new offshore drilling, canceled both onshore and offshore lease sales,
and imposed layer upon layer of red-tape to make it harder to develop our energy resources.”
Still lots of areas off limits to drilling – next 5 year plan is key
Jennifer A. Dlouhy, 6-26-2014, "House votes to expand offshore drilling," Fuel Fix,
http://fuelfix.com/blog/2014/06/26/house-votes-to-expand-offshore-drilling/
But bill backers are hoping it will send a strong signal to the Obama administration that it should give oil
and gas companies a chance to drill in Atlantic waters as it writes a five-year plan governing the activity
from 2017 to 2022. Those areas are off limits under the current schedule for selling offshore oil and gas
leases, which expires in August 2017, but industry leaders and their Capitol Hill supporters want them to
be up for grabs in the 2017-2022 plan that Interior Department officials have just started assembling.
“There needs to be a new plan, as outlined in this bill on the floor, that opens new areas and helps put
more than a million Americans back to work,” said Rep. Doc Hastings, R-Wash., the bill sponsor.
SQ Drilling Doesn’t Solve
Expanded drilling is key to reduce dependence – current plans don’t go far enough
Meg Handley, 2-8-2013, "New Offshore Leases in U.S. Could Yield 1B Barrels of Oil ," US News &
World Report, http://www.usnews.com/news/articles/2013/02/08/new-offshore-leases-in-us-couldyield-1b-barrels-of-oil
But while the plan is an encouraging step toward opening up more federal lands for oil and gas
developers and easing supply pressures, some critics say the administration isn't going far enough. "The
Department of Interior's five-year leasing plan remains a disappointment because it fails to unlock
resources off the Atlantic and Pacific coasts, as well in the Eastern Gulf of Mexico and off parts of
Alaska's coast," says Nick Loris, an energy policy analyst at the conservative Heritage Foundation think
tank. "Doing so would generate hundreds of thousands of jobs, generate hundreds of billions of dollars
for our cash-strapped government and lower prices at the pump."
Shale Unsustainable
US shale reserves are substantially overestimated
Penn Energy, 1-26-2013, “U.S. shale gas reserve estimates plummet,”
http://www.pennenergy.com/articles/pennenergy/2012/01/u-s--shale-gas-reserve.html
The latest estimates of shale natural gas reserves in the U.S. represent a shocking step backward for the
rapidly growing industry, according to Bloomberg. The projections released by the U.S. Department of
Energy estimate that the country holds around 482 trillion cubic feet of recoverable natural gas from
shale basins. That represents a 42 percent decline from the year before when estimates of shale gas
reserves were placed at around 827 trillion cubic feet. The declines stemmed from more detailed
information available because of the dramatic uptick in natural gas exploration in shale deposits over
the past year. Probably the most substantial impact of the updated estimates, however, was the 66
percent reduction in recoverable reserves in the Marcellus shale formation in Pennsylvania, New York,
Ohio and West Virginia. Last year that basin was estimated to hold 410 trillion cubic feet of gas, enough
to fill U.S. gas demand for 17 years at 2010 level. Now that number has been reduced to 141 trillion
cubic feet, or around 6 years.
Shale reserves are overestimated and well productivity is already declining
Chris Nelder, energy analyst, 12-29-2011, "Is There Really 100 Years’ Worth of Natural Gas Beneath
the United States?," Slate Magazine,
http://www.slate.com/articles/health_and_science/future_tense/2011/12/is_there_really_100_years_
worth_of_natural_gas_beneath_the_united_states_.html
The truly devilish details of supply forecasts, however, rest in the production models of shale-gas
operators. Arthur Berman, a Houston-based petroleum geologist and energy sector consultant, along
with petroleum engineer Lynn Pittinger, has long been skeptical of the claims about shale gas. Their
detailed, independent work on the economics of shale-gas production suggests that not only are the
reserves claims overstated, but that the productivity of the wells is, too. The problems begin with the
historical production data, which is limited. The Barnett Shale in Texas is the only shale formation, or
"play," with a significant history. The first vertical well was drilled in 1982, but it wasn't until the advent
of horizontal drilling in 2003 that production really took off. By horizontally drilling and then "fracking"
the rock with a pressurized slurry of water, chemicals, and "proppants" (particulates that hold open the
fractures), operators kicked off the shale-gas revolution. Drilling exploded in the Barnett from about
3,000 wells in 2003 to more than 9,000 today. Thus we have a reasonably good data set for the Barnett.
Data from the Fayetteville Shale in Arkansas are also reasonably substantial, dating back to 2004 and
including roughly 4,000 wells. The data on the Haynesville Shale in Louisiana are minimal, dating to late
2007 and including fewer than 2,000 wells. The historical data for the rest of the major shale-gas plays—
the Marcellus, Eagle Ford, Bakken, and Woodford—along with a handful of other smaller plays, are too
recent and sparse to permit accurate modeling of their production profiles. After mathematically
modeling the actual production of thousands of wells in the Barnett, Fayetteville, and Haynesville
Shales, Berman found that operators had significantly exaggerated their claims. Reserves appear to be
overstated by more than 100 percent Typically, the core 10 to 15 percent of a shale formation’s gas is
commercially viable. The rest may or may not be—we don’t know at this point. Yet the industry has
calculated the potentially recoverable gas as if 100 percent of the plays were equally productive. The
claimed lifetime productivity, or estimated ultimate recovery, of individual wells was also overstated,
Berman found. The production decline curves modeled by well operators predict that production will fall
steeply at first, followed by a long, flattened tail of production. Berman's analysis found a better fit with
a model in which production falls steeply for the first 10 to 15 months, followed by an more weakly
hyperbolic decline. Shale-gas wells typically pay out over one-half their total lifetime production in the
first year. So operators must keep drilling continuously to maintain a flat rate of overall production.
Berman concludes that the average lifetime of a Barnett well might be as little as 12 years, instead of
the 50 years claimed by operators, and the estimated ultimate recovery from individual wells might be
one-half what is claimed. We will only know which models are correct after another five to 10 years for
the Barnett, and more than a decade for the newer plays. Other issues Berman identified include
artificially inflating the average well productivity numbers by dropping played-out wells from their
calculations; improperly including production data from restimulated wells as if it owed to the initial
well completions; and intermixing data from older and newer wells without aligning the data by vintage,
giving the impression of significantly higher-than-actual production overall. Multiplying the error,
operators seem to have applied their overly optimistic models of these older shale plays to newer plays,
which may have radically different geological characteristics and might not be nearly as productive. For
example, the lifetime output of Barnett wells may never be matched by wells in the Marcellus. The EIA
makes reference to all of these issues in its assessment of the prospects for shale gas, noting that “there
is a high degree of uncertainty around the projection, starting with the estimated size of the technically
recoverable shale gas resource,” and that “the estimates embody many assumptions that might prove
to be untrue in the long term.” Yet none of these issues are properly accounted for in the official
financial statements of the operators. An example of how inflated initial resource claims can be, and
how they can be sharply cut, presented itself in August with a new assessment of the Marcellus shale by
the U.S. Geological Survey. It offered a range of estimates, from 43 tcf at 95 percent probability, to 84
tcf at 50 percent probability, to 114 tcf at 5 percent probability. (Not surprisingly, the 95 percent
probable estimates have proven historically to be closest to the mark.) Only five months earlier, the EIA
speculated in its Annual Energy Outlook 2011 that the Marcellus might have an "estimated technically
recoverable resource base of about 400 trillion cubic feet." The USGS reassessment had slashed the
estimate for the Marcellus by 80 percent. Similar adjustments may be ahead for other shale plays.
Shale gas can’t solve – limited supply
Matthew L. Wald ’13, energy journalist for 30 years, 11-12-13, NYT, “Shale’s Effect on Oil Supply Is
Forecast to Be Brief”, http://www.nytimes.com/2013/11/13/business/energy-environment/shaleseffect-on-oil-supply-is-not-expected-to-last.html
The boom in oil from shale formations in recent years has generated a lot of discussion that the United
States could eventually return to energy self-sufficiency, but according to a report released Tuesday by
the International Energy Agency, production of such oil in the United States and worldwide will provide
only a temporary respite from reliance on the Middle East. The agency’s annual World Energy Outlook,
released in London, said the world oil picture was being remade by oil from shale, known as light tight
oil, along with new sources like Canadian oil sands, deepwater production off Brazil and the liquids that
are produced with new supplies of natural gas. “But, by the mid-2020s, non-OPEC production starts to
fall back and countries from the Middle East provide most of the increase in global supply,” the report
said. A high market price for oil will help stimulate drilling for light tight oil, the report said, but the
resource is finite, and the low-cost suppliers are in the Middle East. “There is a huge growth in light tight
oil, that it will peak around 2020, and then it will plateau,” said Maria van der Hoeven, executive
director of the International Energy Agency. The agency was founded in response to the Arab oil
embargo of 1973-74, by oil-importing nations. The agency’s assessment of world supplies is consistent
with an estimate by the United States Energy Department’s Energy Information Administration, which
forecasts higher levels of American oil production from shale to continue until the late teens, and then
slow rapidly. “We expect the Middle East will come back and be a very important producer and exporter
of oil, just because there are huge resources of low-cost light oil,” Ms. van der Hoeven said. “Light tight
oil is not low-cost oil.”
Economy Advantage
Yes Oil Shocks – General
Timeframe is next year - causes economic collapse
Dr Nafeez Ahmed 14, executive director of the Institute for Policy Research & Development, 3/28/14,
The Guardian, “Ex govt adviser: "global market shock" from "oil crash" could hit in 2015”,
http://www.theguardian.com/environment/earth-insight/2014/mar/28/global-market-shock-oil-crash2015-peak
In a new book, former oil
geologist and government adviser on renewable energy, Dr. Jeremy Leggett, identifies five
"global systemic risks directly connected to energy" which, he says, together "threaten capital markets and hence
the global economy" in a way that could trigger a global crash sometime between 2015 and 2020.
According to Leggett, a wide range of experts and insiders "from diverse sectors spanning academia, industry, the military and the
oil industry itself, including until recently the International Energy Agency or, at least, key individuals or factions therein" are expecting an
oil crunch "within a few years," most likely "within a window from 2015 to 2020." Interconnected risks Despite its
serious tone, The Energy of Nations: Risk Blindness and the Road to Renaissance, published by the reputable academic publisher Routledge,
makes a compelling and ultimately hopeful case for the prospects of transitioning to a clean energy system in tandem with a new form of
sustainable prosperity. The five risks he highlights cut across oil depletion, carbon emissions, carbon assets, shale gas, and the financial sector:
"A
market shock involving any one these would be capable of triggering a tsunami of economic and social
problems, and, of course, there is no law of economics that says only one can hit at one time." At the heart of these risks, Leggett
argues, is our dependence on increasingly expensive fossil fuel resources. His wide-ranging analysis pinpoints the
possibility of a global oil supply crunch as early as 2015. "Growing numbers of people in and around the oil industry", he says,
privately consider such a forecast to be plausible. "If we are correct, and nothing is done to soften the landing, the twenty-first century is
almost certainly heading for an early depression." Leggett also highlights the risk of parallel developments in the financial sector: "Growing
numbers of financial experts are warning that failure to rein in the financial sector in the aftermath of the financial crash of 2008 makes a
second crash almost inevitable." A frequent Guardian contributor, Leggett has had a varied career spanning multiple disciplines. A geologist and
former oil industry consultant for over a decade whose research on shale was funded by BP and Shell, he joined Greenpeace International in
1989 over concerns about climate change. As the organisation's science director he edited a landmark climate change report published by
Oxford University Press.
Oil shocks likely- 9 reasons
Securing America’s Future Energy, No Date, this site is a .org, “Oil Dependence: A Threat to U.S.
Economic & National Security,” http://www.secureenergy.org/sites/default/files/155_BriefingOilDependence.pdf
Numerous plausible events could interrupt global oil supplies and send prices sharply higher,
threatening the stability of the global economy: > Saudi Arabia is rife with terrorist threats and political
tensions. Though the Kingdom has improved the security of its energy infrastructure since a wave of violence that began in May 2003, great
concern remains. Two-thirds of Saudi oil output is processed in one huge facility (Abqaiq), the vast majority of Saudi exports are shipped from
one of three terminals (Ras Tanura, Ras al-Ju’aymah, and Yanbu), and more than 50% of reserves are held in just eight fields, including the
super giant Ghawar field, the larg- est in the world, which accounts for about 50% of Saudi Arabia’s total oil production capacity.12 > Iran, the
world’s fourth largest oil producer and exporter, has
threatened to use the “oil weapon” to retaliate again action
taken in response to its nuclear program. > Nigeria is the site of ongoing civil conflict. In March of 2003, oil
companies removed staff and sus- pended production in the Niger Delta, shutting in 10-20% of the country’s production. In September of 2005,
Chevron temporarily shut down a pumping station and Shell evacuated personnel due to threats from local militia. >
In Iraq, oil facilities
are a favorite target of the insurgency. There is also fear that violence could spill over into neighboring countries. >
Venezuela’s president frequently threatens to “cut off the oil,” and draws attention to the likely economic consequences for the U.S. In late-2002 and early-2003, labor strikes and general unrest reduced Venezuela’s output by more
than 60 percent. Al Qaeda calls oil “the artery of the life of the crusader nation” and is actively targeting the vast and vulnerable oil
supply chain. > In Russia, the world’s second largest producer and exporter, uncertainty remains in the wake of the Yukos
affair and other recentralization efforts. > FSU
states are the site of frequent instability (e.g. revolutions in Georgia, Ukraine,
Uzbekistan), ethnic conflict, and rampant corruption. > The precarious balance between supply and demand will continue to strain
the system and infrastruc- ture will always be vulnerable to natural disasters. Indeed, hurricanes were responsible for the
single largest losses of energy output in 2004 (Ivan) and 2005 (Katrina).
US still vulnerable to oil shocks-experts
Ed Crooks 14, US Industry and Energy Editor at the Financial Times, 1/15/14, “US still vulnerable to oil
shocks, say generals”, Financial Times, http://www.ft.com/cms/s/0/357b3edc-7e08-11e3-b40900144feabdc0.html#axzz35gLmtPR2
However, the 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. Admiral Blair said: “We don’t know exactly what type of problems will emerge.
But taking a chance on there always being adequate supplies is a foolhardy bet on the nation’s energy future.” The most serious potential
threat the commission identifies is disruption in Saudi Arabia, still the world’s largest oil producer, possibly associated with the
succession to King Abdullah, but there are many other potential risks to global supplies, including worsening
violence in Iraq, or a confrontation with Iran over its nuclear programme.
Yes Oil Shocks – ME Instability
Middle East Tensions, Ukraine Crisis make oil shocks likely
Alen Mattich 14, financial journalist at WSJ, 6/16/14, World Street Journal, “Building Up To Another
Oil Shock?”, http://blogs.wsj.com/moneybeat/2014/06/16/building-up-to-another-oil-shock/
Will Iraq derail the global economic recovery? The
latest iteration of the country’s seemingly endless conflict has already started to
squeeze oil prices higher. The question now facing investors is how much of an oil shock would it take to stall what
looks to be a widespread–if still very subdued–recovery from the financial crisis of 2008. The price of West Texas Intermediate crude oil has
risen 17% over the past six months to $107.12 a barrel–with a 5.4% gain coming just in the past week. That’s well short of a shock. But in the
past, strong prices rises have proved a hazard to economies, which would make yet further increases alarming. “The
correlation between oil shocks and economic recessions appears to be too strong to be just a
coincidence,” wrote James Hamilton, an economics professor at the University of Southern California, San Diego, in a 2011 analysis of
historic relationships between oil and economic growth. Substantial rises in oil prices have been associated with most of
the recessions the U.S. has faced since the end of the Second World War. And in a few of the cases where only a
modest rise in oil prices preceded the economic downturn, concurrent price controls on fuel make it hard to gauge where
prices might have been under free market conditions. What’s more, as the oil shock associated with the Gulf War of 1990 shows, Iraq
matters. Iraq is a key oil producer, the world’s eighth largest in 2013. And a jump in total production (including natural gas) to 3.1
million barrels per day (bpd) in 2013 from 2.4 million barrels in 2009 has been a major contributor in the overall growth in global output to 90.3
million bpd last year from 85 million over the same period. So far, the market jitters have been contained, not least because the sort of upward
momentum the market has seen so far this year falls well short of previous recessionary triggers. On average, when U.S. recessions have
followed oil shocks during the past 70 years, crude prices have tended to rise by more than 50% over periods ranging from a couple of months
to about a year-and-a-half in the case of the 2007-08 slump. And Americans might feel insulated from a possible supply crisis, but that wouldn’t
last long in the case of a Middle Eastern meltdown. Since 2006, total U.S. oil production has expanded by 4 million bpd to 12.3 million bpd in
2013 thanks to shale oil reserves. Indeed production this year is expected to hit its highest level in more than a quarter of a century.
Meanwhile, Canadian output has also grown strongly to where it’s a bigger producer than any Middle Eastern country apart from Saudi Arabia.
But combine
Iraq’s current trauma with the Saudi-Iranian (the world’s number two and number six producers) proxy
war being pursued in Syria and the prospect of escalating tensions with Turkey were Iraq’s Kurdish region to seek full
sovereignty, not to mention the risk that the simmering conflict between Russia (third biggest global producer) and
Ukraine and there’s plenty for investors to worry about. So while the latest rise in oil prices is unlikely to prove a trigger to
a significant global downturn, a further jump in WTI prices to around $135 a barrel might. Note: the second chart has been clarified
to show that output refers to total oil production, which includes crude, natural gas and other.
Oil shocks coming – dependence makes us vulnerable to Iraq supply disruptions
New Zealand Herald, 6-18-2014, "Fran O'Sullivan: Key must be primed for Obama,"
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11276003
On Fox News, Lagarde went on to say that when the IMF looked at big geopolitical risks it also looked at
the consequences on the US economy. "We believe the oil shock that could result from the current
tension in Iraq in particular might affect the economy." But for that to happen, the shock "would have to
be rather deep and rather long-lasting". The Brent crude oil index climbed 4.2 per cent last week - an
indicator of how dependent the world still is on Middle East oil supplies. It is inevitable that the
increasing tensions in Iraq will be centre-stage when Key meets Obama and at his later meeting with US
Defence Secretary Chuck Hagel at the Pentagon.
Oil shocks coming and will cause Middle East war
Martin Wolf 12, chief economics commentator at the Financial Times, “Prepare for a new era of oil
shocks”, 3/27/12. Financial Times, http://www.ft.com/intl/cms/s/0/41ba759a-7730-11e1-baf300144feab49a.html#axzz35gLmtPR2
In short, higher oil prices are a threat. So what is going to happen? In a recent note, Goldman Sachs argues that a 10 per cent rise in
oil prices tends to lower US gross domestic product by 0.2 percentage points after one year and by 0.4 percentage points after two. In the
European Union, the impact is smaller: a reduction of 0.2 percentage points in the first year, but no further reduction thereafter. Since the
actual rise has been 15 per cent since December, the impact on US and EU GDP would be a reduction of 0.3 percentage points over the first
year – appreciable, but not calamitous. Such a price rise would lower US household incomes by about 0.5 per cent. Moreover, crossing the
threshold of $4 a gallon might be significant when confidence is fragile, as it is now. Goldman also suggests the factors that would determine
the size of any adverse impact. The first is whether the rise in prices is caused by demand or a shock to supply, with the latter being more
disruptive. The answer, it suggests, is that demand is now the principal cause of higher prices, though the tightening of sanctions on Iran would
be more important. The Paris-based International Energy Agency, in its latest monthly report, even qualifies this view. It agrees that “there may
be no actual physical supply disruption at present deriving from the Iranian ‘issue’. But there are ongoing non-OPEC outages totalling around
750,000 barrels a day”.The second factor is how much spare capacity exists. The answer: not much. Inventories in high-income oil markets are
low (see chart). Saudi Arabian production is now at 30-year highs, which suggests limited spare capacity. Moreover, the growth of world oil
supply has been persistently slow, at just below 1 per cent a year over the past decade, despite generally high oil prices. Thus, capacity
is
structurally tight. That explains the level and the volatility of prices over the past decade. With potential global
economic growth at 4 per cent a year, oil supply growing at 1 per cent and the lack of easy alternatives to oil as a transport fuel, supply is
likely to become tighter. A third factor is what is happening in other commodity markets. Here the news is good: natural gas prices
have been falling, while agricultural prices have not been so much of a problem this year. This should limit the inflationary impact. A final
consideration is the monetary response. Here the news remains favourable. Central banks are likely to ignore movements in commodity prices,
particularly ones whose impact is contractionary, provided they see no pass-through into wages. They are right to do so. In all, Goldman
concludes, the price increase is a “brake”, not a “break”, in growth. But Fatih Birol, the IEA’s chief economist, warns against too much
complacency. He notes that the EU’s net imports of oil will cost 2.8 per cent of GDP at present prices, against an average of 1.7 per cent
between 2000 and 2010. Given the frailties of the EU economy, the dangers are evident. Furthermore, in this stressed oil market, further
spikes in prices are quite possible. A war with Iran may be the most frightening possibility. But danger is
always present, given the political instabilities in places where oil is produced. Moreover, the world is going
to remain stuck in this danger zone, given the soaring demand for oil from rapidly growing emerging countries. The
IEA suggests that Chinese sales of private light-duty vehicles will reach 50m a year by 2035, even under an energy-efficient scenario. The
implications of such growth in vehicle fleets are quite obvious.
The world will be vulnerable to high oil prices and
repeated shocks, so long as supply is stagnant, demand buoyant and unrest likely – in short, so long as it remains
as it now is. For the US, the best response would be to lower the oil-intensity of its economy, to reduce vulnerability to these shocks. Higher
prices would help deliver this. But why does it let all the revenue go to foreigners? It makes far more sense to tax imports and keep some of it,
instead.
Dependence Bad – Shocks
Recent gains not enough. US needs to reduce dependence to decrease vulnerability
Wendy Koch ’13, reporter on Energy, 10-19-2013, “U.S. oil supply looks vulnerable 40 years after
embargo”, USA Today, http://www.usatoday.com/story/news/nation/2013/10/19/us-oil-imports-opecembargo/2997499/
"We remain very vulnerable," Panetta says, adding it wouldn't take much for members of the
Organization of Petroleum Exporting Countries (OPEC) — which launched the 1973 embargo — or
terrorist groups like al-Qaeda to disrupt supplies. He says the U.S. is using less oil per capita than
decades ago and relying on the Middle East for a smaller share of its imports, but those shifts almost
don't matter. World oil prices, which largely determine what Americans pay at the pump, remain high,
because developing countries including China and India are driving up demand. With global oil supplies
so tight as a result, even a small disruption rattles the markets and causes price spikes. That's why,
despite a 50% increase in U.S. oil production since 2008, the price for a regular gallon of gas remains so
high. It costs, in inflation-adjusted dollars, twice as much as 40 years ago. "We're still part of a global oil
market," says Daniel Yergin oil historian and author of The Quest: Energy Security and the Remaking of
the Modern World. He notes petroleum imports have fallen since their peak in 2005, when they
accounted for 60% of what Americans used. But they've simply retreated to the same share of
consumption as in 1973. The Department of Energy expects imports will continue to fall as U.S. oil
production increases because of fracking. This controversial drilling process blasts huge quantities of
water, mixed with sand and chemicals, underground to break apart shale formations and release oil as
well as natural gas. "We won't become energy independent, but we'll become less energy dependent,"
Yergin says. That's not enough to inoculate the U.S. from future oil shocks. "Despite the domestic oil
boom, America's oil security is only middle-of-the-road," Robbie Diamond of Securing America's Future
Energy (SAFE), a non-partisan group aimed at reducing U.S. dependency, said this month in releasing a
ranking of 13 countries' oil security. The United States ranked fifth best, after Japan (No. 1), United
Kingdom, Canada and Germany. The report says the U.S. is making strides, including Obama's plan to
nearly double the fuel efficiency of new cars and light trucks — to 54 miles per gallon — by model year
2025. Still, regardless of efficiency gains, it says Americans use more oil than China, Japan and Russia
combined, accounting for 20% of global consumption. "Our nation's oil dependence leaves the
economy dangerously exposed to high and volatile oil prices," says Diamond, the group's chief executive
officer.
Reducing dependence is the only way to reduce the chance of an oil shock
Robert W. Fri ’13, former First Deputy Administrator of the EPA, Member of the University of Chicago
Board of Governors, Trustee of Science Service Inc, publisher of Science News, 11-27-2013, “U.S. Oil
Dependence Remains a Problem”, ISSUES in Science and Technology, http://issues.org/19-4/fri/
War and terrorism have changed a lot about how we think about oil markets. But one thing they haven’t changed
during the past 14 years is the fact that excessive dependence on oil in our domestic energy mix exposes us to
potentially serious economic and security risks. And they have not changed the importance of taking action to cut oil
consumption in the U.S. economy. In 1989, I argued that the Organization of Petroleum Exporting Countries (OPEC) would be able to control
energy prices by the mid-1990s unless policy actions were taken to prevent it. Price control would enable OPEC to extract rents–charge a lot
since the bulk of OPEC
production is in the Middle East, the famous political instability of that region would expose consumers
more for its oil than it cost to produce–that would be a drag on the economies of oil consumers. Moreover,
to price shocks. Those risks did not depend on how much OPEC oil a consumer imported; world oil markets would ensure that all
consumer nations experienced the same high and potentially volatile prices. The main lesson of the intervening years is that
cutting demand is the essential policy. That is pretty much what happened. As oil markets tightened during the 1990s economic
boom, a reasonably well-disciplined OPEC became the world’s swing producer, or market regulator. As such, OPEC, and especially Saudi Arabia,
could adjust production to exert a strong influence on world prices. Not surprisingly, two wars in the Persian Gulf and terrorism at home
OPEC’s position is unlikely to change anytime
soon. Growth in oil consumption will resume as the world economy recovers. Developing nations will
stake an increasing claim on oil; China, for example, has swung from a small oil exporter in 1989 to an importer of almost 2 million
barrels per day. On the supply side, some growth in oil production outside OPEC is likely, but the Middle East retains the
dominant share of oil reserves on which future production will be based. For years to come, OPEC seems likely to
produced the expected price excursions, which happily did not last too long.
remain the global swing producer. The key question is how OPEC will go about setting prices. For the past few years, OPEC pricing policy has
been fairly benign, successfully holding the per-barrel price in the $22 to $28 range. That price is intended to keep OPEC’s revenue high without
creating so much competition from new sources as to erode its market control. The oil revenues enrich governing powers and families, while
making life tolerable for the general population. Luxury for the few and calm for the many has been more than enough reason to keep the oil
flowing during the procession of political crises that have beset the region. It’s why turmoil in oil markets has been relatively short-lived.
OPEC’s comfortable position has become precarious. Control of the world’s secondlargest oil reserve–Iraq’s–is up for grabs. Terrorists seem eager to destabilize governments in the Middle
East as well as undermine U.S. influence there. It’s too soon to predict how the political situation will play out, but the range
of possibilities is broad. One current view is that the fall of the regime of Saddam Hussein is but the first step
toward more democratic, market-driven societies throughout the region. Another is that the more
radical elements will seize control and use oil as a weapon to redress grievances. How will the political resolution
affect oil markets? Clearly, the latter outcome would only increase the risks posed by excessive dependence on
oil. Unfortunately, it’s not clear that the happier outcome would do much to reduce those risks. A more stable and globally integrated Middle
Currently, however,
East has much to recommend it, of course. Democracies presumably don’t start oil wars any faster than they start other kinds, and more open
markets would encourage the investments needed to keep OPEC oil production growing. Yet even the most democratic of swing producer
So it’s not
unreasonable to expect that even the best political outcome would leave oil consumers paying a high
price for increasing use of OPEC oil. Nor is it unreasonable to expect a less-than-optimal outcome in the
troubled Middle East. All of the above suggest that we face much the same problem we did 14 years
ago: how to reduce our oil dependence. The main lesson of the intervening years is that cutting demand
is the essential policy. Since 1989, non-OPEC production has been reasonably constant, which is no small success. Looking ahead,
governments is unlikely to volunteer to sell its oil for less than the markets will bear; at least, none does so today.
developments in the former Soviet Union and in Africa suggest that there is good potential for holding production steady. But aside from the
collapse in demand that accompanied the breakup of the Soviet bloc, world oil consumption has grown at more than 2 percent annually since
1989.
Iraq proves risk of shocks. Reduced dependence is imperative.
Kevin Johnson ’14, Fellow with the Truman National Security Project, recipient of the White House
Champions of Change award, 6-23-14, Inside Sources, “Iraq Turmoil Shows Need To Reduce Dependence
On Oil”, http://www.insidesources.com/iraq-turmoil-shows-need-to-reduce-dependence-on-oil/
The importance of Iraq in the international oil market cannot be understated. Iraq is currently the
world’s fasted growing oil exporting country, hitting a 35-year high. And according to the EIA, 60 percent of expected growth in
OPEC’s crude production capacity in 2019 would come from Iraq. Due to Iraq’s importance in the global supply, any slight
disruption would send prices skyrocketing with devastating impacts on the global economy. Experts predict
that even a moderate disruption of 1 million barrels per day could raise global prices by $37 per barrel in
turn shaving 1% off of U.S. GDP. Iraq’s oil producing fields have largely been protected from the escalating violence by a
combination of distance from the conflict and some 30,000 Shiite troops whose sole mission is to guard the precious resource. However,
should the fighting continue to expand across the country, even the very risk of disruption will influence
global pricing. Given the current state of the global market, the “new normal” of high and volatile oil prices is not expected to change for
now or in the foreseeable future. However, geopolitical turmoil is not the core problem; it is the insatiable yet evergrowing consumption of oil that most threatens global security. Despite technological advances enabling global
production to reach all-time highs, the fact remains supply increases cannot keep up with skyrocketing global
demand. According to the Wall Street Journal, oil consumption grew by 1.4%, or 1.4 million barrels a day, but production grew by just .6%,
or 560,000 barrels a day. This new reality—that demand is outpacing production—must be a final rebuke to foolish calls of “drill, baby, drill.”
As long as we remain reliant upon oil, the United States will continue to be vulnerable to an everincreasing volatile international market. To be sure, we cannot make such a massive change overnight; oil will remain a vital
resource in the near- and medium-term. This is why the United States should continue to prioritize stability and security in the largest oilproducing countries as a national security imperative and share best processes and technologies in extraction with allied nations like Cyprus
and Greece. As a veteran, I know first-hand the high price we pay in blood and treasure to secure oil supplies, from protecting desert fuel
convoys to keeping international shipping lanes open for oil tankers. The
military, the largest national consumer of fossil
fuels, is most vulnerable to global price shocks that cut into already shrinking budgets; this is why the
Department of Defense is leading the way to a more sustainable future. Ultimately though, the biggest investment in
strengthening our long-term security is to reduce dependence on oil and prioritize the development of alternative
energy sources. We can choose to invest in a different future by harnessing the power of more secure, renewable sources, such as wind and
solar, that can fuel our economy in new ways. Through
a diversification of our energy resources and a reduction of
our dependence on oil, we can reduce our exposure to these unpredictable price shocks and stop
funding nations around the world who do not share America’s values. Developing and deploying lowercost fuel sources will ultimately build a more secure energy future for all.
US dependency on oil puts us at risk for a shock. Shale can’t solve. New sources need
to be found.
Nafeez Ahmet ’14, best selling author, international security scholar, executive director of the
Institute for Policy Research and Development, 2-17-14, The Guardian, “US Army colonel: world is
sleepwalking to a global energy crisis”, http://www.theguardian.com/environment/earthinsight/2014/jan/17/peak-oil-oilandgascompanies
"We put the event together because the prevailing idea that we have a bright future of increasing oil
and gas production that can sustain our current way of life indefinitely is based on a selective appraisal
of the data. We brought together experts from across the spectrum, and with a wide range of opinions,
to have a comprehensive look at all the relevant data. When you only look at certain things, like the very
real resurgence of US oil and gas production, the picture looks fine. But when you dig deeper into the
data, it becomes clear that this is only part of the picture. And the big picture proves that our current
course cannot continue without significant risks." The dialogue opened with a presentation by Mark C.
Lewis, former head of energy research at Deutsche Bank's commodities unit, who highlighted three
interlinked problems facing the global energy system: "very high decline rates" in global production;
"soaring" investment requirements "to find new oil"; and since 2005, "falling exports of crude oil
globally." Lewis told participants that the International Energy Agency's (IEA) own "comprehensive"
analysis in its World Energy Outlook of the 1,600 fields providing 70% of today's global oil supply, show
"an observed decline rate of 6.2%" - double the IEA's stated estimate of future decline rate out to 2035
of about 3%. The IEA report also shows that despite oil industry investment trebling in real terms since
2000 (an increase of around 200-300%), this has translated into an oil supply increase of just 12%. Lewis
said: "That is a very striking number and one I think that should be ringing alarm bells. It indicates to me
that something has fundamentally changed in the economics of the oil industry and that you're having
to invest more and more for diminishing incremental production." Lewis also referred to US Energy
Information Administration (EIA) data showing that although global crude oil exports increased "year on
year from 2001 to 2005", they "peaked in 2005 and have been trending down since 2009." Lewis
attributed this trend to rapidly rising populations in the Middle East which has led to escalating domestic
oil consumption, effectively eating into the quantity of oil available to export onto world markets. OPEC
(Organisation of Petroleum Exporting Countries) populations since 2000 have increased at twice the rate
of the world as a whole. This has driven them to increase their oil consumption four times faster, or by
56%, relative to the rest of the world. Such increases in domestic consumption, curtailing global exports,
have been enabled by a corresponding increase in domestic subsidies, said Lewis. Fossil fuel subsidies
have increased to $544 billion, nearly half of which amounted to oil subsidies dominated by Saudi Arabia
and Iran. Against this consistent trend of rapidly declining oil exports, Lewis questioned the IEA's
projection of an increase in global crude oil exports and imports from 35 to 38 million barrels a day out
to 2035. He pointed out that if such domestic subsidies are removed by OPEC to facilitate increased
exports, this would increase "the risk of greater domestic stress and social disorder", as already seen
since the 'Arab spring'. Lewis' presentation was complimented by geoscientist David Hughes, formerly of
the Geological Survey of Canada, who cited a wealth of official data demonstrating that shale oil
production is likely to peak around 2016-17. Similarly, US shale gas production has sustained a plateau
for the last year that is unlikely to retain long-term sustainability due to spectacularly high decline rates,
and because the vast majority of production comes from just two or three plays. The upshot is that
continued dependence on fossil fuels is becoming increasingly expensive, with oil prices continuing to
rise for the foreseeable future, impinging evermore on global economic growth. At worst, declining
global exports point to a risk of an oil crunch that could, in turn, trigger another financial crash. Coconvener of the conference Leggett, author of the new book, The Energy of Nations, said: "It should not
be forgotten that only a very few people warned that the financial incumbency had their particular
comforting narrative catastrophically wrong, until the proof came along in the shape of the financial
crash." According to Leggett, a global energy crisis is unlikely to "erupt fully until 2015 at the earliest."
According to Lt. Col. Davis, scepticism of the oil industry's bullishness about future production is growing
amongst senior Pentagon officials: "A lot of high-ranking officials are starting to ask exactly these hard
questions about the sustainability of the current energy system. You've got to remember that for the
military, it doesn't matter what you want to do. What matters is what you can do, and it's our top
priority to make sure we understand potential limits to our operational capability. Even the EIA is
forecasting that we could see a peak of shale production by 2018 followed by a plateau and decline, and
the Pentagon knows this. But our transport infrastructure is totally dependent on liquid fuels. How are
we going to sustain that infrastructure with these decline rates? That's why serious questions are being
asked by high level US military officials as to what exactly the Army, as well as American society in
general, is going to do to address this challenge."
Simulations prove US is not ready for Oil Shocks
Securing America’s Future Energy, No Date, this site is a .org, “Oil Dependence: A Threat to U.S.
Economic & National Security,” http://www.secureenergy.org/sites/default/files/155_BriefingOilDependence.pdf
Oil ShockWave simulations conducted in a variety of settings have demonstrated that the United States is not
currently able to respond effectively to an oil supply crisis. > Simulation participants, including current and former
senior government and defense officials, have found that military intervention is infeasible. > The Strategic Petroleum
Reserve (SPR) might offer some protection against a major supply disrup- tion, but this protection would be limited in scope and duration.
Other emergency measures, like mandated demand reductions, are generally not sustainable for more than a few months to a year.
Dependence Bad – Econ
We must end oil dependence now – key to the economy
Daniel Mills, June 25, 2014, Daniel Mills is a writer for Economy in Crisis, “We Must End Our Dependence on Foreign Oil,”
http://economyincrisis.org/content/we-must-end-our-dependence-on-foreign-oil
As turmoil continues in Iraq with rebel groups taking over significant portions of the country, gas prices
are on the rise again. Oil has again topped over $114 a barrel and could climb higher. Iraq is one of the countries we
receive a significant portion of our oil supply from. This instability in Iraq has continued for some time now which is why
gasoline prices have increased from $3.24 a gallon to $3.63 in the last few months. The U.S. imports
over 8 million barrels of oil a day to fulfill our needs. This increases our trade deficit and sends jobs
overseas. This continues our dependence on foreign producers to keep us going which makes us weaker.
We must decrease our dependence on foreign oil in order to restore America. “Free trade” agreements
have increased our consumption of foreign oil and decreased our own production, as oil from Mexico
and third world countries can be produced at a fraction of the cost of what it is here, and then shipped
to the U.S. “Free trade” then ensures that it comes into the U.S. without hindrance. “Free trade” means
unrestricted, uncontrolled access to our economy, tariff- and duty-free, for goods made for $4-per-hour
or less. By reducing our dependency on foreign oil we can significantly decrease our trade deficit
because foreign oil makes up about half of it! As an added bonus, U.S. jobs would be created from the
clean energy technologies that would be adopted in place of foreign oil. It’s a win/win for the United
States. However, it is not enough to merely decrease our dependence on foreign oil. The U.S. must take the lead on clean energy as well, something China has
recently done. If we do not become the leader in the clean energy arena, we will merely trade importing foreign oil for importing parts and components to build
windmills and solar panels — meaning we will still be dependent on foreign countries for our energy supply. By investing in clean energy we will increase our energy
supply, decrease our dependence on foreign oil and help our improve the environment.
Oil dependence causes massive problems
Securing America’s Future Energy, No Date, this site is a .org, “Oil Dependence: A Threat to U.S. Economic &
National Security,” http://www.secureenergy.org/policy/oil-dependence-threat-us-economic-national-security
Oil dependence endangers U.S. economic and national security. In addition to hundreds of billions of
dollars each year in direct costs, oil dependence feeds the growth of terrorism; provides vast amounts of
money to unstable, undemocratic governments; increases the likelihood of international conflict; puts
American troops in harm’s way; and exposes Americans to the risk of severe economic dislocation
History provides ample evidence of the potential economic consequences of oil dependence. At best,
short-term measures offer limited protection against the effects of oil supply disruptions, but there are long-term
policy options available that would significantly reduce our exposure to the tremendous costs and potentially devastating effects of oil dependence. It is these longterm reforms that must be implemented to improve U.S. economic and national security.
Shocks Kill Econ
Oil shocks from status quo Iraqi instability crushes global economic recovery
Andrew Critchlow 14, Telegraph's Business News Editor, expert on energy, commodities and Arab
business, 9/11/14, “Iraq oil shock could kill world economic recovery, experts warn”, The Telegraph,
http://www.telegraph.co.uk/finance/newsbysector/energy/10893255/Iraq-oil-shock-could-kill-worldeconomic-recovery-experts-warn.html
Open warfare between the government and rebels in
Iraq would pose a threat to the global economic recovery
should oil production from the war-torn Middle East state suffer a serious disruption, analysts have warned. Brent oil prices
climbed as high as $110.25 (£65.59) on Wednesday amid concerns that 3.5m barrels per day of Iraqi exports could
be knocked out of the market by the violence that has seen al-Qaeda forces seize control of Mosul, Tikrit and Samarra. "The worst
case scenario is that we see production from Iraq slip down to levels in the last Gulf war, then oil could spike
$20 a barrel very quickly," Ole Hansen, vice-president and head of commodity strategy at Saxo Bank told The Telegraph. "In that scenario,
the entire economic recovery, which is still fragile, could stall and we could even slip back into recession in some
regions." Iraq's oil minister, Abdul Kareem Luaibi, who was attending a gathering of the 12-member Organisation of Petroleum Exporting
Countries (Opec) in Vienna on Wednesday, tried to ease concerns by stressing that most of the country's crude was pumped from fields in the
Shia-Muslim dominated South, where export facilities are "very, very safe". Despite the deteriorating political
situation in Iraq,
where government forces have been seen fleeing from the Sunni-Muslim al-Qaeda insurgents, Opec decided to leave its
production quotas unchanged. The cartel limits the output of its members to 30m barrels per day (bpd) of crude, roughly a third of
the world's supply. However, the group's ability to react to shocks to the oil market is limited, with Saudi Arabia the
only producer with enough spare production capacity to cover any shortfalls. Riyadh maintains about 12.5m barrles per day (bpd) of production
capacity, with 2.5m bpd - three-times Britain's output from the North Sea - lying idle at any one time. Although Saudi's oil officials told reporters
in Vienna on Wednesday that the kingdom and Opec could compensate for any Iraqi shortfalls, oil traders remain concerned. In a note to
Bloomberg, Helima Croft, Barclays' head of North American commodities research, said: “The
shocking escalation in violence in
Iraq raises the prospect of potential output losses. It comes as other key producers, like Libya, have also seen exports
'evaporate' amid rising unrest." Helped by investment from international oil companies such as Royal Dutch Shell, BP and Lukoil, Iraq has
increased its importance in the world oil market since recovering from the 2003 war. The opening of the giant West Qurna-2
oilfield near Basra in March would allow Iraq to pump 4m bpd by the end of the year. Already the second-largest producer in Opec after Saudi
Arabia, according to Reuters, Iraq has pumped an average of 3.5m bpd since the beginning of the year. UK oil companies working in Iraq are
understood to be closely monitoring the situation but at this point have no plans to withdraw workers from their fields.
Oil shocks crush US economic recovery
Maria Gallucci 14, clean economy reporter for InsideClimate News, 6/12/14, “Iraqi Crisis Could Drive
Oil Prices Up To Recession-Era Levels If Insurgents Expand South, Analysts Say”, International Business
Times, http://www.ibtimes.com/iraqi-crisis-could-drive-oil-prices-recession-era-levels-if-insurgentsexpand-south-1599844
Global oil prices could spike to levels not seen since the financial crisis if the armed insurgency in Iraq
spreads further south, analysts say. Al Qaeda splinter groups this week seized control of two major
northern cities, Mosul and Tikrit, and parts of Kirkuk, which has some of Iraq’s key oil fields. The
takeovers escalated worries that the violence could hit major oil production sites and export facilities in
the southern part of Iraq, which in turn caused oil prices to jump on Thursday. West Texas Intermediate,
a U.S. benchmark crude oil, rose $1.54 to trade at $105.94, and Brent futures were up more than $2 to
more than $112 a barrel, trading at the highest level since early March, MarketWatch reported. But
Brent prices could approach the record $147 high hit in 2008 if the worst fears for Iraq’s oil exports are
borne out, said Fadel Gheit, a senior oil and gas analyst at Oppenheimer & Co. Inc. in New York. If that
happens, “it will derail the economic recovery, spike inflation and put an end to the rally on the stock
market,” he told International Business Times. “The situation is bad and can get worse.”
High oil prices causes US economic recession- empirics
Quentin Fottrell 14, Writer for WSJ's MarketWatch, What the Iraq crisis means for you, 6-18-14,
MarketWatch, http://news.morningstar.com/all/market-watch/TDJNMW20140618387/what-the-iraqcrisis-means-for-you.aspx
Crude-oil prices climbed higher Wednesday after militants in Iraq attacked the country's biggest oil refinery. Should the crisis in Iraq deteriorate
further over the coming weeks and months, experts say American consumers will feel the impact, and not just in gasoline prices.
Increased instability in Iraq, which has the fifth-largest proven crude oil reserves in the world, will continue to push crude-oil prices higher, particularly if militants
continue targeting major oil fields, says Peter Morici, economist and professor at the University of Maryland's R.H. Smith School of Business. Crude oil edged closer
to $107 a barrel on Wednesday with reports that Sunni militants have 75% of Iraq's major refinery under their control in an attack that came overnight. (Oil is
currently $3.67, according to GasBuddy.com, a site and app that tracks gas prices nationwide.) "It could take oil to $4 a gallon or above," he says. " That
would
have some effect on economic activity." Among the first things Americans will do? "Put the cost of extra gas on their credit cards and cut back
on discretionary spending like eating out," says Mark Hamrich, Washington bureau chief with personal finance site Bankrate.com. Gasoline currently makes up
approximately 4% of U.S. income, according to the U.S. Energy Information Administration, but that's the highest level recorded for the past three decades with the
sole exception of 2008. "Generally speaking, using credit cards to purchase gasoline for those who can't afford it is not a good idea," Hamrich adds. The average
credit card debt for U.S. households currently stands at $15,191, according to an analysis by NerdWallet.com, a financial advice website. But higher gas prices have
ripple effects, too. All
but one of the 11 U.S. recessions that followed World War II were associated with an
increase in the price of oil, the exception being the recession of 1960, according to a 2010 research paper entitled "Historical Oil Shocks" by James
Hamilton, professor of economics at the University of California, San Diego. If consumers try to maintain their standard purchases of energy in the face of rising
prices, their spending on other goods must fall commensurately, the paper found. Given the record of geopolitical instability in the Middle East and worldwide
demand for oil, it seems "quite reasonable" to expect another oil shock within the next decade, he concluded. Crude oil is used for the transportation of consumer
goods, so a short-term spike in oil prices will mean a faster increase in imported consumer goods like electronics, toys and clothing, says Jeremy Edwards, lead
analyst of industry research at IBISWorld. Excluding automobiles, consumer goods represent nearly one-quarter of U.S. imports, according to the U.S. Census
Bureau. "The capture of Iraq's second largest city, Mosul, poses a potential threat as the area is a major gateway for Iraqi oil," Edwards says. "Fears
over a
disruption to production and supplies in southern Iraq are one of the key concerns for U.S. and European markets as
the majority of shipments are occurring from this area." The impact of higher transportation prices on key ingredients in the great American food chain will be
harder to avoid, Edwards adds. Corn is the largest source of grain in the U.S., while soybean is the largest source of oil seeds in the U.S. Corn is a key ingredient in a
large number of consumer products such as cornmeal, penicillin, starch and alcohol; it's also a major ingredient in food for livestock, so higher feed costs lead to
higher meat prices, Edwards adds. Soybean also gets used in lots of products like soaps, candles, cosmetic products and perfumes. "Those products could face some
higher prices," he says. What's more, ethanol is also made from corn and soybean.
Oil shocks have preceded each US recession since WW2
Thanyalak Suthijindawong 14, student at Michigan Technological University, 14, "Do increases in oil
prices precede U.S. recessions?", Master's Thesis, Michigan Technological University,
http://digitalcommons.mtu.edu/etds/740
This paper tests for a relationship between oil price changes and economic activity, and it attempts to address the
question: do increases in oil prices (oil shocks) precede a recession in the U.S.? In order to answer this question several tests were made. The binary cyclical
indicator tested the turning point of oil prices compared with those of GDP, finding
that oil prices almost always increase an
average of five months before a recession. This suggests that an oil shock might occur before a recession. It also indicates that
increases in oil prices may be reliable indicators of the U.S. having a recession. The correlation test shows that WPU oil
price index cycles and NBER U.S. cycles are a weak positively correlated, which mean that the WPU oil price index cycles move in the same direction as the NBER US
cycles. Even
though the WPU oil price index cycle is positive, the relationship is very weak and is
somewhat insignificant. The NBER US cycles have a higher correlation when the WPU Oil Price Index cycles move back in different time period. The
correlation test also is an indication of a strong positive correlation between the U.S. GDP, and oil prices. This means that the U.S. GDP often moves
in the same direction as oil prices. The Granger causality test shows that oil prices Granger cause the U.S.
recessions, indicating that the oil price is a useful tool to indicate the U.S. cycle. While, the result of the Granger causality shows that the U.S. recession just
occurred at the same time as the oil price increase. Combining this analysis from the literature, there are several other issues: explanations that the spike in oil
prices is one major cause of recession. There is some evidence that the effect of oil price changes on the macroeconomy may not be linear; a negative effect of a
spike up in oil prices is more pronounced than the 42 52ositive effect of the same size of a decrease in oil prices. Also, the literature concludes that significant
increases in oil prices (oil
shocks) result in slower GDP growth and are a contributing factor of U.S. recessions, a higher
unemployment rate, and increases in the cost of living. Some economists argue that oil shocks are not just coincidently happening at the same time as recessions.
Furthermore, all
but one of the U.S. recessions since World War II has been proceeded by an increase in the
price of oil, the exception being the minor recession of 1960. Therefore, it is worthwhile to continue investigating this relationship between oil prices and the
U.S. economic activity by reproducing Hamilton’s results. We should also try to come with difference methods beside what has been shown in the research to
predict the relationship between oil prices and U.S. recessions
Empirics prove – Oil shocks have economic consequences
Securing America’s Future Energy, No Date, this site is a .org, “Oil Dependence: A Threat to U.S.
Economic & National Security,” http://www.secureenergy.org/sites/default/files/155_BriefingOilDependence.pdf
History provides ample evidence of the potential economic consequences of oil dependence. From 1970- 2000, oil
shocks are estimated to have cost the U.S. economy an estimated $7 trillion (in 1998 dollars.)13 In 1973, the
Arab oil embargo had a macroeconomic effect akin to those that would result from a simultaneous increase in consumer and
businesses taxes. > Consumption and investment slowed everywhere as the world economy was thrown into recession; >
Roughly a year after the embargo had begun, real gross national product (GNP) had declined at a rate of 7.5% per annum.14 > Schools
and offices were closed to save on heating oil and factories were forced to lay off workers and cut production; > Current account deficits soared
and central banks cut interest rates to encourage growth; In
the aftermath of the oil shock associated with the Iranian
Revolution in 1979, quarterly GDP growth in the following year remained low and decreased by as much as 7.8 percent
in the second quarter of 1980 (annualized in 2000 dollars). Oil prices spiked and American consumers switched in droves to
purchasing smaller, imported cars, causing the U.S. auto industry to suffer tremendously.15 The doubling of
oil prices between 2003 and 2005 had a stalling effect on American employment and wage growth. On the whole,
however, the economy was resilient because it was in a better position to weather high oil prices than in the past. Rising prices cause less
damage today because the U.S. economy is half as energy intensive as it was in the 1970s, meaning it takes half as many Btu’s of energy to
produce $1 of GDP. The moderate prices of other goods, falling long-term interest rates and rising home values also made it easier to absorb
higher energy prices. Moreover, prices increased gradually, whereas an abrupt price spike would have had a much greater impact. However,
given the tight balance of today’s market, even a modest supply disruption could result in a dramatic rise in the price of oil.
Drilling Solves Shocks
Domestic oil production is critical to fend off oil spikes. Now key – Iraq turmoil.
Ken Blackwell ’14, Former Secretary of State in Ohio, Senior Fellow for Family Empowerment at the
Family Research Council, 6-23-14, CNSNEWS, “Iraq Crisis: Latest Sign of U.S. Vulnerability to Oil Price
Spikes”, http://cnsnews.com/commentary/ken-blackwell/iraq-crisis-latest-sign-us-vulnerability-oil-pricespikes
One immediate effect of the turmoil, however, is painfully obvious: oil prices have already hit a ninemonth high. Brent crude reached $115 per barrel this week, a level our country has not experienced since the height of U.S. tensions with
Syria in September 2013. As a result, a number of market analysts now expect U.S. gasoline prices to surpass
their highest levels for the month of June since 2008, rising from today's level of $3.68 per gallon to as much as $3.80 per
gallon by the end of the month. If that were not troubling enough, Iraq's vital importance to the global oil market could
mean that today's rising prices may be just the beginning. Markets are already reeling from a series of oil production
outages in countries across the globe-from Nigeria, Libya, and South Sudan to Iraq, Iran, and Syria. Any additional loss of supplies
from Iraq could stress the system to its limit and send oil prices to levels that many of America's political
leaders had hoped were a thing of the past. A recent analysis by the Commission on Energy and Geopolitics, a group of former
high-ranking military and civilian government officials, found that a partial disruption to Iraq's oil supplies-1 mbd, or about a
third of Iraq's current production-would cause oil prices to rise by more than $30 per barrel, amounting to an approximate
50 cent per gallon increase at the pump for American consumers. With the United States consuming close to 20 million
barrels of oil per day, it doesn't take a trained economist to understand that we would take a serious
economic hit. At today's oil price levels, the average U.S. family is already spending more than twice as much on gasoline as they were a
decade ago-a total of $2,700 per household in 2012 compared to $1,200 in 2002 according to the Bureau of Labor Statistics. An oil price
spike of the magnitude described by the Commission and other analysts would send spending on oil to
record levels and have an immediate, damaging impact on economic growth. We need to take back control of our
economic fate. We shouldn't accept as fact the idea that our overall prosperity and economic well-being are held hostage to the kinds of
violence, extremism, corruption, and mismanagement that are endemic to the global oil market. We can do better, and we have options. Part
of the
answer can be found in rising domestic oil production. The U.S. oil boom has provided significant
benefits, including an improved balance of trade and hundreds of thousands of new American jobs. That
should be embraced and supported. However, no matter how much we produce at home, oil will be priced in a global market,
meaning that geopolitical events beyond our control will still have the ability to send our economy into a tailspin.
Increased Domestic Drilling allows for oil dependence shielding us from future oil
shocks
Furman and Sperling 2013, Jason Furman and Gene Sperling, August 29 2013, Jason-economist former deputy of director of
th
National Economic Council, Gene-current director of National Economic Council, “Reducing America’s Dependence on Foreign Oil As a Strategy
to Increase Economic Growth and Reduce Economic Vulnerability “, http://www.whitehouse.gov/blog/2013/08/29/reducing-america-sdependence-foreign-oil-strategy-increase-economic-growth-and-redu //RD
Today the
Bureau of Economic Analysis revised up its estimate of second quarter GDP from 1.7 percent to 2.5 percent. This
stronger estimate of growth was a result of an upward revision in net exports, with the trade data showing
that a key part of the revision is because the trade deficit in petroleum fell to a record low in June. This is
yet another reminder that the President’s focus on increasing America’s energy independence is not just a
critical national security strategy, it is also part of an economic plan to create jobs, expand growth and
cut the trade deficit. The President established a national goal in 2011 to reduce oil imports by one third
by 2020 and elevated the goal in 2012 to reduce them by one half by 2020. We are currently on track to
meet this ambitious goal if we continue to follow through on the policies that are critical to achieving
it. There are three basic elements to achieving this goal: Increasing domestic production of oil. Government funded
research supplemented private industry’s work to develop the technology that sparked the boom in oil and gas
production. Crude oil production has grown each year the President has been in office to its highest level
in 17 years in 2012 (see chart above). In fact, over the past four years, domestic oil supply growth has accounted
for over one-third of global oil production growth. Developing substitutes for oil. This includes almost doubling the
production of biofuels since 2007 – to a near all-time high – and the substitution as a transportation fuel of oil with
natural gas, production of which increased by 25% to an all-time high in 2012. Increase energy efficiency to reduce the use of
oil overall. With a combination of the stronger fuel efficiency standards and investments in cutting edge technologies, we currently have the
most fuel efficient light-duty vehicle fleet ever, and we are working to increase the efficiency of the medium- and heavy-duty fleet as well. As
a result of these changes, in 2012, net petroleum imports had fallen by one-third since 2008 to the
lowest level in 20 years. And imports are continuing to fall this year as well. We will shortly be at the
point where domestic crude oil production exceeds imports on a sustained basis for the first time since
the early 1990s. The increased domestic supply combined with increased oil efficiency of the economy reduces
vulnerability to global supply disruptions and price shocks, enhancing our national security.
Oil Dependence Insulates the U.S from the Oil Shocks but further drilling is key to stay
on course
Zumbrun June 17th , 2014, Josh Zumbran , National Economics Corresp. For WSJ, “Upshot of Domestic Oil Boom: Fewer Shocks”,
Wall Street Journal, http://naturalresources.house.gov/news/documentsingle.aspx?DocumentID=385322 //RD
Much has changed since the so-called Arab Spring to alter the U.S. energy picture. Advanced technologies such as hydraulic fracturing, or
fracking, have boosted U.S. crude-oil production by 47% since late 2010. Domestic U.S.
oil production in October surpassed
imports for the first time in nearly two decades, putting slack into the global oil market and making more crude
available at lower prices to countries like China and India. Canada, too, has made great gains in oil production, so that the U.S. now imports
about as much oil from its northern neighbor as from all of the Organization of the Petroleum Exporting Countries, meaning that the Middle
East's importance to the U.S. energy supply has shrunk. Better fuel economy has also left many consumers less sensitive to
oil prices. For model year 2013, vehicles had average mileage of 24 miles a gallon, up 6% from 2010 and 22% from a decade ago. "The U.S.
is less vulnerable to oil shocks," said Brian Levitt, senior economist at OppenheimerFunds. "Over time, there's
going to be less and less vulnerability to events in the Middle East." That's not to say the U.S. is
invulnerable. The nation still imports more than 7 million barrels a day of crude oil, and for many Americans, the amount of gasoline they
consume is largely determined by the length of their commute. Higher gas prices—now at a national average of $3.69 a gallon, up 11% since
the start of the year, according to the Energy Information Administration—can take a bite from consumer spending elsewhere. An
increase
of just $10 a barrel in the price of oil over three months would reduce U.S. gross domestic product by
about 0.2 percentage point, according to Joseph LaVorgna, chief U.S. economist at Deutsche Bank. Higher oil prices are "a
risk factor and one that we're taking very seriously," said Jason Furman, chairman of the White House Council of
Economic Advisers, speaking Tuesday at a CFO Network event hosted by The Wall Street Journal. Increased domestic oil
production and more-efficient cars mean the U.S. is more insulated from oil shocks than in past decades, he
said, "but no one is fully insulated." Still, while climbing oil prices would hurt U.S. consumers, any increase would benefit U.S. energy producers,
providing a partial offset for the overall U.S. economy, according to Jason Schenker, the president of Prestige Economics in Austin, Texas.
"Because we're importing less, the risks to a widening trade deficit are somewhat diminished," he said, referring
to the reduced need to import foreign oil. And there are potentially gains "from a corporate-profit standpoint" now that more U.S. firms and
workers stand to gain when oil prices rise.
Increased Domestic Drilling makes us less subjected to sudden disruptions and price
spikes
Weiss and Peterson 2014, Daniel J. and Miranda, January 28 , Director of Climate Strategy at American Progress, Special
th
Assistant for Enegy Policy, “Keep American Crude Oil at Home “, Center for American Progress,
http://americanprogress.org/issues/green/report/2014/01/28/82987/keep-american-crude-oil-at-home/ //RD
Over the past five years, the United States has experienced an astounding energy transformation. We
are producing more oil—and using less—due to advances in drilling technologies and more-efficient
vehicles, as required under the modern fuel-economy standards developed by the Obama
administration. The increase in domestic oil supply, combined with the decline in demand, has also led
to a significant decrease in foreign oil imports. These changes make us less vulnerable to a sudden
foreign oil supply disruption that could cause price spikes.
Drilling Solves Econ
Expanded drilling key to the economy – still lots of offshore areas off-limits
Environment & Public Works, 6-25-2014, "U.S. Senate Committee on Environment and Public Works,"
http://www.epw.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRec
ord_id=4645b286-0326-4ac1-ac7a-e120a7c8767b
Today, U.S. Sen. David Vitter (R-La.), top Republican on the Environment and Public Works Committee,
along with Sens. Roger Wicker (R-Miss.), Jeff Sessions (R-Ala.), and Tim Scott (R-S.C.) sent a letter to Sally
Jewell, Secretary of the Department of Interior, regarding the Department's oil and gas leasing plan for
2017 through 2022 on the Outer Continental Shelf (OCS). "You now have a final opportunity during the
Obama Administration to put forward a plan that will not only generate substantial government
revenues, create jobs, and improve the economy of our nation, but also could yield long-term
geopolitical benefits through ensuring a decreased reliance on foreign resources," wrote the Senators.
"Given the tremendously positive impacts that opening these waters to new drilling would have, we
respectfully advise that now is not the time to play politics with such a decision." In the letter, the
Senators request that Interior's 5-year leasing plan includes the expansion of offshore access to include
areas off the Atlantic Coast, the Eastern Gulf of Mexico, areas off the coast of Southern California, and
multiple areas off the Alaska shoreline that the Obama Administration had previously placed off-limits. A
recent study concluded that developing oil and gas resources in the Pacific OCS and Eastern Gulf alone
would generate more than 200,000 jobs and add $218 billion to the U.S. economy. Since President
Obama was elected, Vitter has been urging the Administration to stop putting large portions of the OCS
off limits for leasing. The President's current 5-year leasing plan is only half of what the previous plan
was and keeps 85 percent offshore areas closed. At the beginning of this Congress, Vitter introduced
legislation that would force the administration to go back to the previous 5-year leading plan that was
scheduled before Obama was elected. Vitter also introduced the Energy Production and Project Delivery
Act that increases domestic production, expedites important reviews for major energy projects, and
could create millions of jobs.
More Domestic Drilling leads to strong upward economic growth
Furman and Sperling 2013, Jason Furman and Gene Sperling, August 29 2013, Jason-economist former deputy of director of
th
National Economic Council, Gene-current director of National Economic Council, “Reducing America’s Dependence on Foreign Oil As a Strategy
to Increase Economic Growth and Reduce Economic Vulnerability “, http://www.whitehouse.gov/blog/2013/08/29/reducing-america-sdependence-foreign-oil-strategy-increase-economic-growth-and-redu //RD
But among
its greatest effects are economic. Every barrel of oil or cubic foot of gas that we produce at
home instead of importing from abroad means: More jobs. Creates American jobs, adds to our national
income, and reduces our trade deficit. Nearly 35,000 jobs have been created over the past four years in oil
and gas extraction alone, with more jobs along the crude oil supply chain. North Dakota, for instance, has achieved
the lowest unemployment rate in the nation (3.1 percent in June), while developing into a center of the resurgence of domestic oil production.
Faster growth. Increasing productivity through new techniques and technologies raises national income
and increases growth. And improving the terms-of-trade by reducing America’s dependence on foreign
oil and increasing our net exports shows up in higher standards of living and also higher growth rates.
Most recently, revised net export numbers—including a substantial contribution from petroleum
products—played a large role in the upward revision of GDP growth in Q2. A lower trade deficit. The oil and gas
boom has also substantially reduced the trade deficit. The real (inflation-adjusted) trade deficit in petroleum products fell to a
record monthly low in June. The chart below shows that through the first six months of 2013, the petroleum deficit is on pace to set a new
annual low this year, after adjusting for price changes. And through June 2013, the petroleum
share of the real trade deficit in
goods has fallen from over 40 percent in 2009 to 25 percent since then, a pattern that will improve as
foreign imports continue to fall and domestic production continues to rise (see chart). Economic news like
this is just one more reason for us to celebrate the resurgence of domestic oil and gas production.
The economy will prosper if America diminishes its oil dependency
Jason Furman and Gene Sperling, August 29, 2013, Jason Furman currently serves as the Chairman of the Council of
Economic Advisors and he was the Principal Deputy Director of the National Economic Council, Gene Sperling was a former
Director of the National Economic Council, “Reducing America’s Dependence on Foreign Oil As a Strategy to Increase Economic
Growth and Reduce Economic Vulnerability,” http://www.whitehouse.gov/blog/2013/08/29/reducing-america-s-dependenceforeign-oil-strategy-increase-economic-growth-and-redu
Today the Bureau of Economic Analysis revised up its estimate of second quarter GDP from 1.7 percent to 2.5 percent. This
stronger estimate of
growth was a result of an upward revision in net exports, with the trade data showing that a key part of
the revision is because the trade deficit in petroleum fell to a record low in June. This is yet another reminder that the
President’s focus on increasing America’s energy independence is not just a critical national security strategy, it is also part of an
economic plan to create jobs, expand growth and cut the trade deficit. The President established a national goal in 2011 to
reduce oil imports by one third by 2020 and elevated the goal in 2012 to reduce them by one half by 2020. We are currently on track to meet this ambitious goal if
we continue to follow through on the policies that are critical to achieving it. There
are three basic elements to achieving this goal:
Increasing domestic production of oil. Government funded research supplemented private industry’s work to develop the technology that
sparked the boom in oil and gas production. Crude oil production has grown each year the President has been in office to its highest level in 17 years in 2012 (see
chart above). In fact, over the past four years, domestic oil supply growth has accounted for over one-third of global oil production growth. Developing
substitutes for oil. This includes almost doubling the production of biofuels since 2007 – to a near alltime high – and the substitution as a transportation fuel of oil with natural gas, production of which
increased by 25% to an all-time high in 2012. Increase energy efficiency to reduce the use of oil overall.
With a combination of the stronger fuel efficiency standards and investments in cutting edge technologies, we currently have the most fuel efficient light-duty
vehicle fleet ever, and we are working to increase the efficiency of the medium- and heavy-duty fleet as well. As a result of these changes, in 2012, net petroleum
imports had fallen by one-third since 2008 to the lowest level in 20 years. And
imports are continuing to fall this year as well. We
will shortly be at the point where domestic crude oil production exceeds imports on a sustained basis
for the first time since the early 1990s. The increased domestic supply combined with increased oil
efficiency of the economy reduces vulnerability to global supply disruptions and price shocks, enhancing
our national security. But among its greatest effects are economic. Every barrel of oil or cubic foot of gas
that we produce at home instead of importing from abroad means: More jobs. Creates American jobs,
adds to our national income, and reduces our trade deficit. Nearly 35,000 jobs have been created over the past four years in oil
and gas extraction alone, with more jobs along the crude oil supply chain. North Dakota, for instance, has achieved the lowest unemployment rate in the nation (3.1
percent in June), while developing into a center of the resurgence of domestic oil production. Faster growth. Increasing productivity through new techniques and
technologies raises national income and increases growth. And improving
the terms-of-trade by reducing America’s
dependence on foreign oil and increasing our net exports shows up in higher standards of living and also
higher growth rates. Most recently, revised net export numbers—including a substantial contribution
from petroleum products—played a large role in the upward revision of GDP growth in Q2. A lower
trade deficit. The oil and gas boom has also substantially reduced the trade deficit. The real (inflation-adjusted) trade deficit in petroleum products fell to a
record monthly low in June. The chart below shows that through the first six months of 2013, the petroleum deficit is on pace to set a new annual low this year,
after adjusting for price changes.
And through June 2013, the petroleum share of the real trade deficit in goods has
fallen from over 40 percent in 2009 to 25 percent since then, a pattern that will improve as foreign
imports continue to fall and domestic production continues to rise (see chart). Economic news like this is
just one more reason for us to celebrate the resurgence of domestic oil and gas production.
Opening the Outer Continental Shelf creates massive employment and stimulates
other industries
Quest Offshore 13 are oil and gas experts that conduct market forecasts, “The Economic Benefits of
Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic ”, December 2013,
http://www.api.org/~/media/Files/Oil-and-Natural-Gas/Exploration/Offshore/Atlantic-OCS/ExecutiveSummary-Economic-Benefits-of-Increasing-US-Access-to-Atlantic-Offshore-Resources.pdf)
Employment Atlantic OCS oil and natural gas development is expected to lead to significant employment
gains, both along the east coast and nationally. Employment impacts are expected to grow throughout
the forecast period, with total incremental U.S. employment reaching nearly 280 thousand jobs by
2035.4 Total Atlantic coast employment in 2035 is projected to reach over 215 thousand jobs with
employment spread across the region. States outside the region are projected to see employment gains
of nearly 65 thousand jobs in 2035. The largest employment impact of Atlantic OCS oil and natural gas
activity is projected in the Mid-Atlantic states of North and South Carolina and Virginia. North Atlantic
states such as Massachusetts, Maine, and New York are all also projected to see employment increases
of at least 10 thousand jobs by 2035. The share of incremental employment within the Atlantic coast
region is anticipated to steadily grow as the proportion of goods and services that are supplied locally
increases. (Figure 3) The resulting impact of Atlantic OCS development upon the economy will be
widespread among industries. Industries which are directly involved in oil and natural gas activities such
as the mining sector (which includes oil and gas development), manufacturing, professional, scientific,
and technical services (engineering), and construction (installation) are expected to see the largest
employment effects with a combined 125 thousand jobs in 2035. Of that total, employment in the oil
and gas sector is projected to be 45 thousand jobs. By 2035, the manufacturing sector which includes
businesses that manufacture and fabricate oil and gas equipment, platforms and otherwise produce the
goods required to develop oil and natural gas fields is projected at around 30 thousand jobs, of which
over 20 thousand of these jobs are expected in the Atlantic coast states. The professional, scientific, and
technical service sector, which includes engineering employment, is expected to see employment in
excess of 32 thousand additional jobs. Employment in the construction sector which includes offshore
installation employment is projected to be around 19 thousand jobs in 2035. Sectors not directly related
to oil and gas development or the supply chain will also see impacts, mainly due to a general increase of
income in the economy. Retail sector employment is projected to increase by over 20 thousand jobs in
2035 due to Atlantic OCS development. Health care and social assistance could increase by nearly 19
thousand jobs, administrative and waste management services by over 18 thousand jobs, food services
and drinking places by over 13 thousand jobs, and finance and insurance, and real estate, rental, and
leasing are both projected to see the creation of over 11 thousand jobs in each sector by 2035.
Contributions to the Economy and Government Revenues Spending by the oil and gas industry, as well
as the impact of increased revenues to state governments is expected to lead to a significant increase of
the nation’s GDP. Total contributions to the economy are projected to be nearly $23.5 billion per year in
2035, with roughly 75 percent of the total expected impact to occur in Atlantic coast states and 25
percent in the rest of the U.S. The largest contributions to states’ economies are expected to be seen in
the Mid-Atlantic states of North Carolina, South Carolina, and Virginia as well as North Atlantic states
such as Massachusetts, New York and Maine. (Figure 4) Atlantic OCS oil and natural gas development
has the potential to significantly increase government revenue from royalties, bonus bids, and rents on
leases, a cumulative $51 billion from 2017 to 2035. Total government revenues are projected to reach
over $12 billion dollars per year in 2035 and are projected to grow beyond the forecast. The majority of
cumulative revenues are from royalties on produced oil and natural gas at $40 billion, leasing bonus bids
are projected to account for around $9 billion, while rental income from offshore blocks is expected to
account for a cumulative amount of $2 billion. This report assumes that associated government revenue
is split 37.5 percent to the coastal states and 62.5 percent to the Federal government. This is similar to
the arrangement in the Gulf of Mexico without an associated cap on state government revenue. Actual
revenue proportion going to state governments, if any, would be determined by future legislation.
Combined state revenues for the Atlantic coast states would reach approximately $4.5 billion per year
by 2035, given that assumption.
Atlantic oil can boost investment and revenues – restricted now
DC 13 (Drilling Contractor is the official magazine of the international association of drilling contractors, “Study: Development offshore US
Atlantic could add $195 billion in investment”; 12/11/2013; http://www.drillingcontractor.org/study-development-offshore-us-atlantic-couldadd-195-billion-in-investment-27151)
Oil and gas development off the Atlantic coast has been restricted since the 1980s. Only 51 exploratory
wells were drilled in the 1970s and 1980s, mainly in shallow water. A lease sale off the coast of Virginia
was planned for 2011 but was subsequently canceled. No lease sales in the Atlantic OCS are currently
scheduled. The next five-year plan of OCS lease sales, yet to be released, would start in 2017. According
to the study, oil and natural gas development in the Atlantic OCS between 2017 and 2035 could: Create
nearly 280,000 new jobs along the East Coast and across the country. Result in an additional $195 billion
in new private investment. Contribute up to $23.5 billion per year to the US economy. Add 1.3 million
barrels of oil equivalent per day to domestic energy production, which is about 70% of current output
from the Gulf of Mexico. Generate $51 billion in new revenue for the government. “Oil and natural gas
production off our Atlantic coast is a potential gold mine,” API Director of Upstream and Industry
Operations Erik Milito said. “Developing oil and natural gas in the Atlantic could put hundreds of
thousands of Americans to work, make us more energy secure and bring in needed revenue for the
government. But none of these benefits will appear unless the federal government follows prodevelopment energy policies.” The Obama administration has been considering whether to allow
seismic surveying in the Atlantic for the last five years and shortly will begin work on the next five-year
offshore leasing program. Americans stand to benefit if seismic surveying permits are approved and the
Atlantic and other offshore areas that have been kept off-limits are included in the next five-year leasing
program. “Major capital investments, job creation and revenue to the government would all begin years
before the first barrel goes to market,” Mr Milito said. “Expanding offshore energy production would
also send a strong signal to the energy markets that America is leading the world in developing energy
resources, which could help put downward pressure on prices.”
Oil is the last sector holding the economy together, but expansion now is key
Diana Furchtgott-Roth 14 is an editor at Real Clear Markets and former chief economist at US
department of labor, Real Clear Markets, “Oil Is Where the Growth Is, So Let's Drill”, 2/18/2014,
http://www.realclearmarkets.com/articles/2014/02/18/oil_is_where_the_growth_is_so_lets_drill_1009
08.html
The economy is stumbling along at 2 percent annual GDP growth and employment growth continues to
disappoint. One bright spot is energy, which is booming despite government obstacles. With more efficient regulation
America could increase energy production, and next week Senator Ted Cruz (R-TX) will release a bill to do just that. A soon-to-be-released
report by my Manhattan Institute colleague Mark Mills shows that even
though U.S. employment is still below
prerecession levels, jobs in oil and gas industries have grown by 40 percent since 2007, the start of the recession.
With oil and gas adding $300 billion to $400 billion every year to the economy, Mills suggests that the United States might still be
in a recession if not for oil and gas. About 1 million Americans work directly in oil and gas, and another
10 million work in jobs linked to the industry, producing steel for pipelines, supertankers, and railcars. This job creation is not
the result of "Big Oil," the five largest oil and gas companies, but from 20,000 small and midsize companies. Each employs fewer than 15
people, on average. In addition, foreign companies are expanding, or relocating to the United States, due to inexpensive energy. An Egyptian
firm is investing in a billion-dollar fertilizer plant in Iowa, and a South Korean tire company wants to build an $800 million factory in Tennessee.
Oil production has risen by 60 percent since the end of the recession in 2009. This growth has been in spite of federal government help, rather
than because if it.
Imagine how much more growth could have occurred if applications for permits for oil and
gas exploration, as well as refinery construction, were approved in a more speedy manner. "With so many Americans
still unemployed or underemployed in the wake of the Great Recession, it is unconscionable that our government is not doing everything it can
to get out of the way of any part of the economy where there is growth," Mills told me. He continued, "In
the last few years, the oil
and gas sector, dominated by small and mid-sized companies, tens of thousands of them, has achieved
astounding and broad-based job creation, more than in any other single segment of the economy."
Tapping protected oil reserves is key to an energy revolution – political support exists
Dick Alario 13 is CEO of Key Energy Services, Chairman Ex-Officio of the National Ocean Industries
Association, member of the American Association of Drilling Engineers and the Petroleum Equipment
Suppliers Association; Houston Chronicle; “Time to remove roadblocks to offshore energy production”;
7/16/13, http://www.chron.com/opinion/outlook/article/Time-to-remove-roadblocks-to-offshoreenergy-4668833.php
Thanks to technology, energy companies can now safely and cost-effectively recover domestic oil and
natural gas from shale onshore and from deep reservoirs offshore. The industry has become a jobs machine: It's
one of a handful of sectors that saw double-digit percent job growth between 2010 and 2012, according to an analysis by
CareerBuilder. Add the indirect jobs from the U.S. energy boom, and the number of new jobs rises well into the
hundreds of thousands. Tapping unconventional energy on land is driving much of this remarkable growth, but there is
tremendous potential to increase energy production off our nation's shores as well - from oil, gas and wind - in the
Outer Continental Shelf. Unfortunately, the federal government has placed 87 percent of the outer shelf off the
table to oil and gas exploration. Leaders in Congress are trying to jump start increased offshore oil and gas production with at least
two important pieces of legislation. Last month, the U.S. House of Representatives passed the Offshore Energy and Jobs Act, sponsored Rep.
Doc Hastings, R-Wash. This legislation would require the Obama administration to scrap its current restrictive five-year outer shelf oil and gas
leasing plan and expand lease sales in untapped
offshore areas estimated to hold at least 2.5 billion barrels of oil
and 7.5 trillion cubic feet of natural gas. (Note that these estimates are based on decades-old seismic data, and are therefore
likely underestimates.) The act would require lease sales in new areas, including offshore Virginia, South Carolina, southern California and in
Alaska's North Aleutian Basin. Thus, states
like South Carolina and Virginia, where broad bipartisan support exists
for offshore energy exploration and production, would finally be allowed to participate in America's energy
revolution.
Econ Impacts
US economic decline makes global nuclear war likely
O’Hanlon and Lieberthal 12 Michael O’Hanlon, Ph.D., is a senior fellow at The Brookings
Institution, specializing in defense and foreign policy issues. Kenneth Lieberthal, Ph.D., is a senior fellow
in Foreign Policy and Global Economy and Development at Brookings. “The real national security threat:
America's debt,” July 3, LA Times Op-Ed, http://articles.latimes.com/2012/jul/03/opinion/la-oe-ohanlonfiscal-reform-20120703
American economic weakness undercuts U.S. leadership abroad. Other countries sense our
weakness and wonder about our purported decline. If this perception becomes more widespread, and
the case that we are in decline becomes more persuasive, countries will begin to take actions that reflect their skepticism about America's
future. Allies and friends will doubt our commitment and may pursue nuclear weapons for their own
security, for example; adversaries will sense opportunity and be less restrained in throwing around their
weight in their own neighborhoods. The crucial Persian Gulf and Western Pacific regions will likely become less stable. Major war will become
more likely.
Lastly,
Economic crisis causes nuclear war
Walter Russell Mead 9, the Henry A. Kissinger Senior Fellow in U.S. Foreign Policy at the Council on
Foreign Relations, 2-4, 2009, “Only Makes You Stronger,” The New Republic,
http://www.tnr.com/politics/story.html?id=571cbbb9-2887-4d81-8542-92e83915f5f8&p=2
If current market turmoil seriously damaged the performance and prospects of India and China, the current crisis could join the Great Depression in the list of
economic events that changed history, even if the recessions in the West are relatively short and mild. The United States should stand ready to assist Chinese
and Indian financial authorities on an emergency basis--and work very hard to help both countries escape or at least weather any economic downturn. It may
test the political will of the Obama administration, but the United States must avoid a protectionist response to the economic slowdown. U.S. moves to limit
market access for Chinese and Indian producers could poison relations for years. For
billions of people in nuclear-armed countries to
emerge from this crisis believing either that the United States was indifferent to their well-being or that it had
profited from their distress could damage U.S. foreign policy far more severely than any mistake made by George W.
Bush. It's not just the great powers whose trajectories have been affected by the crash. Lesser powers like Saudi Arabia and Iran also face new constraints. The
crisis has strengthened the U.S. position in the Middle East as falling oil prices reduce Iranian influence and increase the dependence of the oil sheikdoms on
U.S. protection. Success in Iraq--however late, however undeserved, however limited--had already improved the Obama administration's prospects for
addressing regional crises. Now, the collapse in oil prices has put the Iranian regime on the defensive. The annual inflation rate rose above 29 percent last
September, up from about 17 percent in 2007, according to Iran's Bank Markazi. Economists forecast that Iran's real GDP growth will drop markedly in the
coming months as stagnating oil revenues and the continued global economic downturn force the government to rein in its expansionary fiscal policy. All this
has weakened Ahmadinejad at home and Iran abroad. Iranian officials must balance the relative merits of support for allies like Hamas, Hezbollah, and Syria
against domestic needs, while international sanctions and other diplomatic sticks have been made more painful and Western carrots (like trade opportunities)
have become more attractive. Meanwhile, Saudi Arabia and other oil states have become more dependent on the United States for protection against Iran,
and they have fewer resources to fund religious extremism as they use diminished oil revenues to support basic domestic spending and development goals.
None of this makes the Middle East an easy target for U.S. diplomacy, but thanks in part to the economic crisis, the incoming administration has the chance to
try some new ideas and to enter negotiations with Iran (and Syria) from a position of enhanced strength. Every crisis is different, but there seem to be reasons
why, over time, financial crises on balance reinforce rather than undermine the world position of the leading capitalist countries. Since capitalism first emerged
in early modern Europe, the ability to exploit the advantages of rapid economic development has been a key factor in international competition. Countries that
can encourage--or at least allow and sustain--the change, dislocation, upheaval, and pain that capitalism often involves, while providing their tumultuous
market societies with appropriate regulatory and legal frameworks, grow swiftly. They produce cutting-edge technologies that translate into military and
economic power. They are able to invest in education, making their workforces ever more productive. They typically develop liberal political institutions and
cultural norms that value, or at least tolerate, dissent and that allow people of different political and religious viewpoints to collaborate on a vast social project
of modernization--and to maintain political stability in the face of accelerating social and economic change. The vast productive capacity of leading capitalist
powers gives them the ability to project influence around the world and, to some degree, to remake the world to suit their own interests and preferences. This
is what the United Kingdom and the United States have done in past centuries, and what other capitalist powers like France, Germany, and Japan have done to
a lesser extent. In these countries, the social forces that support the idea of a competitive market economy within an appropriately liberal legal and political
framework are relatively strong. But, in many other countries where capitalism rubs people the wrong way, this is not the case. On either side of the Atlantic,
for example, the Latin world is often drawn to anti-capitalist movements and rulers on both the right and the left. Russia, too, has never really taken to
capitalism and liberal society--whether during the time of the czars, the commissars, or the post-cold war leaders who so signally failed to build a stable, open
system of liberal democratic capitalism even as many former Warsaw Pact nations were making rapid transitions. Partly as a result of these internal cultural
pressures, and partly because, in much of the world, capitalism has appeared as an unwelcome interloper, imposed by foreign forces and shaped to fit foreign
rather than domestic interests and preferences, many countries are only half-heartedly capitalist. When crisis strikes, they are quick to decide that capitalism is
a failure and look for alternatives. So far, such half-hearted experiments not only have failed to work; they have left the societies that have tried them in a
progressively worse position, farther behind the front-runners as time goes by. Argentina has lost ground to Chile; Russian development has fallen farther
behind that of the Baltic states and Central Europe. Frequently, the crisis has weakened the power of the merchants, industrialists, financiers, and
professionals who want to develop a liberal capitalist society integrated into the world. Crisis
can also strengthen the hand of religious
extremists, populist radicals, or authoritarian traditionalists who are determined to resist liberal
capitalist society for a variety of reasons. Meanwhile, the companies and banks based in these societies are often less established and more
vulnerable to the consequences of a financial crisis than more established firms in wealthier societies. As a result, developing countries and
countries where capitalism has relatively recent and shallow roots tend to suffer greater economic and political
damage when crisis strikes--as, inevitably, it does. And, consequently, financial crises often reinforce rather than
challenge the global distribution of power and wealth. This may be happening yet again. None of which means that we can just sit back
and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring
messages as well. If
financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the
has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American
Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as
the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the
Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression,
what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United
States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.
Anglophone powers, so
Heg Advantage
Dependence Bad – Hegemony
US oil dependence is destroying our influence
U.S. Senate, Committee on Energy and Natural Resources, January 30, 2014, the Senate
Committee is in charge of discussing Energy and Natural Resources, “U.S. Crude Oil Exports: Opportunities And Challenges,”
https://www.hsdl.org/?view&did=750046
In this regard, U.S.
energy exports will weaken some of our adversaries such as Iran and Russia. US shale gas
has already played a key role in weakening Russia’s ability to wield an energy weapon over its European
customers by displacement. By significantly reducing US requirements for imported liquefied natural gas (LNG), rising US shale gas
production has increased alternative LNG supplies to Europe in the form of LNG displaced from the US
market, limiting some of Russia’s power. It has also already curbed Iran’s ability to tap energy diplomacy
as a means to strengthen its regional power or to buttress its nuclear aspirations by eliminating the need
for Iranian natural gas to potential importing customers by creating surpluses of alternative supplies.
This remarkable development, by allowing the U.S. to impose tighter sanctions, has brought Iran to the
negotiating table on limiting its nuclear program. Energy exports also improve our balance of trade. The
health of the US economy and fate of the US dollar come under pressure when rising oil prices raised
our massive oil import bill, worsening the US trade deficit.3 Such economic pressures are multiplied
when we are forced by oil dependence to deepen our military commitments in the Middle East, thereby
similarly adding to the US deficit. All this weakens the United States relative to China, which holds a
large chunk of US indebtedness and free rides off expensive US naval activities to guarantee the free
flow of oil from the Persian Gulf. Over time, shale development will reverse this strategic and economic disadvantage. As the years pass, it will be
the Chinese economy that is more exposed than the United States to Middle East developments. Citibank estimates that rising domestic shale oil and gas
production, by reducing oil imports and keeping “petro-dollars” inside the U.S. economy, will reduce the U.S. current account deficit by 1.2 to 2.4 percent of gross
domestic product (GDP) from the current value of 3 percent of GDP. Energy exports would enhance this trend by adding gains to the balance of trade. As energy
exports improve our global financial footing, it will not only give us an upper hand with China, which will still be highly dependent on foreign oil imports, but it
could even allow the United States the luxury to regain its strong influence as a donor to global
institutions such as the World Bank and United Nations, again enhancing our national power and
influence. Finally, energy exports are already an important part of our free trade obligations to important
neighbors such as Mexico and Canada as well as more distant long-standing allies such as South Korea.
U.S. law requires the U.S. Department of Energy (DOE) to review and approve any natural gas exports to countries with which the United States does not have a free
trade agreement. Current rule making requires that exports to our free trade partner countries be approved expeditiously. For nations not covered by applicable
free trade agreements, the review is supposed to lead to approval unless the project is determined to “not be consistent with the public interest.” As a practical
matter, the
United States is already an exporter of domestic natural gas. The U.S. exported a total of 436.3 bcf of natural gas in
the first quarter of 2013, mainly to Canada and Mexico. Canada has also been a major buyer of U.S. condensate. U.S. pipeline gas exports to Mexico are important
to Mexico’s economic health and to border relations and therefore it is unlikely the United States would ever consider cutting off Mexico’s gas trade with us. South
Korea now holds a Free Trade Agreement (FTA) with the United States. South Korea has indicated its desire to import U.S. Gulf coast LNG. Under normal economic
conditions, it would not be in the U.S. economic and foreign policy interest to fail to honor our free trade obligations to South Korea while continuing to honor our
obligations to Mexico. By extension, the United States, as an established exporter of natural gas, should not be turning away close allies like Japan and Europe.
Since U.S. trade with Asia is important to our economic health, on balance it would not be in the U.S.
interest to turn down Asian trading partners wanting to expand already massive trade to include natural
gas, especially given that a preponderance of analysts have concluded that U.S. shale resources are large
enough to minimize the pricing impact of LNG exports from the United States. This logic could also apply
to refined petroleum products and condensates, which are already an important part of our current
foreign trade.
Drilling Solves Hegemony
Expanded offshore drilling is key to hegemony – every lease is key
Brian Straessle, 3-19-2014, "API: Gulf Lease Sales Show Benefits of Opening Atlantic to Oil & Gas
Activity," No Publication, http://www.api.org/news-and-media/news/newsitems/2014/mar-2014/apigulf-lease-sales-show-benefits-of-opening-atlantic-to-oil-gas-activity
Offshore lease sales today in the Central and Eastern Gulf of Mexico highlight what Americans could gain
by opening additional areas to offshore oil and natural gas development. “Every lease sale held in the
U.S. strengthens our hand as an energy superpower,” said API Director of Upstream and Industry
Operations Erik Milito. “Offshore lease sales have raised more than $17.3 billion for the government
over the last ten years and allowed our industry to create more jobs and produce more energy here at
home. Holding lease sales in the Atlantic and more of the Eastern Gulf of Mexico would make America
stronger economically and diplomatically.” Opening the Atlantic Outer Continental Shelf to oil and
natural gas development in the government’s next five-year offshore leasing plan could create nearly
280,000 new jobs, raise $51 billion in new revenue for the government, and add up to 1.3 million barrels
of oil equivalent per day to domestic energy production – which is about 70 percent of current output
from the Gulf of Mexico – according to a study by Quest Offshore Resources.
US energy production is key to cement US power
Robert D. Kaplan, Chief Geopolitical Analyst for Stratfor, 4-4-2014, “The Geopolitics Of Energy,”
Stratfor/Forbes, http://www.forbes.com/sites/stratfor/2014/04/04/the-geopolitics-of-energy/
Geopolitics is the battle for space and power played out in a geographical setting. Just as there are
military geopolitics, diplomatic geopolitics and economic geopolitics, there is also energy geopolitics. For
natural resources and the trade routes that bring those resources to consumers is central to the study of
geography. Every international order in early modern and modern history is based on an energy
resource. Whereas the Age of Coal and Steam was the backdrop for the British Empire in the 18th and
19th centuries, the Age of Petroleum has been the backdrop for the American Empire from the end of
the 19th to the early 21st centuries. And indeed, just after other countries and America’s own elites
were consigning the United States to a period of decline, news began to emerge of vast shale gas
discoveries in a host of states, especially Texas. The Age of Natural Gas could make the United States the
world’s leading geopolitical power well into the new century. Mohan Malik, a professor at the AsiaPacific Center for Security Studies in Honolulu, has for years been studying the geopolitics of energy. He
has drawn, in conceptual terms, a new world map dominated by a growing consumer market for energy
in Asia and a growing market for production in the United States. “Asia has become ‘ground zero’ for
growth” as far as the consumption of energy is concerned, writes Malik. His research shows that over
the next 20 years, 85 percent of the growth in energy consumption will come from the Indo-Pacific
region. Already, at least a quarter of the world’s liquid hydrocarbons are consumed by China, India,
Japan and South Korea. According to the World Energy Outlook, published by the International Energy
Agency, China will account for 40 percent of the growing consumption until 2025, after which India will
emerge as “the biggest single source of increasing demand,” in Malik’s words. The rate of energy
consumption growth for India will increase to 132 percent; in China and Brazil demand will grow by 71
percent, and in Russia by 21 percent. Malik explains that the increase in demand for gas will overtake
that for oil and coal combined. Part of the story here is that the Indo-Pacific region will become
increasingly reliant on the Middle East for its oil: By 2030, 80 percent of China’s oil will come from the
Middle East, and 90 percent in the case of India. (Japan and South Korea remain 100 percent dependent
on oil imports.) China’s reliance on the Middle East will be buttressed by its concomitant and growing
dependence on former Soviet Central Asia for energy. While the Indo-Pacific region is becoming more
energy dependent on the Middle East, in the other hemisphere the United States is emerging as a global
energy producing giant in its own right. Malik reports that U.S. shale oil production will more than triple
between 2010 and 2020. And were the United States to open up its Atlantic and Pacific coastlines to
drilling, he says oil production in the United States and Canada could eventually equal the consumption
in both countries. Already, within a decade, shale gas has risen from 2 percent to 37 percent of U.S.
natural gas production. The United States has now overtaken Russia as the world’s biggest natural gas
producer. Some estimates put the United States as overtaking Saudi Arabia as the world’s largest oil
producer by the end of the current decade, though this is unlikely. Malik observes that this would mark
a return to the pre-1973 Yom Kippur War period of American energy dominance. When combined with
Canadian oil sands and Brazil’s oil lying beneath salt beds, these shifts have the potential to make the
Americas into the “new Middle East” of the 21st century, though we need to remember that U.S. oil
production may be in decline after 2020. At the same time, Russia is increasingly shifting its focus of
energy exports to East Asia. China is on track to perhaps become Russia’s biggest export market for oil
before the end of the decade, even as Russian energy firms are now developing a closer relationship
with Japan in order to hedge against their growing emphasis on China. We are thus seeing before our
eyes all energy routes leading to the Indo-Pacific region. The Middle East will be exporting more and
more hydrocarbons there. Russia is exporting more and more hydrocarbons to the East Asian realm of
the area. And North America will soon be looking more and more to the Indo-Pacific region to export its
own energy, especially natural gas. As the Indo-Pacific waters — that is, the Greater Indian Ocean and
the South China Sea — become the world’s energy interstate, maritime tensions are rising in the South
China Sea and in the adjacent East China Sea. The territorial tensions over which country owns what
geographical feature in those waters is not only being driven by potential energy reserves and fish
stocks in the vicinity, but also by the very fact that these sea lanes and choke points are of growing
geopolitical importance because of the changing world energy market. Europe, because of its aging
population, will probably not grow in relative importance in world energy markets, while the IndoPacific region of course will. Though northeast Asia, like Europe, is home to aging populations, that is not
the case — or at least is less the case — in the Indian Ocean world. Economic importance often leads
over time to cultural and political importance. Thus, the current tension between an economically and
demographically stagnant European Union and a troubled, autocratic Russia — energy rich, but less so in
comparative terms going forward — may actually expose the decline of Greater Europe, while North
America and the Indian Ocean world become the new pulsating centers of commerce. At the same time,
however, we may see, at least in the short term, an alliance of sorts between Russia and China,
undergirded by a growing energy relationship, as these two massive Eurasian states come into conflict
and competition with the democratic West. Power in Eurasia would, therefore, move to more southerly
latitudes, while the United States would have its own power reinvigorated by an even closer economic
relationship with Canada and Mexico (which is also energy rich). The Europe-centric world of the past
millennium may finally be passing as North America and the Greater Indian Ocean take center stage.
Dependence Bad – Terrorism
Oil dependence funds terrorism
Erick Stakelbeck, April 15, 2008, Erick Stakelbeck is a terror analyst, “How America Is Funding Terrorism,”
http://www.cbn.com/cbnnews/world/2008/July/How-America-Is-Funding-Terrorism-/
In the recent, Academy Award-winning film There Will Be Blood, one man's lust for oil - and the power and wealth that comes with it - eventually drives him mad.
The timing of the film is ironic, as the
United States' increasing reliance on foreign oil has some Americans
questioning their government's sanity. President Bush says America is "addicted to oil"--and that it's time for a
change. "America has got to change its habits," he told an audience at the International Renewable Energy Conference in March. " We've got to get
off oil...that dependency presents a challenge to our national security. In 1985, 20 percent of America's
oil came from abroad. Today that number is nearly 60 percent." Big Oil, Big Terror Much of that
imported oil comes from OPEC, a group made up of 13 of the world's most petroleum-rich nations:
Saudi Arabia, Libya, Kuwait, Iraq, Iran, the United Arab Emirates, Algeria, Angola, Indonesia, Nigeria,
Qatar Venezuela and Ecuador. While these nations may have an abundance of oil, most of them lack
democracy and human rights. Worse yet, some of them are state sponsors of terrorism -- and sworn
enemies of the United States. "With only one or two exceptions, OPEC is effectively dictatorships and
autocratic kingdoms," former C.I.A. director James Woolsey tells CBN News. Woolsey is a member of the
Set America Free Coalition. The group highlights the national security and economic implications of
America's dependence on foreign oil. "Ninety seven percent of our transportation is fueled by oil products of one sort or another," says
Woolsey. "And two thirds of the world's proven reserves of conventional oil are in the Middle East, and
about that share is also in the hands of OPEC." Gas and oil prices are currently at an all-time high - OPEC sets the market price. Woolsey
says Saudi Arabia is using a chunk of its oil wealth to spread its brand of radical Wahhabi Islam worldwide.
"The Saudis control about 90 percent of the world's Islamic institutions," he says. "And oil is the reason for
that." Iran's big oil profits mean big money for that country's nuclear program and its terrorist proxies,
Hezbollah and Hamas. Lately, Iranian Pesident Mahmoud Ahmadenijad has been joined by Venezuela's Hugo Chavez in threatening to help drive oil
prices up even further. Are Flex Fuels the Key? "The price of oil was $11 a barrel in 1999. It went to $22 a barrel in 2001 $50 a barrel in 2004. Now it's a $100 a
barrel," author Robert Zubrin points out. "And Hugo Chavez and Ahmadenijad are already talking about raising it to 200 dollars a barrel. And they will do that if we
don't have a competitive situation." Zubrin is the author of Energy Victory: Winning the War on Terror by Breaking Free of Oil. He says flex fuel vehicles are the way
to break what he calls OPEC's energy monopoly. "Only fuel choice can defeat OPEC," he tells CBN News. "And it's flex fuel vehicles that will create fuel choice in the
market." Flex fuel vehicles run on a mixture of gasoline and either ethanol or methanol. If you put 85 percent ethanol and, say, 15 percent gasoline into your car,
your gas bills are obviously going to be much lower. The
less gas your car requires, the less money goes to OPEC. One of the
attractive aspects of ethanol and methanol is that they're alcohol fuels that are easily produced. Ethanol can be made from corn, grains, barley, wheat, rice and
sugar cane. Corn is the main ingredient for ethanol in the United States. Ethanol and Food Prices But corn-based ethanol has plenty of critics. Critics have blamed
the trend toward corn-based ethanol fuel for recent food shortages in Third World countries like Haiti. They say the increased demand for biofuels like ethanol that
can be made from food has driven up food prices. Bush said last month that the increased production of corn-based ethanol is a good thing. He pointed out that the
in 2005, the U.S. became the world's leading ethanol producer. He, too, is concerned that corn ethanol is driving up food prices. Zubrin disagrees. "The retail price of
corn, as well as all other food commodities, is being driven up an average of 4 percent by increased fuel prices, which are up 40 percent this year, as well as
increased demand from China and India," says Zubrin. "The increased fuel prices affect retail food prices by increasing the price of production , transport, wages,
and packaging, which are the majority of cost of retail food," he says. There are other flex-fuel options as well, like methanol. It can be made from any kind of
biomass--like plants, crops, wood and agricultural waste, as well as coal, natural gas and even urban trash. According to Zubrin, these types of flex fuels could help
America become energy independent. "The U.S. Congress could destroy the oil cartel with the stroke of a pen simply by passing a law mandating that all new cars
sold in the U.S.-- not made, sold - be flex fueled," he says. "That it's able to run either on alcohol or gasoline." He says such legislation would force gasoline to
compete against flex fuels at the pump. "What this would do is put 50 million cars on the road in the United States within three years capable of running on
alcohol," he states. "If we made it the American standard that to sell a car here it has to be flex-fueled, that means all the foreign carmakers would switch their cars
over to flex fuel.and gasoline would be forced to compete at the pump against alcohol not only in Iowa, but in Argentina and Kenya and Poland: everywhere." New
Flex Automobiles Here in the U.S., Detroit's Big Three automakers are producing 24 different models of flex fuel cars this year. Still, flex fuel cars make up only about
3 percent of the new car market. "The reason why you can't find an ethanol pump is that there aren't any cars," says Zubrin. "At the gas station, if you have three
pumps, you're not going to dedicate them to a type of fuel that only 3 percent of the cars use. That would change if Congress passed a flex fuel mandate. But some
libertarian and conservative groups strongly oppose any government involvement in the energy sector. "The reason we subsidize ethanol.is not because of some
economic calculation. It's because politicians are in the business of buying votes. And a set of votes they would dearly love to buy are votes from farm states like
Iowa and Ohio and Pennsylvania and Michigan and Minnesota," Policy Analyst Jerry Taylor of the free-market Cato Institute told CBN News last year. There's also
been concern from environmental groups that as more land is cleared to make room for crops needed to make flex fuels, deforestation will occur in places like
Brazil, Zubrin argues that the increased demand for biofuels will actually be a boost to the economies of Third World countries that can easily produce them. Some
experts say there could eventually be other options as well, like hydrogen-based cars. But the debate continues over how best to handle America's energy needs in
a hostile world. "If we should be wondering who should be paying for, let's say, little Pakistani boys to go to madrassahs to be taught to be suicide bombers,"
suggests Woolsey. "If
you really wonder about that, move your rearview mirror a few inches before you get out
to charge your gasoline and look into your own eyes. And now you know. You and I are paying for it.
Oil imports fund terrorism
Institute for the Analysis of Global Security, 2004, The Institute for the Analysis of Global Security deals
with oil security for the world, “Fueling Terror,” http://www.iags.org/fuelingterror.html
Much has been reported about the complex system of terrorist financing and the money trail facilitating the
September 11 terror attacks. Individuals and charities from the Persian Gulf--mainly from Saudi Arabia--appear to be
the most important source of funding for terrorist organizations like Al-Qaeda. According to an October 2002 Council on Foreign Relations
report of an Independent Task Force on Terrorist Financing, Osama bin Laden and his men have been able to accumulate millions of dollars using
legitimate businesses such as charities, nongovernmental organizations, mosques, banks and other
financial institutions to help raise and move their funds. How does it work? Take Saudi Arabia for example. This Gulf monarchy is a rentier state in
which no taxes are imposed on the population. Instead, Saudis have a religious tax, the zakat, requiring all Muslims to give at least 2.5 percent of their income to charities. Many of the
charities are truly dedicated to good causes, but others merely serve as money laundering and terrorist financing apparatuses. While many Saudis contribute to those charities in good faith
What makes penetration and
control of money transactions in the Arab world especially difficult is the Hawala system--the unofficial
method of transferring money and one of the key elements in the financing of global terrorism. The system has
believing their money goes toward good causes, others know full well the terrorist purposes to which their money will be funneled.
been going for generations and is deeply embedded in the Arab culture. Hawala transactions are based on trust; they are carried out verbally leaving no paper trail. The Saudi regime has been
complicit in its people's actions and has turned a blind eye to the phenomenon of wealthy citizens sending money to charities that in turn route it to terror organizations. Furthermore, Saudi
government money funneled into madrassas where radical anti-Americanism is propagated has been instrumental in creating an ideological climate which generates terrorism. Former CIA
Barrels
and bombs It is no coincidence that so much of the cash filling terrorists' coffers come from the oil
monarchies in the Persian Gulf. It is also no coincidence that those countries holding the world's largest
oil reserves and those generating most of their income from oil exports, are also those with the
strongest support for radical Islam. In fact, oil and terrorism are entangled. If not for the West's oil money,
most Gulf states would not have had the wealth that allowed them to invest so much in arms
procurement and sponsor terrorists organizations. Consider Saudi Arabia. Oil revenues make up around 90-95% of total Saudi export earnings, 70%director James Woolsey described the Saudi-sponsored Wahhabism and Islamist extremism as "the soil in which Al-Qaeda and its sister terrorist organizations are flourishing."
80% of state revenues, and around 40% of the country's gross domestic product (GDP). In 2002 alone, Saudi Arabia earned nearly $55 billion in crude oil export revenues. Most wealthy Saudis
who sponsor charities and educational foundations that preach religious intolerance and hate toward the Western values have made their money from the petroleum industry or its
oil money
that enables Saudi Arabia to invest approximately 40% of its income on weapons procurement. In July 2005
subsidiaries. Osama bin Laden's wealth comes from the family's construction company that made its fortune from government contracts financed by oil money. It is also
undersecretary of the Treasury Stuart Levey testifying in the Senate noted “Wealthy Saudi financiers and charities have funded terrorist organizations and causes that support terrorism and
the ideology that fuels the terrorists' agenda. Even today, we believe that Saudi donors may still be a significant source of terrorist financing, including for the insurgency in Iraq." If Saudi
Iran, OPEC’s second largest oil producer, is
holder of 10 percent of the world’s proven oil reserves and has the world’s second largest natural gas
reserve. With oil and gas revenues constituting over 80 percent of its total export earning and 50
percent of its gross domestic product, Iran is heavily dependent on petrodollars. It is a hotbed of Islamic fundamentalism and
Arabia is the financial engine of radical Sunni Islam, its neighbor Iran is the powerhouse behind the proliferation of radical Shiite Islam.
supporter of some of the world’s most radical Islamic movements such as the Lebanese Hizballah. Iran’s mullahs are fully aware of the power of their oil. Its supreme leader Ayatollah Ali
As the world’s demand for oil
increases, Iran grows richer --Iran’s oil revenues have jumped 25 percent in 2005—and more than able
to snub the U.S. and its allies in their efforts to prevent Tehran from developing nuclear weapons. The
line between the barrel and the bomb is clear. It is oil wealth that enables dictatorial regimes to sustain
themselves, resisting openness, progress and power sharing. Some semi-feudal royal families in the Gulf
buy their legitimacy from the Muslim religious establishment. This establishment uses oil money to
globally propagate hostility to the West, modernity, non-Muslims, and women. This trend is likely to
continue. Both the International Energy Agency and the Energy Information Agency of the U.S. Department of Energy currently project a steady increase in world demand for oil
Khamenei warned in 2002: “If the West did not receive oil, their factories would grind to a halt. This will shake the world!”
through at least 2020. This means further enrichment of the oil-producing countries and continued access of terrorist groups to a viable financial network which allow then remain a lethal
threat to the U.S. and its allies. Drying the swamp There are many strategies proposed by counter-terrorism experts to obstruct terrorist financing. Many of them are effective and, indeed,
some of the steps that have been taken since September 11, such as freezing bank accounts and improving the scrutiny over international monetary transfers, contributed to a reduction in AlQaeda's financial maneuverability. But
the only way to deal with the problem strategically is to reduce the disposable
income and wealth generation capacity of terrorist supporters. Hence, America's best weapon against
terrorism is to decrease its dependency on foreign oil by increasing its fuel efficiency and introducing
next-generation fuels. If the U.S. bought less oil, the global oil market would shrink and price per-barrel
would decline. This would invalidate the social contract between the leaders and their people and stem the flow of resources to the religious establishment. It will likely increase
popular pressure for political participation, modernity and reformed political and social institutions. Reducing demand for Middle East oil would force
the petroleum-rich regimes to invest their funds domestically, seek ways to diversify their economies
and rethink their support for America's enemies. Only then financial support for terrorism could
radically diminish.
Oil dependence provides the wealth needed for terrorism
American Energy Independence, 2013, American Energy Independence is about transitioning
America to be independent dealing with energy, “Islam and Oil,”
http://www.americanenergyindependence.com/islam.aspx
Militant Islam is spreading throughout the world—financed by Middle East oil wealth "The rise of
terrorism by militant Islam against the United States and the West coincided with the rise in oil prices of
1979-80 and the subsequent transfer of hundreds of billions of dollars from the West to Muslim
countries." – Max Singer, senior fellow, The Hudson Institute. Muslim countries in the Middle East and North Africa are Islamic Republics. An Islamic Republic
is a Theocracy, a nation ruled by religious clerics [Although many Muslim countries claim to have various degrees of freedom, they continue to submit to the will of
their religious leaders, resulting in a legal system that is equal to a theocracy]. In contrast, the historically Christian countries of Europe and America have separated
the religious authority of the church from the legal system that governs the people, thereby ending Christian Theocracy in the western world. The nations
comprising the western world are no longer defined by religious beliefs—citizens of western societies are free to individually choose and practice their own beliefs
without fear of state censorship. Islamic fundamentalists, supporters of Islamic Republics, view western nations as a threat to their theocratic rule. The religious
customs practiced by extreme Muslim fundamentalists today can be compared to Christianity during the Medieval Inquisition: Religion by force, women regarded as
property, dissidents burned at the stake, theocratic leaders ruled. Much like the world that Osama Bin Laden and al-Qaeda call Islam. Islam is not a military threat;
but in its extreme form it does present an ideological threat to the modern world. Islamic terrorists will never conquer the United States or Europe with military
force; that is not their goal. Extreme Muslim fundamentalists (violent Jihadists) believe they can use terrorism to disrupt the Global Economy and thereby slow the
progress of modernization and freedom of religion. Islamic Jihad is a battle for the minds of men and women; with the goal of creating a world government known
as the Caliphate — a unified political, economic and religious world order — ruled by one man, a Caliph, the successor to Muhammad, Islam's prophet of God.
Muslim fundamentalists believe the Caliph will return the world to medieval Islam, using whatever means necessary. Islamic
terrorism feeds off of
the world's addiction to oil. Oil wealth in the hands of dictators and ideological extremists is financing
terrorism. Oil money flowing into the Middle East finances the militant Islamic ideology that is flowing
out of the Middle East, spreading around the world. The modern world trades its wealth for Middle East
oil enriching the sponsors of terrorism. For these reasons, the war against terrorism cannot be won
without Breaking Free of Oil Dependence. The Organization of Petroleum Exporting Countries (OPEC) produces about 40% of the world’s oil
today, which translates to OPEC getting 40 cents on every dollar paid for oil anywhere in the world. Current OPEC members are Algeria, Indonesia, Iran, Iraq, Kuwait,
Libya, Nigeria, Qatar, Saudi Arabia, UAE, and Venezuela. All are Islamic countries except Venezuela which has partnered with Iran. In the year 2007, over
700
billion dollars flowed into OPEC from oil hungry countries around the world. How much of that money was given to
support terrorist organizations? From September 2007 through October 2008, the world economy was rocked by the unprecedented
transfer of over one trillion dollars from European, Asian and American economies into Middle East
national treasuries in exchange for oil. Even with reduced, yet still high oil prices, OPEC countries received $600 billion from oil exports in 2009
and are expected to take in more than $800 billion in 2010. What many people do not see, is that it doesn’t matter where the oil comes from. If the oil comes from
a well in Wyoming, California, Texas, Canada, Mexico, Russia, or the North Sea it doesn’t make any difference because oil
is a global commodity. The
price of oil traded on the world market is the same for everyone in the world. Demand anywhere increases demand everywhere. So, because 40% of the world's oil
comes from OPEC, it is always true that OPEC gets 40 cents on every dollar paid for oil. It averages out to that fact. If global oil dependence (“The Petroleum
Economy”) continues at over 85 million barrels per day, and the price of oil remains around $70 per barrel, the global economy will pay out over 2 trillion dollars per
Islamic terrorism,
as a global threat to civilization, cannot sustain itself without the massive oil revenue that finances it. (That
year for oil. With 40¢ of every dollar going to OPEC, Islamic nations will receive over 800 billion dollars per year from the oil they sell.
does not mean their feelings and beliefs will not sustain, it just means they will have limited influence without the oil wealth.) Islamic militancy is emboldened by
the perception of power and dominance that Islam gains from the world’s dependence on oil – oil that the world must get from Arab countries. Eliminate
world oil dependence and the Islamic extremists will be deflated psychologically. Ronald Reagan is credited for
defeating Communism without firing a shot; by economically isolating and suffocating the Soviet Union, while at the same time enticing their leaders and people
toward freedom. In a similar way, initiating action toward achieving global independence from petroleum (as a source of energy) will lead to the defeat of Islamic
terrorism. Try to imagine what would have happened if Europe and America had been paying the Soviet Union one Trillion U.S. dollars every year, during the cold
war.
US oil dependence only helps terrorists
Frank H. Denton, March 2007, Frank H. Denton has a Ph.D. and served in the U.S. Foreign Service,
“Nexus—OIL and AL Qaeda,” http://www.americanenergyindependence.com/nexus.aspx
That question brings us to
the nexus of oil and Islamic violence. I will show with hard facts several patterns that are of great importance in
understanding our current conflict with Islamic Fundamentalists. The paragraphs above sketch in qualitative terms the nearly 1500 years of struggle and conflict
between Islam and the West on which the current tensions are built. However, with the decline of the Ottoman Empire, an economically weak Islam had little
choice but to put up with incursions from the West. During its several centuries of “dark ages” Islam engaged in relatively few wars, about one fifth the number of
wars fought by the West. Conflict was not absent but capacity to mobilize warriors, to arm them and to send them to war was very limited. The
receipt of
oil revenues by Middle Eastern countries set the stage for the Islamic Community to more often use
warfare to manage its conflicts, including those with the West. Islam's use of warfare increased dramatically in the 20th century.
Some might argue that it is spurious to make a connection between the rise in violence and the rise in oil revenues even though they occur together in time. I will
point out, to counter that argument, that the Islamic
increase in the use of warfare following the development of its
enhanced financial capacity mirrors closely a pattern shown throughout the world. New money,
especially unearned money, leads to a greater ability to use warfare and in consequence has repeatedly
lead to a greater use of warfare to manage conflicts of interest. This conclusion derives from the
experiences shown in the use of warfare for political purposes over the past six centuries. A data base of 1000
plus incidents of warfare was assembled for the analysis. Details of statistical manipulations of these data may be reviewed at
www.AmericanEnergyIndependence.com/warfare.aspx — The summary is in the following sentences. By century, for the five centuries from 1400 to 1900, there
were 14, 13, 13, 15 and 13 wars fought within the Islamic Community. This shows a remarkable stability in the use of warfare despite the many changes that took
place over this time. That stability is attributable to two regularities in political behavior. Conflicts of interest are numerous for all nations. Warfare
has
been the ultimate institution for managing those conflicts to achieve the most favorable results possible.
At a given level of financial, political and emotional capital there is a tendency for the frequency with
which warfare is used to be relatively stable. Conduct of warfare is expensive in financial, political and
emotional capital. An increase in any one of these elements of capital enhances the ability and/or
willingness to engage in warfare to achieve desired ends in conflicts. And from 1) above conflicts of interest are numerous
given ample need for forceful management. From the same tendency, the West showed a similar stability in warfare levels during 4 of these 5 centuries. However,
after four centuries of relative stability in the frequency of use of warfare, with the increased financial capacity resulting from the industrial revolution in the 19th
century, the West tripled its use of warfare. Islamic nations generally did not participate in the expansion of economic capacity that resulted from the industrial
revolution in the West. The economies of Islam remained backward and poor on into the early part of the 20th century. With stagnant economic capacity Islam
fought just 13 internal wars in the 19th century, almost exactly its average rate of use of warfare over the previous 400 years. That situation changed in the 20th
century. Oil
revenues began to accrue by the second decade of the 20th century. Did warfare use increase
in the 20th century? Yes! In the final three quarters of the century there were forty incidents of warfare
fought within Islam. These forty wars followed the initiation of exports of oil to the West. We see the
rate of use of warfare, after more than five centuries of remarkable stability, roughly quadrupled, far too
great an increase to be a statistical accident. Remember that the first oil was shipped from the Middle East (from Iran) in about 1912 while
the first Saudi oil revenues came from the selling of oil concessions in the 1920s. Again a rhetorical question to further explore this relationship, did Islam’s
use of warfare grow during the century as oil revenues increased? Again, emphatically Yes! For these purposes I
switch from number of wars fought to a ratio – the ratio of wars fought by Islamic nations to those fought by Western nations. In the first third of the 20th century
that ratio stood at about 0.40, somewhat above its average of the prior century. By the middle of the 20th Century the ratio increased to 0.80 and in final third Islam
finally fought more wars than the West, bringing the ratio of its wars to those of the West to 1.20. Both groups showed stable warfare use rates for many centuries
followed by a surge in wars when financial capacity suddenly grew. Let me cite a few other cases to finally put to rest the assertions of the skeptics that this is
merely an accident of history. The
rise in warfare use by Islam following the increase in oil revenues replicates that
of Spain which almost doubled its involvement in warfare following the acquisition of the gold and silver
of the New World. In a similar pattern sparsely populated Sweden rose to prominence in Europe’s religious wars following its exploitation and sale of its
high quality iron ore. Even where the increased revenues occurred as a result of increases in earning capacity, the availability of more money has been followed by a
more frequent use of warfare. As noted above, the West as a group more than tripled its frequency of use of warfare following the acquisition of new wealth
created by the industrial revolution. Within the West, the UK doubled its fighting of wars as it lead the industrial revolution. More recently the
U.S. has
become a leading nation in the use of warfare as it attained pre-eminence in the economic sphere. Asia, as
for Islam, did not experience the industrial revolution in the 19th century, nor did Asian nations in general have large oil deposits to generate unearned revenues.
Asian nations began to modernize their economies in the second half of the 20th century; by that time their overall frequency in the use of warfare almost doubled.
These are facts from an exhaustive listing of warfare incidents and the pattern is universal and essentially cannot be refuted. Apart from the empirical relationships,
logic supports the conclusion. Wars are expensive to fight. In the case of Spain and Sweden the historical record shows how the kings struggled to develop the
revenues (from sales of royal lands, new taxes, borrowings, and so forth) required to fight the wars they wished to fight. Despite efforts to restrict its uses, warfare
remains an instrument for the protection and/or projection of interests. Nations and others turn to warfare and violence when their interests, in their judgments, so
require it — to the extent they can afford to. The conflict of Islam with the West coincides with the founding of the religion nearly 1500 years ago. Perhaps it is an
intrinsic fault of our democratic systems that our focus is on domestic affairs, at least until the external crisis arrives at our doorstep. If our leaders had been
reasonably alert they would have seen Al Qaeda on the horizon certainly by 1950 and perhaps could have ameliorated the conflict somewhat. That foresight need
not have been based solely on the expectation that past patterns would be repeated as argued above; there were specific precursors that could be observed as
taking place. For example, it is generally accepted that Islamic Fundamentalism of this century has its roots in the thinking of Wahabists in Saudi Arabia. The official
Saudi government weekly Ain al-Yaqeen records the spread of Wahabi thinking: The cost of King Fahd’s efforts in this field have been astronomical, amounting to
many billions of Saudi Riyals. ... some 210 Islamic centers wholly or partly financed by Saudi Arabia, more than 1,500 mosques and 202 colleges and 2,000 schools in
Europe, North and South America, Australia and Asia. It is accepted that King Fahd promoted a puritanical and intolerant view of the Islamic religion in an effort to
stabilize his newly formed country and to build support for the royal family. Did he see the ultimate consequences? In hind sight it seems inevitable that the Islamic
reformists that were being sponsored would follow a path similar to those followed by revolutionaries since the beginning of recorded history. Believers seeking to
make their place in history must mobilize enough of society to force their message on the rest. A tried and true method is to demonize a plausible external entity.
For Bin Laden and company Christianity and thus the West was, given the history of conflict with Islam, the inevitable demon target. And as the U.S. became the
dominant actor of the West, just as inevitably we became the Great Satan, a Shia term but one that conveys the Al Qaeda frame of reference well enough. We know
that Saudi
Arabia has practically no revenues except those derived from oil. We know that Saudi in
addition to supporting the spread of Wahabist views, also largely financed the formation of Al Qaeda in
its early years. We know this for the U.S. cooperated with the Saudi’s in promoting resistance to the Soviet incursion into Afghanistan and from this came
Bin Laden’s brainchild. Here the causal connection of oil to Al Qaeda is well documented. Our intelligence service
has repeatedly stated over the years that Iranian funds support much of the violence against the West
and against Israel. Terrorists do not come for free; they must be trained, equipped and fed. Families
must be supported for many in the terrorist fold. Travel funds are required to enable them to mobilize
and get from place to place. Often false papers are required. The terrorists need their sources of
intelligence as well. These all require money. The following two quotes from Newsweek, presuming the quotes are not planted, give the
direct causal relation between Iran and the Mahdi army in Iraq and Hizbullah in Lebanon. Newsweek of July 24, 2006 “Many Lebanese owe a great deal to
Hizbullah’s clinics, schools and other basic social services in the areas it dominates – underwritten, of course, by hundreds of millions of dollars from Iran.” Again
from this issue of Newsweek quoting a former member of Sadr’s forces in Iraq, “I used to fight for free, but today the Mahdi Army receives millions of dollars every
month from Iran in exchange for carrying out the Iranian agenda.” More recently there
have been many reports of Iran supplying
weapons and weapons technology to the insurgents in Iraq. The connection is so well known among the Palestinian that the
dominantly Sunni Palestinians have taken to calling the Hamas forces stooges of the Shia. Further development of the nexus seems akin to beating a dead horse, so I
rest my case in the belief that it meets the requirement of leaving no reasonable doubt. The consequences of the nexus are: We brought it [the use of violence]
onto ourselves. A
people with traditional enmity toward the West were fed vast infusions of money in
demanding they sell us the oil that lay under their sands. With traditional enmity exacerbated by recent colonial intrusions the
newly wealthy moved to demonize the West as part of their effort at resurrecting their once great empires. Let me add that the pattern of use of violence to
promote interests is no more a characteristic of Islam than it is of the West, if we use historical experience as the standard. To characterize our opponents as evil for
their use of warfare is historically inaccurate and likely to be dysfunctional for it makes sensible compromise much more difficult. Negotiating with an evil empire, if
that is the mind set, is a troubling and difficult exercise. Part Two Financing the Jihadists OVERVIEW In part one; I produced historical data demonstrating how our
imports of oil from the Middle East provided the catalysts for the development of Islamic Fundamentalism. In this section I produce data for recent years showing
that every event threatening political instability in the Middle East, whether the result of actions by them or by us, has produced huge increments in revenue for the
Middle East oil exporters, thereby enhancing the revenue base for the Jihadists. Just since the invasion of Iraq, the fear
premium on the price of oil has brought Saudi Arabia an increment of over $350 billion of income from its sale of oil. Iran has benefited by an added, above the
usual costs of oil, $100+ billion. This incremental income producing effect from terrorist initiatives and our responses is part of the reason why, as quoted below, the
National Intelligence Community concluded that the invasion of Iraq and the continuing operations in Afghanistan have actually strengthened the Jihadist
movements around the world. The data are there for all to see .
It is time that our policy makers see the obvious. PLAYING INTO
THEIR HANDS ONCE AGAIN It is said that Bin Laden hoped with terrorism to draw the West/America into ground combat on Islam’s home turf. It
appears that he misjudged his organization and Taliban allies’ abilities to combat America on the soil of Afghanistan. He was unable to replicate the successes
against the Soviets. However, America may have played into his hands in seeking to establish a new political paradigm for the Middle East in Iraq. The invasion of
Iraq is yet to prove successful and the passions it has aroused have enabled Al Qaeda to slowly resurrect itself in the Pathan tribal areas of Pakistan. In an
unclassified release (dated April, 2006) of a National Intelligence Estimate judging results since the invasion of Iraq the following assessments were made: We also
assess that the global Jihadist movement—which includes al-Qa’ida, affiliated and independent terrorist groups, and emerging networks and cells—is spreading and
adapting to counter terrorism efforts. Although we cannot measure the extent of the spread with precision, a large body of all-source reporting indicates that
activists identifying themselves as Jihadists, although a small percentage of Muslims, are increasing in both number and geographic dispersion. There are at least
two consequences of the U.S. incursions into the Islamic Homeland that add to the strength of the Jihadist movements around the world. The first and perhaps
most obvious is that the traditional emotions of dislike and fear of the West are heightened by the presence of American and other Western troops and by the
death and disruption their operations bring. The second consequence is that such incursions are seen by the oil markets as threatening more political instability in
this already volatile region. The perception of that threat leads to buyers bidding higher prices for oil to insure their supply is adequate. The Jihadists’ terrorist and
insurgent activities are in monetary terms cheap to conduct. Since many of their fighters see martyrdom rather than death if killed, from their perspective, these are
not human costs as we would see such deaths. In the environment of unstable oil prices, it is almost as if they were fighting a traditional war of plunder expecting
that the treasures (added oil revenues) acquired from the fight will produce added riches, not added costs as is true for us. These points cannot be carried too far,
but there is an element of truth in them that we have ignored at our cost. THE FEAR PREMIUM Hostility itself is not sufficient to produce active efforts to damage
the West. As discussed in Part I to undertake military operations, even the unconventional ones we term terrorism, requires funds. Before oil, Islam had few
resources and fought few wars. The
base oil income financed the development of the Jihadists, it is also clear that
the military struggle of the Jihadists with the West is producing yet more income for their Middle East
sponsors. Either an attack against Western targets by the Jihadists, or a retaliatory attack by the West produces a consistent
surge in oil prices – roughly a doubling or a fear of shortage premium in the $25 to $30 a barrel region. Some 35
years of oil price data are discussed below to document this relationship. Bin Laden becomes almost the master strategist. With the tragedy of 9/11, he drew us into
an attack near the heartland of Islam. Anger,
hatred, insecurity, fear were among the emotions this incursion
triggered in the Muslim world. Of perhaps greater consequence, it triggered the fear premium we now see in the
price of oil. In the four years since the invasion of Iraq a fear premium of close to $30 a barrel has been
incorporated into oil prices. At 8 million barrels per day of exports from Saudi Arabia, that nation has received $350 billion in added income courtesy
of the Al Qaeda attacks on the U.S., Iran has benefited by more than $100 billion over the same period. Apart from the sharply increased resource base that this
increase in oil revenues has produced for Al Qaeda, that organization has become something of an economic hero in Islam. Al Qaeda attacks the disliked sometimes
hated enemy and in the process generates vast unearned wealth for the Middle East. It is win-win, you attack the disliked West, the infidels, and the West pays you
exorbitant funds in consequence of that attack. The U.S. imports about the same quantity of oil that Saudi Arabia exports. The fear premium resulting from the
invasion of Iraq has cost the U.S. about $350 billion in added (above the price without the fear premium) costs for the import of oil. Not only does he, Bin Laden,
generate vast new wealth for Islam, he imposes huge costs on the enemy – the $350 billion does not of
course include the military costs which appear to be even higher. If we look more broadly as an Islam versus the West situation,
the invasion of Iraq has also cost the European countries about $600 billion in fear premium oil costs.
The West is lose-lose. We incur the damage and pay them to undertake operations that produce the
damage and then we spend more to strive to prevent them from doing it again. Because we have
chosen to rely on Middle East oil exporters to produce the energy material which our economy must
have we have ceded to them a power to damage us severely. By maintaining a just enough supply,
largely with Saudi Arabia leadership, the oil exporters have been able to establish a market for oil that is
highly unstable. Whether we act or they act, any event that might bring about a reduction in oil supply
produces an immediate market response as a fear premium, around $25 to $35 a barrel, immediately is
added to the resource base of the Jihadists. A LESSON LEARNED? It should have been foreseen that Islamic
militancy would inevitably rise as the West pumped its wealth into the Middle East to pay for the
imports of their oil. The effect of rising oil prices that would follow on any incursion into the Middle East
homeland was equally foreseeable. Those of us above the age of fifty or so can remember, vividly, the consternation, frustration and anger
experienced in the oil consuming nations during the 1970s. Following the 1973 war OPEC cut back on production and Saudi Arabia lead the Arab countries in
enforcing an embargo of oil going to nations supporting Israel. OPEC eventually raised prices by about 300 percent. A few years later the Iranian Revolution and
then Iraq’s attack on Iran raised oil prices by a further 100 percent. The world struggled to adjust to prices that in real terms were reaching an all time high. The
future should have been even more obvious at this point in time. This was a period of chaos, of learning. The Arabs learned both the leverage potential of the oil
weapon and the nature of the two edged sword as their price increases threatened their only source of wealth. The Western consumers learned to fear an
artificially induced shortage from a restricted array of suppliers, key members of which were enemies or foes of the West. Since that time the
oil market
has been in an unstable situation. Major suppliers of oil have strong incentives to retard development of
their reserves while at the same time keeping prices as high as possible while still low enough to
discourage development of alternative sources of energy – either non-OPEC oil or sources other than oil. Consumers
learned to stockpile reserves, but they seek to avoid accessing those reserves except in the most
extreme events with the consequence that the stockpiles are not large enough to greatly influence the
market. Consumers also learned to seek energy supplies not within the control OPEC. Unfortunately that
is a lesson that was unlearned as OPEC controlled its prices. Fundamentally the price power remains with the
suppliers who attempt to maximize their benefits from a “just enough” supply when all is well. The problem is
the fear premium that emerges when all is not well. The 1973 price rise and embargo induced shortages were the result of direct action by OPEC or Middle East
suppliers. Since then, the artificially induced just enough supply pattern has shifted (in the immediate sense) the onus of price increases onto the traders who
procure the marginal oil supplies required to keep inelastic markets operating. Saudi in particular can, and sometime does, decry the price increases as if they have
no responsibility. EARLY EMBARGO ATTEMPT It is important to review some of the history of the oil pricing markets in order to understand how we got here and the
threat that being here implies. It was no accident that the change in market power occurred in 1973. The war of Arab against Israeli of that year only provided a
convenient trigger. The embargo weapon had been tried earlier. The first meaningful effort to use the “oil weapon” followed on the “six day war”. In early 1967
Nasser of Egypt demanded the UN peace keeping force be removed from Egyptian territory and then in May he blockaded the Straits of Tiran effectively cutting off
shipping from the Israeli port of Eilat at the head of the Gulf of Aqaba. On June 5 in retaliation Israeli jets destroyed more than 400 aircraft on Egyptian, Syrian and
Jordanian airfields. After six days of warfare on June 10 a cease fire was signed. Quoting from Daniel Yergin’s The Prize1 “Among the Arabs, there had been talk for
more than a decade about wielding the “oil weapon.” Now was their chance. On June 6, the day after the fighting began Arab oil ministers formally called for an oil
embargo against countries friendly to Israel. Saudi Arabia, Kuwait, Iraq, Libya and Algeria thereupon banned shipments to the United States, Britain....” Internal
instability factors, especially in Libya, combined with general antagonism toward supporters of Israel and probably toward the West in general lead to this radical
action. Yergin states that by June 8, “the flow of Arab oil had been reduced by 60 percent.” A revolt in Nigeria further tightened the supply situation. The internal
situation in the producing countries soon stabilized somewhat and production and exports were increased although a shortfall of about 1.5 million barrels a day had
to be compensated for. In the 1960s America had a considerable shut-in capacity that in effect was being held as a reserve. The U.S. quickly increased its production
by close to a million barrels per day. Venezuela, Iran (the Shah was still in power) and Indonesia also increased production. “By July 1967...it was clear that the ‘Arab
oil weapon’ and the ‘selective embargo’ were a failure.” (Yergin) It was the excess capacity available in the United States that led to the failure of this early effort to
extort policy concessions by controlling oil supplies. THE UNSTABLE MARKET The surplus production capacity of the U.S. was not destined to endure. The surplus
capacity which had been about 4 million barrels per day in the early 60s was rapidly declining with increased consumption and slowly falling production. By 1973,
U.S. imports had surged to 6 million barrels a day and all previously shut in capacity was being fully used. Imports now exceeded 35 percent of consumption. The
pricing power situation was ripe for change. In the meantime some of the Middle Eastern Countries lead by Kuwait and Libya had been cutting back on their output.
World wide surplus capacity was now “just one percent of free world consumption,” a fundamentally unstable situation. In late October,1973, following America’s
announcement of a major arms resupply package to the teetering Israelis, Saudi Arabia announced it was cutting off all oil shipments to the U.S. The embargo was
unexpected and not prepared for. Worsening the situation was the Watergate Scandal that was then debilitating the American decision making processes. Lines at
gas stations quickly reached untenable lengths. Flexing their muscles oil ministers met in Tehran in late December and made a decision to raise prices to $11.65 a
barrel. The price had been under $3 a barrel in mid-1973. As Secretary of State Kissinger commented at the time, the power balance had been irrevocably changed.
Oil prices stayed steady at the new price level (roughly $40 per barrel in 2005 prices. But, a new world power balance remained as the result of a small margin
(around 1 to 3 percent) of surplus capacity compared to consumption. The new element of a volatile “fear premium” was now a reality. OPEC could, and would
influence prices in periods when tensions were what might be considered normal. In contrast it was the traders, encouraged by producers, who influenced prices
when instability threatened. A fear of reduced availability of the oil required for presumably inelastic markets resulted in surging oil prices whenever events, usually
events of violence, caused a nervous response among buyers. SINCE 1973 The first of the instability induced surges came a few years after 1973. Following its
revolution Iran in 1979 had attempted to kill the Iraqi deputy premier, attacked Iraq’s embassy in Rome and fomented unrest among Iraq’s Shiite population. Earlier
in December 1978, Iran had stopped exports of oil resulting in a reduction in oil supply of 4 to 5 percent. Yet more fear was generated as Iraq invaded Iran in Sept
1980. In response to the political instability and actual reduction in supplies, prices soared to more than double the price that had held since 1973. Daniel Yergin
asks and then answers—Why? “Why should a 4 or 5 percent loss of supplies have resulted in 150 percent increase in price? The answer was the panic.” This “panic”
response to any meaningful evidence of threats to supply of oil endures today, although it does empirically seem to have certain rule of thumb limits. In several
instances since 1980 when there has been the appearance of panic, prices have risen steeply for a time but then leveled off or declined by the time they had
doubled. Let me demonstrate. In order to show the statistics in constant prices, I rely in the following paragraphs on the price series published by Pierre Lemieux of
the University of Quebec. He computed prices from 1970 to 2006 using West Texas Intermediate as his indicator and corrected prices to their 2005 equivalent using
the CPI. I checked three other price series and found similar results. Limieux’s series covered the longest period with constant prices.2 For this first period of crisis
related to the Iran/Iraq situation prices were about $41/barrel in late 1978, climbing steeply thereafter to close to $95 a barrel in early 1980, a 130 percent increase
which is close to Yergin’s figure of 150 percent. Prices then fell steadily and at a rather uniform rate to about $50 a barrel in 1985. Of interest for later conclusions,
the first clear demonstration of oil as a weakness (as well as a strength) came in the early 1980s. Riding on the oil boom, Mexico had incurred massive international
debts and by 1982 was at the point of declaring it was unable to meet its debt payments. World financial markets teetered but a bailout arrangement was made and
the situation somewhat stabilized. Saudi Arabia was also seeing a threat to its economy as its revenues plummeted with the falling price of oil. From $120 billion in
1981 Saudi earnings declined to about $25 billion in 1985, a decline of close to 80 percent. Prices continued to fall. Iran’s earnings fell by almost half in early 1986
alone. OPEC’S CONSOLIDATION The price decline especially the precipitous fall of 55% in prices in the first half of 1986 resulted from several factors – increased
non-OPEC oil exploitation, slowed world economic growth, conservation and the beginning of the development of alternatives. The consumers were regaining some
control of the market. The price fall reversed all of these trends. The 55 MPG Honda ideal was replaced by the 17 mpg SUV. Exploration outside of the OPEC region
declined. The world economy recovered and programs for the development of alternative energy sources stagnated. Oil prices climbed back by $10 to $15 per
barrel then remained steady for several years. That 1986 decline ultimately resulted in the transfer of pricing power back to OPEC, primarily the Middle East
suppliers. Prices remained low and stable from 1986 until Iraq’s invasion of Kuwait in 1990. During that time alternative energy investments declined, world
economic activity grew and non-OPEC oil exploration lagged. In the face of fear that the invasion of Kuwait would result in supply interruptions, the price of about
$28 a barrel which had been maintained for several years leaped to more than $52 an increase of almost 100 percent, again approaching the doubling figure. The
surge was brief however, as a U.S. lead military coalition quickly drove the Iraqis back across the border. By mid 1991 prices were back under $30 and then slowly
declined to closer to $25 a barrel through 1998 when another fall occurred to about $18 a barrel. At this point new incidents pointing to possible future instability in
the Middle East began to come on line. Bin Laden issued his Fatwa against the U.S. in 1998. There were the embassy bombings in Africa late in that year and then
the Millennia threats as 2000 approached. In October 2000 there was the attack on the USS Cole. Tensions were rising and the fear premium began to take hold
once again. The $18 figure for early 1999 surged to almost $40 by late 2000, again bringing a rough doubling of prices. Prices soon fell back to their apparently
stable level of the mid $20s when the events of 9/11 hit. From a low of about $22 just before 9/11 prices surged to $38, almost doubling by late 2002. Prices then
fell briefly following the successes in Afghanistan to about $32, before surging to the range of $70 following the invasion of Iraq – again prices tended to rapidly
increase by about 100 percent. Prices have declined from their peak of 2006, but still remain high. To avoid too much detail, let me hit the high points. After 1973,
just under half of the time a stable price, 2005 prices, between $25 and $30 was sustained. There is even some evidence of a slight declining trend. I think that this is
a reasonable price range to consider as the market price for crude, given the limited competitive forces operating in the world oil market. In the 35 year period
there were also 8 to 9 years in which prices surged $20 to $40 above this “market” price. Those years are characterized by periods of instability related to the
Middle East – the invasion of Iran, the invasion of Kuwait, 9/11 and so forth. A fear premium of $25 to $30 a barrel is suggested by this history. That is, when there is
a fear of shortage of supply, the price tends to roughly double, before corrections are made. The fear premium cuts against us in two ways. It generates new
revenues for oil producers including those in the Middle East. A share of those new riches goes to Islamic Fundamentalists. The other edge of the sword is the
increase in oil import costs for the West. With oil trade in the multi-millions of barrels per day, we are talking vast sums of “fear premium” money. Within the
Middle East at large for this 8 or 9 year period the fear premium revenue has ranged somewhere in the multi-trillions of dollars. For the West the premium costs are
far larger since it pays the higher price for all of the oil it imports whether from the Middle East or elsewhere. It is an aside, but one that also has its relevance, the
fear premium produces leaders such as Chavez of Venezuela also intent on making his place in history by destabilizing world trade. THE DYNAMICS For simplicity of
communications I will personalize the Fundamentalists and refer to them as Bin Laden. The essence of the forces in operation here can be characterized as follows:
Bin Laden has
the initiative and chooses to attack or not. His attacks cost him a few hundred thousand or
perhaps millions of dollars and the lives of a few – which he sees as creating martyrs not as losses of lives. His
attack produces multi millions or even billions in new riches for the oil producers, in the Middle East and
elsewhere. His attack imposes multi billions of new oil costs on the West. The West responds, oil prices go
even higher. The West pays high military costs, both in people and money. The West generates more
enmity among Muslims by attacking their territory. It seems almost win-win for Bin Laden and lose-lose for the West.
Are we playing into his hands? I of course cannot answer that question. The results since 9/11 have certainly raised questions regarding whether we are playing by
his scenario or not. As noted above, the best minds in our intelligence community as of mid-2006 concluded our military interventions had worsened the situation,
presumably for the reasons cited above. SHATTERING THE VISION OF A MILITARY SOLUTION We have quite a bit of evidence that suggests our approach may well be
wrong. We
pour money into the hands of the enemy, we antagonize friends, we exacerbate Islamic
resentment of the West, we pay huge military and security costs and the results to date raise serious
doubts as to whether we are making progress in improving our security. The massive anger our nation felt toward the
Islamic terrorists after 9/11 is an inevitable human response. The feeling of American military supremacy is a natural response to some years as either the sole or
one of two super powers. But following those “natural” inclinations is not serving our interests and there has been more than enough evidence to lead us to that
conclusion. The friction between Islam and the West long predates the formation of the American Republic. But, as the inheritors of the mantle of leadership in the
West, we also inherited the heritage of past misdeeds and conflict that belong to Europe, not to us. This has lead to dysfunctional policies that date back for more
than a century. We have inherited the onus of Europe’s colonial ventures and have done little to show that our nation is not as the Europeans were. We
poured our wealth into the coffers of these “primitive” societies to secure their oil. Ignoring a vast body of historical data we
established pre-emptive warfare as our right to employ at our discretion, when we defined a threat as present. We made limited effort to establish a clear moral
ascendancy with our allies, our people and with the rest of the Western world. The resulting military confrontation has evolved in a manner that has enabled their
unconventional tactics to bring our hugely superior conventional military capacity into a standoff. Yet we persist in seeking to use conventional military power to
defeat this foe. A
BETTER WAY TO COUNTER ISLAMIC TERRORISM There is another way. When the West stops
buying their oil, the economies of the Middle East will collapse. They cannot drink the oil and they
cannot produce anything but poverty from their desert lands and ill organized economies. Energy
Independence is a better way to defeat Islamic Terrorism, one that incurs less risk and probably is no
more costly.
Obama indicates that oil dependence means an increased risk of terrorism
Maria Gavrilovic, July 11, 2008, Maria Gavrilovic is a producer, co-producer, and associate producer in different episodes
of 60 Minutes, “Obama Says Dependency on Foreign Oil Poses Terrorist Threat to U.S.,”
http://www.cbsnews.com/news/obama-says-dependency-on-foreign-oil-poses-terrorist-threat-to-us/
(DAYTON, OHIO) Barack Obama used a little bit of fear today to get his point across of the
dangers of U.S. dependency on foreign oil.
price of a barrel of oil is now one of the most dangerous weapons in the world," he said at a town hall meeting
on energy security. As the price of crude oil crept to $144.17 a barrel today, Obama said hostile nations could use oil profits to fund
terrorism. "The nearly $700 million a day we send to unstable or hostile nations also funds both sides of
the war on terror, paying for everything from the madrassas that plant the seeds of terror in young
minds to the bombs that go off in Baghdad and Kabul," Obama said. "Our oil addiction even presents a target for Osama bin
Laden, who has told al Qaeda, "focus your operations on oil, since this will cause [the Americans] to die off
on their own." Obama blamed the energy crisis, in part, on John McCain, calling on him to "look in the mirror" and acknowledge the failed policies. He said
"The
McCain blames Washington for the failed energy policies, adding that he agrees but, "the only problem is that out of those thirty years, Sen. McCain was one of
those politicians in Washington for twenty-six. And during the 26 years that he was there he's achieved little to help reduce our dependence on foreign oil." The
McCain campaign quickly fired back in a written statement, "The difference is Obama's 'Dr. No' approach believes that every energy source has a problem and John
McCain believes that every energy source can be part of the solution Americans need right now."
Hegemony Good Impacts
Decline of US leadership causes apolarity and global conflict – even perception of
decline causes lashout
Zbigniew Brzezinski 12, Professor of American Foreign Policy @ Johns Hopkins and a Scholar @ CSIS,
“After America,” Jan/Feb, Foreign Policy,
http://www.foreignpolicy.com/articles/2012/01/03/after_america?page=full
For if
America falters, the world is unlikely to be dominated by a single preeminent successor -- not even China.
International uncertainty, increased tension among global competitors, and even outright chaos would
be far more likely outcomes. While a sudden, massive crisis of the American system -- for instance, another financial crisis -would produce a fast-moving chain reaction leading to global political and economic disorder, a steady drift by
America into increasingly pervasive decay or endlessly widening warfare with Islam would be unlikely to produce, even by 2025, an effective global successor. No
single power will be ready by then to exercise the role that the world, upon the fall of the Soviet Union in 1991, expected the
United States to play: the leader of a new, globally cooperative world order. More probable would be a protracted
phase of rather inconclusive realignments of both global and regional power, with no grand winners and
many more losers, in a setting of international uncertainty and even of potentially fatal risks to global
well-being. Rather than a world where dreams of democracy flourish, a Hobbesian world of enhanced national security based
on varying fusions of authoritarianism, nationalism, and religion could ensue. The leaders of the world's
second-rank powers, among them India, Japan, Russia, and some European countries, are already assessing the potential impact of U.S. decline on their
respective national interests. The Japanese, fearful of an assertive China dominating the Asian mainland, may be thinking of closer links with Europe. Leaders in
India and Japan may be considering closer political and even military cooperation in case America falters and China rises. Russia, while perhaps engaging in wishful
thinking (even schadenfreude) about America's uncertain prospects, will almost certainly have its eye on the independent states of the former Soviet Union. Europe,
not yet cohesive, would likely be pulled in several directions: Germany and Italy toward Russia because of commercial interests, France and insecure Central Europe
in favor of a politically tighter European Union, and Britain toward manipulating a balance within the EU while preserving its special relationship with a declining
United States. Others may
move more rapidly to carve out their own regional spheres: Turkey in the area of the old Ottoman
Empire, Brazil in the Southern Hemisphere, and so forth. None of these countries, however, will have the requisite combination of economic, financial,
technological, and military power even to consider inheriting America's leading role. China, invariably mentioned as America's prospective successor, has an
impressive imperial lineage and a strategic tradition of carefully calibrated patience, both of which have been critical to its overwhelmingly successful, severalthousand-year-long history. China thus prudently accepts the existing international system, even if it does not view the prevailing hierarchy as permanent. It
recognizes that success depends not on the system's dramatic collapse but on its evolution toward a gradual redistribution of power. Moreover, the basic reality is
that China is not yet ready to assume in full America's role in the world. Beijing's leaders themselves have repeatedly emphasized that on every important measure
of development, wealth, and power, China will still be a modernizing and developing state several decades from now, significantly behind not only the United States
but also Europe and Japan in the major per capita indices of modernity and national power. Accordingly, Chinese leaders have been restrained in laying any overt
claims to global leadership. At some stage, however, a
more assertive Chinese nationalism could arise and damage China's
international interests. A swaggering, nationalistic Beijing would unintentionally mobilize a powerful
regional coalition against itself. None of China's key neighbors -- India, Japan, and Russia -- is ready to acknowledge China's entitlement to
America's place on the global totem pole. They might even seek support from a waning America to offset an overly assertive China. The resulting
regional scramble could become intense, especially given the similar nationalistic tendencies among China's
neighbors. A phase of acute international tension in Asia could ensue. Asia of the 21st century could then begin to resemble Europe of
the 20th century -- violent and bloodthirsty. At the same time, the security of a number of weaker states located
geographically next to major regional powers also depends on the international status quo reinforced by America's global preeminence -and would be made significantly more vulnerable in proportion to America's decline. The states in that exposed position -including Georgia, Taiwan, South Korea, Belarus, Ukraine, Afghanistan, Pakistan, Israel, and the greater
Middle East -- are today's geopolitical equivalents of nature's most endangered species. Their fates are closely tied to the nature of
the international environment left behind by a waning America, be it ordered and restrained or, much more likely, self-serving
and expansionist. A faltering United States could also find its strategic partnership with Mexico in jeopardy. America's economic resilience and political stability have
so far mitigated many of the challenges posed by such sensitive neighborhood issues as economic dependence, immigration, and the narcotics trade. A
decline
in American power, however, would likely undermine the health and good judgment of the U.S.
economic and political systems. A waning United States would likely be more nationalistic, more defensive about its
national identity, more
paranoid about its homeland security, and less willing to sacrifice resources for the sake of others' development.
The worsening of relations between a declining America and an internally troubled Mexico could even give rise to a particularly ominous phenomenon: the
emergence, as a major issue in nationalistically aroused Mexican politics, of territorial claims justified by history and ignited by cross-border incidents. Another
consequence of American decline could be a corrosion of the generally cooperative management of the
global commons -- shared interests such as sea lanes, space, cyberspace, and the environment, whose
protection is imperative to the long-term growth of the global economy and the continuation of basic
geopolitical stability. In almost every case, the potential absence of a constructive and influential U.S. role would fatally
undermine the essential communality of the global commons because the superiority and ubiquity of
American power creates order where there would normally be conflict.
Heg solves great power war
Khalilzad 11 – Zalmay Khalilzad, the United States ambassador to Afghanistan, Iraq, and the United
Nations during the presidency of George W. Bush and the director of policy planning at the Defense
Department from 1990 to 1992, February 8, 2011, “The Economy and National Security; If we don’t get
our economic house in order, we risk a new era of multi-polarity,” online:
http://www.nationalreview.com/articles/259024/economy-and-national-security-zalmay-khalilzad
We face this domestic challenge while other major powers are experiencing rapid economic growth.
Even though countries such as China, India, and Brazil have profound political, social, demographic, and
economic problems, their economies are growing faster than ours, and this could alter the global
distribution of power. These trends could in the long term produce a multi-polar world. If U.S.
policymakers fail to act and other powers continue to grow, it is not a question of whether but when a
new international order will emerge. The closing of the gap between the United States and its rivals
could intensify geopolitical competition among major powers, increase incentives for local powers to
play major powers against one another, and undercut our will to preclude or respond to international
crises because of the higher risk of escalation. The stakes are high. In modern history, the longest period
of peace among the great powers has been the era of U.S. leadership. By contrast, multi-polar systems
have been unstable, with their competitive dynamics resulting in frequent crises and major wars among
the great powers. Failures of multi-polar international systems produced both world wars. American
retrenchment could have devastating consequences. Without an American security blanket, regional
powers could rearm in an attempt to balance against emerging threats. Under this scenario, there would
be a heightened possibility of arms races, miscalculation, or other crises spiraling into all-out conflict.
Alternatively, in seeking to accommodate the stronger powers, weaker powers may shift their
geopolitical posture away from the United States. Either way, hostile states would be emboldened to
make aggressive moves in their regions. As rival powers rise, Asia in particular is likely to emerge as a
zone of great-power competition. Beijing’s economic rise has enabled a dramatic military buildup
focused on acquisitions of naval, cruise, and ballistic missiles, long-range stealth aircraft, and antisatellite capabilities. China’s strategic modernization is aimed, ultimately, at denying the United States
access to the seas around China. Even as cooperative economic ties in the region have grown, China’s
expansive territorial claims — and provocative statements and actions following crises in Korea and
incidents at sea — have roiled its relations with South Korea, Japan, India, and Southeast Asian states.
Still, the United States is the most significant barrier facing Chinese hegemony and aggression.
Terrorism Impacts
Nuclear terror causes extinction – equivalent to full-scale nuclear war
Owen B. Toon 7, chair of the Department of Atmospheric and Oceanic Sciences at CU-Boulder, et al.,
April 19, 2007, “Atmospheric effects and societal consequences of regional scale nuclear conflicts and
acts of individual nuclear terrorism,” online: http://climate.envsci.rutgers.edu/pdf/acp-7-1973-2007.pdf
To an increasing extent, people
are congregating in the world’s great urban centers, creating megacities with
populations exceeding 10 million individuals. At the same time, advanced technology has designed nuclear
explosives of such small size they can be easily transported in a car, small plane or boat to the heart of a city.
We demonstrate here that a single detonation in the 15 kiloton range can produce urban fatalities approaching
one million in some cases, and casualties exceeding one million. Thousands of small weapons still exist in the arsenals of the
U.S. and Russia, and there are at least six other countries with substantial nuclear weapons inventories. In all, thirty-three countries control
sufficient amounts of highly enriched uranium or plutonium to assemble nuclear explosives. A conflict between any of these countries involving
50-100 weapons with yields of 15 kt has the potential to create fatalities rivaling those of the Second World War. Moreover, even
a single
surface nuclear explosion, or an air burst in rainy conditions, in a city center is likely to cause the entire
metropolitan area to be abandoned at least for decades owing to infrastructure damage and radioactive contamination. As
the aftermath of hurricane Katrina in Louisiana suggests, the economic consequences of even a localized nuclear
catastrophe would most likely have severe national and international economic consequences. Striking
effects result even from relatively small nuclear attacks because low yield detonations are most effective against city centers where business
and social activity as well as population are concentrated. Rogue nations and terrorists
would be most likely to strike there.
on the U.S. by a small nuclear state, or terrorists supported by such a state, could
generate casualties comparable to those once predicted for a full-scale nuclear “counterforce” exchange
in a superpower conflict. Remarkably, the estimated quantities of smoke generated by attacks totaling about
one megaton of nuclear explosives could lead to significant global climate perturbations (Robock et al., 2007).
Accordingly, an organized attack
While we did not extend our casualty and damage predictions to include potential medical, social or economic impacts following the initial
explosions, such analyses have been performed in the past for large-scale nuclear war scenarios (Harwell and Hutchinson, 1985). Such a study
should be carried out as well for the present scenarios and physical outcomes.
Nuke terror threat is real --- multiple groups have demonstrated motive and there’s
plenty of avenues to obtain a bomb
Kenneth C. Brill 12, is a former U.S. ambassador to the I.A.E.A., and Kenneth N. Luongo, is president of
the Partnership for Global Security. Both are members of the Fissile Material Working Group, a
nonpartisan nongovernmental organization. “Nuclear Terrorism: A Clear Danger,”
www.nytimes.com/2012/03/16/opinion/nuclear-terrorism-a-clear-danger.html?_r=0
Terrorists exploit gaps in security. The current global regime for protecting the nuclear materials that
terrorists desire for their ultimate weapon is far from seamless. It is based largely on unaccountable, voluntary
arrangements that are inconsistent across borders. Its weak links make it dangerous and inadequate to
prevent nuclear terrorism. Later this month in Seoul, the more than 50 world leaders who will gather for the second Nuclear Security
Summit need to seize the opportunity to start developing an accountable regime to prevent nuclear terrorism. There is a consensus
among international leaders that the threat of nuclear terrorism is real, not a Hollywood confection. President
Obama, the leaders of 46 other nations, the heads of the International Atomic Energy Agency and the
United Nations, and numerous experts have called nuclear terrorism one of the most serious threats to
global security and stability. It is also preventable with more aggressive action. At least four terrorist
groups, including Al Qaeda, have demonstrated interest in using a nuclear device. These groups operate
in or near states with histories of questionable nuclear security practices. Terrorists do not need to steal
a nuclear weapon. It is quite possible to make an improvised nuclear device from highly enriched
uranium or plutonium being used for civilian purposes. And there is a black market in such material.
There have been 18 confirmed thefts or loss of weapons-usable nuclear material. In 2011, the Moldovan police
broke up part of a smuggling ring attempting to sell highly enriched uranium; one member is thought to remain at large with a kilogram of this
material.
Iran Advantage
Dependence Bad – US-Iran War
US oil dependence makes US-Iran war inevitable
Decker 13(Brett Decker interviewing General James Conway, former commandant of the United States Marine Corps and president of
the Marine Corps University, the senior operations officer on the Joint Chiefs of Staff, he was the principle advisor on the Iraq and Afghanistan
wars to the president of the United States, the National Security Council and the secretary of defense, member of the Energy Security
Leadership Council at Securing America’s Future Energy, “GEN. JAMES CONWAY: Oil dependence limits U.S. military options”, rare.us, July 29,
2013, https://rare.us/story/gen-james-conway-oil-dependence-limits-u-s-military-options/)
Decker: What are the military and national-security implications of the energy debate? Conway: To provide more
depth on this question, which I touched on above, I would categorize the military and national-security implications of oil dependence as direct
and indirect. First, there is the direct cost to our military of mitigating the risk of oil supply disruptions, a tremendous burden that we have been
forced to shoulder because of oil dependence. A RAND Corporation study estimated the cost at between $67.5 billion and $83 billion annually.
Also, as global oil prices have increased, Defense Department spending on petroleum fuel has risen from an average of $3.75 billion between
1999 and 2003 and $17.5 billion in 2011. It goes without saying that this has been a disaster for defense budgets. Second, oil
dependence
has a negative impact on foreign and defense policies because it distorts priorities and limits options. It
also empowers hostile foreign actors. Further, it provides members of the OPEC cartel and other major
producers – and even lesser producers and non-producers in critical regions, such as the Middle East –
with leverage over the U.S., as they know that any actions causing oil prices to spike will hurt America.
For instance, in the case of preventing a nuclear Iran – one of our top national-security priorities – it is
clear that our dependence on oil weakened the resolve to impose crippling sanctions to deprive the
regime from acquiring nuclear capabilities. The recent oil boom in non-OPEC countries and relative
slowdown in global oil demand has strengthened this resolve to a certain degree, but it’s unambiguously
clear that our oil dependence undermines our national security and limits our foreign policy options.
Had we been less dependent on oil, we could have imposed devastating sanctions earlier and possibly
not be in the position we find ourselves in now with regard to Iran. When I was on the joint chiefs, we frequently
discussed and weighed how our defense decisions could potentially impact the U.S. economy and oil
prices for American consumers. Until we reduce our consumption and dependence on oil, that factor
will continue to influence our foreign policy decisions. Decker: What do you think is the most imminent
threat facing America today, and what should be done to address the problem? In other words, what keeps you up at night?
Conway: Outside of pinnacle threats such as nuclear war or terrorists getting their hands on and using weapons of mass destruction, oil
dependence is among the very most severe problems facing our nation right now. Our future
prosperity and security will be significantly determined by how we handle the oil dependence crisis. We
must implement a national, long-term strategy for achieving energy security. Congress should develop a
plan to take advantage of our incredible supply of natural resources – and mitigate our overdependence on imported oil.
Us oil dependency undermines its foreign policy making US-Iran war inevitable
Brown and Kennelly 13(Stephen P. A. Brown and Ryan T. Kennelly, Stephen P. A. Brown and Ryan T. Kennelly* Center for
Business and Economic Research University of Nevada, Las Vegas, “Consequences of U.S. Dependence on Foreign Oil”, National Energy Policy
Institute paper, April 4, 2013, http://www.ourenergypolicy.org/wp-content/uploads/2013/07/Brown-Costs-of-Oil-Dependence-Apr-20131.pdf)
Previous research and analysis have suggested a number of possible costs associated with U.S.
dependence on foreign oil. These costs include U.S. reliance on oil produced in a world oil market that is
dominated by a cartel that exercises monopoly power, expected economic losses associated with supply
disruptions, fears that a free market cannot ensure a secure supply, increases in government spending
to reduce the vulnerability of supply, the limits that oil imports place on U.S. foreign policy, the effect of
oil dependence on international alliances, the uses to which some oil‐exporting countries put their
revenue, and the ability of oil revenue to undermine local governance. The list is long, but not all of
these costs represent what economists would consider market failures. The distinction is important
because economists generally consider market failure as the only compelling reason for a policy
response Externalities are one type of market failure. They arise when a market transaction imposes costs or risks on an individual who is not party to the transaction. Another type of market failure occurs when the
exercise of monopoly power causes market prices to be much higher than production costs. Both such market failures are frequently cited as a reason for the United States to reduce its dependence on foreign oil. To explore these
issues, we develop a welfare‐analytic model of U.S. oil consumption and use it as a springboard to examine whether each of nine different costs of U.S. reliance on imported oil ought to be considered potential market failures and
can be quantified. In doing so, we take two approaches. We take a broad approach that contains all of the quantifiable costs that have been identified in the oil import literature that begins with Landsberg et al. (1979) and
continues through to Greene (2011). We also take a narrow approach and include only those costs which Brown and Huntington (2013) regard as the security externalities associated with the consumption of imported oil. 2.1.
Welfare Analytics of U.S. Oil Consumption, Imports, and Production The economic welfare the United States obtains from its oil consumption, imports and production is the sum of U.S. consumer and producer surpluses associated
with oil less the environmental costs of oil use and the expected losses associated with the insecurity of imported or domestically produced oil, as follows: ! = ∫ $%(') )* + ,' −$.'% +$.'0 −∫ 12('),' )3 + −450('0)−46('6)−78'% (1) where W
is the expected welfare associated with U.S. oil consumption, imports and production; QD is the quantity of oil consumed in the United States; PD is the value U.S. consumers place on the marginal barrel of oil consumed at each
quantity Q; PW is the world oil price; QS is the quantity of oil produced in the United States; MC is the marginal cost of U.S. oil production at each quantity Q; EUS is the expected value of the insecurity and other non‐environmental
losses associated with the consumption of domestically produced oil; EM is the expected value of the insecurity and other non‐environmental losses associated with the consumption of imported oil; QM is the quantity of imported
oil; and XE is the economic value of environmental externalities associated with U.S. oil consumption. According to our welfare‐analytic approach, the total well being that the United States gains from its oil consumption, imports
and production can be measured by the benefits received by consumers from using the oil in excess of what they pay for the oil, the revenue received by the domestic oil producers less their production costs, minus the
environmental costs associated with oil use and the expected losses associated with oil insecurity. For the consumption of domestically produced oil, the optimality condition is $% = 12)9 +:8;3 :)3 +78. (2) The optimal use of
domestic oil occurs when the domestic oil price is equal to the marginal cost of domestic production plus the change in expected insecurity and other non‐environmental costs associated with additional consumption of domestic
oil and the value of environmental externalities associated with U.S. oil consumption. For the consumption of imported oil, the optimality condition is: $% = $. +:<= :)> '6 + :8> :)> +78. (3) The optimal use of imported oil occurs
when the domestic price of oil is equal to the world price of oil plus changes in the terms of trade for oil, the change in expected insecurity and other non‐ environmental costs associated with the consumption of additional oil
imports and the value of environmental externalities associated with U.S. oil consumption. 2 2.2 An Examination of the Costs Associated with U.S. Oil Consumption In a well‐functioning market, economists expect those who
purchase and consume oil will appropriately consider the private costs of their actions. Oil consumers are expected to ignore any of the costs that their purchases and consumption of oil impose on others. Accordingly, economic
thinking expects deviations from the optimal U.S. consumption of domestically produced or imported oil only to the extent that any of elements in Equations 2 and 3 are regarded as externalities. That is, those elements are not
taken into account in private decision making. Other policy analysts who think about oil markets typically take a broader perspective on the costs of oil use that includes additional effects. These differences in thinking mostly
involve imported oil. Not surprisingly, these differences in thinking lead to substantially different estimates of the costs of U.S. dependence on imported oil. For example, our analysis finds that a more conservative approach yields
an estimate of $2.08 per barrel as the differential in social costs between the consumption of imported and domestic oil. The more inclusive approach yields an estimate of $25.31 per barrel as the differential in social costs
between imported and domestic oil.3 With these differences in mind, we examine the variety of ways that economists and other analysts approach the costs of dependence on imported and domestic oil. We consider
environmental externalities, OPEC market power and changes in the terms of trade for imported oil, economic losses associated with supply disruptions, fears that free markets cannot provide secure oil supplies, government
expenditures (including defense spending), limits on U.S. foreign policy, the effects of oil dependence on political alignment, the effect of oil revenues to allow other countries to oppose U.S. interests, and the possibility that oil
revenues will undermine local governance. Other than environmental externalities and the terms of trade, the discussion focuses on what ought to be considered as part of the expected insecurity and other non‐environmental
costs associated with the consumption of additional domestic or imported oil. 2.2.1 Environmental Externalities The consumption of both domestic and imported oil is likely to result in environmental externalities. As explained in
an extensive literature, such externalities add costs to oil consumption that are unrecognized in an unregulated market. These externalities are outside the present inquiry because they are not particular to the issues related to the
differences between dependence on imported and domestic sources of oil. 4 Nonetheless, production from some Canadian and U.S. oil resources may have greater environmental effects. In addition, the environmental
externalities associated with oil production are often local, which means domestically produced oil may pose greater environmental costs for the United States. 2.2.2 OPEC Market Power and Changes in the Terms of Trade for
Imported Oil The ability of the United States to engineer gains in the terms of trade for imported oil during stable market conditions typically has been included in analyses of the costs of U.S. oil imports from Landsberg et al (1979)
to Broadman and Hogan (1988) through Greene (2011). An increase in U.S. oil imports increases the price paid for all imported oil, and that means increased costs for those purchasing imported oil. Acting as individual price takers,
U.S. consumers neither differentiate between domestic and imported oil nor consider how their individual purchases affect the global price of oil, which makes the price increase faced by other purchasers a pecuniary externality.
Because the United States represents a large block of consumers, a U.S. policy of restricting oil imports can improve its terms of trade for imported oil. Brown and Huntington (2013) argue that this terms‐of‐trade effect (also known
as the monopsony premium) should not be regarded as a security externality because the value of the transfers engineered during stable market conditions does not measure the security gains, and pursuing these transfers would
further distort global resource use rather than offset an externality. In contrast, Greene (2010) argues that U.S. exercise of monopsony buying power is a countervailing force to the monopoly power exercised by OPEC. According to
Greene, the ability of the United States to restrict imports will reduce the world price of oil, offsetting the price gains that OPEC is able to achieve by reducing oil production. Greene’s analysis is correct in as far as it goes. The U.S.
ability to restrict oil imports does give the United States a countervailing power when it comes to the division of economic rents. What Greene’s analysis does not take into account is that OPEC exercises its monopoly power by
restricting its production, and the United States exercises its monopsony power by restricting its consumption of imported oil. Together, the two actions reduce world oil production and consumption below that which would occur
in a competitive market. We do not take a stance about whether the monopsony premium ought to be considered a cost of U.S. reliance on imported oil. Taking a neutral approach, we include the monopsony premium in our
broad measures as a cost of U.S. dependence on imported oil, but we exclude it from the security premium developed by Brown and Huntington. 2.2.3 Economic Losses Associated with Oil Supply Disruptions A well‐documented
literature shows that international oil supply shocks have led to sharp price increases and U.S. economic losses (Brown and Yücel 2002 and Hamilton 2003). As Brown and Huntington (2013) explain, these losses include transfers
from the United States to foreign oil producers and reduced GDP. To the extent that the economic losses associated with oil supply disruptions are not taken into account in private actions in making commitments to use oil, they
are externalities that raise concerns for economic policy. If oil consumers can correctly anticipate the size, risks, and societal impacts of an oil disruption and take them into account in their oil purchases, Brown and Huntington see
little reason for government intervention. They expect that consumers will internalize all of the social costs of oil consumption, including the risk of disruptions, by holding inventories, diversifying their energy consumption, and
reducing their dependence on oil use. Brown and Huntington note, however, that some experts believe national security concerns restrict the available information about geopolitical conditions and oil market risks. If restricted
information causes oil consumers to underestimate the risks, they are likely to underinvest in oil security protection. Brown and Huntington further argue that if oil consumers have accurate information about oil market risks,
government intervention may be justified for a more fundamental reason. Oil consumers will internalize any costs of oil use that they expect to bear, but they will typically ignore any costs that their decisions impose on other
consumers. The purchase of an additional barrel of oil has the potential to affect the economic security for all other consumers—not just the purchaser. Accordingly, we examine these issues below and include elements of these
expected losses in the oil dependence and oil security premiums. 2.2.3.1 Expected Transfers and Imported Oil An increase in U.S. oil imports increases the expected transfers to foreign oil producers during a supply shock. This
increase happens in two ways. Oil production in unstable countries expands with oil production outside the United States, which translates into bigger price shocks and larger transfers on all U.S. oil imports. In addition, increased
consumption of imported oil increases the amount of oil subject to a foreign transfer during a disruption. Although both elements are traditionally considered part of the cost of U.S. dependence on foreign oil, Brown and
Huntington take the perspective that only one portion of these transfers ought to be considered a security externality. Brown and Huntington argue that individuals buying oil products (or oil‐using goods) should recognize that
possible oil supply shocks and higher prices could harm them personally. So the expected transfer on the marginal purchase for this individual should not be regarded as a security externality.5 On the other hand, individuals are
unlikely to take into account how their purchases may affect others in the United States by increasing the size of the price shock that occurs when there is a supply disruption. So the latter portion is a security externality. When
summed across the 300+ million people in the United States, this small external effect is significant in the aggregate. We embrace both approaches. We include estimates of both transfers in our broad measures of the cost of U.S.
dependence on imported oil. We include only the expected transfers paid on inframarginal imports in the security premium. 2.2.3.2 Expected Transfers and Domestically Produced Oil On the other hand, the increased consumption
of domestically produced oil increases the secure elements of world oil supply. The increased security of supply weakens the price shocks arising from any given supply disruption and yields smaller transfers on all U.S. oil imports.
Consequently, the increased consumption of domestically produced oil reduces the expected transfers resulting from world oil supply disruptions. Because the benefits of lower price volatility are conferred throughout the
economy, consumers are unlikely to take the benefit into account when buying oil (or oil‐using goods). Following either the broader or narrower approaches, the difference in transfers between the consumption of imported and
domestically produced oil represents a cost difference between the two sources of oil. 2.2.3.3 Expected GDP Losses The GDP losses associated with oil supply shocks can be considerable. Economic researchers have offered a
variety of explanations for the outsized effects that could yield such losses. John (1995) points to market power and search costs. Rotemberg and Woodford (1996) similarly blame imperfect competition. Bohi (1989, 1991),
Bernanke et al. (1997), and Barsky and Kilian (2002, 2004) attribute these effects to possible monetary policy failures. Mork (1989) and Davis and Haltiwanger (2001) point to the reallocation of resources necessitated by an oil price
shock. Hamilton (1996, 2003), Ferderer (1996), and Balke et al. (2002) blame the uncertain environment created for investment, and Huntington (2003) points to coordination failures. Whatever generates the strong impact of oil
supply shocks on U.S. economic activity, the economic losses from such shocks extend throughout the economy and are much greater than any individual might expect to bear as part of an oil purchase.6 Consequently, those
purchasing oil are unlikely to understand or consider how their own oil consumption increases the economy‐wide effects of oil supply shocks. Therefore, the expected GDP losses resulting from oil price shocks are likely to be
security externalities. Recent research, such as that by Kilian (2009) and Balke et al. (2008), shows that it is important to differentiate among the various causes of oil price shocks when analyzing or estimating the effects on GDP.
Oil supply disruptions result in higher oil prices and reduced economic activity. Oil demand shocks originating from domestic productivity gains result in increased economic activity, which increases oil demand and leads to higher
oil prices. Other oil market shocks—such as foreign productivity gains—can boost oil prices and have neutral effects on U.S. output. In such cases, oil price increases do not yield economic losses. These recent findings do not
provide a reason to conclude that the GDP losses resulting from oil supply disruptions are not externalities. Neither are they a reason to think it impossible to quantify the GDP effects of oil supply disruptions. One simply needs to
be careful that any analysis of GDP losses depends on probable oil supply disruptions—not just oil price shocks—and that any parameters used in estimation are from research that has distinguished between oil supply disruptions
and other factors that might serve to boost oil prices. Although the increased consumption of either imported or domestically produced oil increases the economy’s exposure to the effects of oil supply shocks, policymakers have a
reason to differentiate between these two sources of oil when it comes to GDP losses. As described in section 2.2.3.1 above, increasing U.S. oil imports boosts the insecure elements of world oil supply, which strengthens the oil
price shocks resulting from any given oil supply disruption and exacerbates the GDP loss. In contrast, increasing domestic oil production boosts the secure elements of world oil supply, which weakens the price shocks from any
given oil supply disruption and dampens the GDP loss. Consequently, the expected GDP loss is smaller for an increase in oil consumption from domestic production than imports. Following either the broader or the narrower
approaches, these GDP losses are considered part of the costs of U.S. oil consumption. The difference between the GDP losses associated with increased consumption of imported oil and domestically produced oil is a cost of using
foreign rather than domestically produced oil. 2.2.4 Fears that Free Markets Cannot Ensure Secure Oil Supplies According to the Council on Foreign Relations (2006), reliance on historically unstable supplies of imported oil will raise
fears that free international markets cannot ensure secure oil supplies. If international supplies are insecure, it is rational for individual decision makers to take that uncertainty into account when buying oil (or oil‐using goods). The
result may be reduced total investment in the economy, particularly during those episodes in which oil prices are volatile. The possibility of such fears is consistent with the explanations offered by Hamilton (1996, 2003), Ferderer
(1996), and Balke et al. (2002) for why price shocks create an uncertain environment in which total U.S. investment is reduced. These effects would be captured in the expected GDP losses associated with oil price shocks. We are
reluctant to extend the argument to a more general level in which a constant level of oil market uncertainty undermines confidence in free markets and reduces total investment. Uncertainty arises from many sources, and other
than episodic increases in oil prices, it is impossible to relate oil‐ market uncertainty to specific economic losses. 2.2.5 Government Expenditures (including Defense Spending) Some past analyses have focused on the cost of policy
responses—such as defense spending or the development of a strategic petroleum reserve—to U.S. dependence on unstable supplies imported from the Middle East (e.g., Hall 2004, CFR 2006). In contrast, Bohi and Toman (1993)
explain that such expenditures are not another measure of the externality. Brown and Huntington (2013) further explain that government actions—such as military spending in vulnerable supply areas and expansion of the
strategic petroleum reserve—are possible responses to the economic vulnerability arising from the potential oil supply disruptions that are exacerbated by increased U.S. oil imports. As such, Brown and Huntington recommend
balancing such expenditures against the benefits of reducing the externalities associated with increased oil imports, rather than measuring the expenditure as an additional externality. 2.2.5.1 Defense Spending The Brown and
Huntington approach may pose a dilemma when it comes to measuring the costs of U.S. dependence on imported oil. Quantitative estimates of the economic losses associated with oil dependence typically rely on a schedule of
probable disruptions, such as those provided by Beccue and Huntington (2005). These estimates assume that current U.S. foreign policy and military spending are given. As such, the estimates do not reflect what the disruption
probabilities might be in the absence of a sizable U.S. military presence in the Middle East. The resulting estimates of the oil import and security premiums may be too low. Furthermore, increased consumption of domestic or
imported oil might lead to an optimal increase in defense spending. Both the remaining exposure and the induced increase in optimal defense spending ought to be counted as the cost of increased oil consumption. This approach
is analogous to the idea of evaluating a firm’s cost of doing business in a high‐crime area as including both the security measures used to limit losses from theft and the remaining expected losses. Using data for the time period
from 1968 to 1989, Hall (1992) estimated the U.S. defense spending attributable to oil imports at $7.30 per barrel in 1985 dollars (which amounts to $13.16 in 2010 dollars).7 We found no subsequent studies that quantified the
relationship between U.S. oil imports and defense spending. The lack of further studies means relatively limited coverage of the time periods in which world oil prices were the most volatile and the United States conducted wars in
the Middle East. To address the lack of empirical work, we examined the relationship between U.S. oil imports and defense spending with 40 years of quarterly data from 1972 through 2011 (Appendix B). Unlike Hall, we found no
We did find evidence, however, that U.S. defense spending responds to
world oil price shocks. If we assume that increased defense spending is an optimal response to an oil supply shock that reduces the
evidence of a relationship between U.S. imports and defense spending.
duration or size of any future shock, then increased defense spending represents an expected economic loss attributable to U.S. reliance on
imported oil. We can quantify this expected loss in a manner similar to that used to quantify the changes in expected transfers and GDP losses.
Recognizing the potential controversy surrounding the inclusion of defense spending in calculations such
as these, we include it in our broadest measure of oil dependence but exclude it from our security
premium. Hall also estimates the opportunity cost of holding oil in the U.S. strategic petroleum reserve at $1.75 per barrel of imported oil in
1985 dollars (which amounts to $3.15 in 2010 dollars). Although the optimal size of the strategic petroleum reserve may vary with a variety of
market conditions including oil imports, we found no empirical studies relating the actual size of the U.S. strategic petroleum reserve to U.S. oil
imports. Our own analysis showed no relationship. 2.2.6 Limits on U.S. Foreign Policy According
to the Council on Foreign
Relations (2006), an overall dependence on imported oil may reduce U.S. foreign policy prerogatives.
These limitations can arise because U.S. policymakers fear that the course of foreign policy that they
wish to pursue would increase the likelihood of world oil supply disruptions or because foreign
dependence on imported oil may limit the willingness of other countries to cooperate with U.S.
objectives. Both explanations suggest that foreign policy is limited by the fear of the expected economic losses
associated with world oil supply disruptions. The latter explanation actually focuses on foreign dependence on
imported oil rather than U.S. dependence, and foreign dependence can hardly be considered a cost of
U.S. reliance on imported oil. In theory, evaluating the limits that reliance on imported oil imposes on U.S.
foreign policy is similar to evaluating the costs of defense attributable to oil imports. If the optimal self‐
imposed restrictions on U.S. foreign policy increase with U.S. oil imports, then the restrictions can be
viewed as a cost of U.S. reliance on imported oil. Nonetheless, the restrictions on U.S. foreign policy may
depend on the United States’ overall reliance on imported oil, rather than a marginal change in oil
imports. As Bohi and Toman (1993) explain, the additional policy costs of responding to increased oil imports are
likely close to zero. U.S. foreign policy is conducted with a broad range of objectives, of which securing
foreign oil supplies is only a part. In addition, the costs of foreign policy measures, such as diplomacy or
military intervention, may not be affected very much by the marginal barrel of oil consumption or
imports. In practice, estimating the economic value of these restrictions may be impossible. Our calculations incorporate the
expected U.S. economic losses that may drive foreign policy, but they exclude any additional costs that
may result from increased limits on U.S. foreign policy. The Council on Foreign Relations (2006) also
identifies the possibility of oil revenues enabling oil‐producing countries to oppose U.S. interests as a
cost of U.S. dependence on imported oil. Iran, Libya, and Venezuela stand out in recent history as
countries whose oil revenue has allowed them to pursue interests that the United States opposes.
Nonetheless, the ability of a country to oppose U.S. interests depends more on its oil revenue than U.S.
consumption of the marginal barrel of imported oil. In that regard, oil’s fungibility limits the
effectiveness of policy tools directed at a country’s oil exports. Restricting U.S. oil imports to target the
actions of a few countries represents a rather blunt policy instrument that punishes all oil‐exporting
countries—not just those who oppose U.S. interests. Other targeted sanctions directed at countries that
behave badly may prove to be a more direct approach to foreign policy.
Increased US oil dependence makes nuclear iran and US-Iran war inevitable
Cohen 7(Ariel Cohen, Ph.D senior Research Fellow in Russian and Eurasian Studies and International Energy Policy in the Douglas and
Sarah Allison Center for Foreign and National Security Policy, “The National Security Consequences of Oil Dependency”, the heritage
foundation, March 22, 2007, http://www.heritage.org/research/lecture/the-national-security-consequences-of-oil-dependency)
Securing the U.S. Energy Supply The
security and availability of global energy resources directly affects the U.S.
economy. U.S. policies should enhance the security, stability, and economic development and the rule of
law in oil-producing countries to ensure that energy resources remain readily available, ample,
affordable, and safe--for everyone's benefit. In his 2006 State of the Union address, President George W. Bush said, "[W]e have
a serious problem: America is addicted to oil, which is often imported from unstable parts of the world."[2]
Recognizing the problem is laudable; however, relatively little has been done to solve it. There is a broad
consensus in America, from the President to the man on the street, that the current situation is detrimental to the country's economic health.
The world, both developed and developing, is dependent on unstable or otherwise inhospitable regions
for its oil supply. This social and political instability characterizes all of the major oil provinc-es: the Middle East, Venezuela, and Africa.
Russia presents a separate set of issues which will be dealt with below. Dealing with security and political factors limiting the development of oil
and gas production needs to be a high priority for any Administration--Republican or Democrat. This is particularly challenging because there
are so many moving parts in this complex system. One of the most important avenues for dealing with the oil shortage is through conservation.
Another is developing substitute and alternative fuels, such as ethanol, methanol, and gas-to-liquid. Higher oil prices are likely to dictate new
engine and car designs that will work more efficiently and/ or run on different fuels. The plug-in hybrids and other technological breakthroughs
may eventually wean the world from the internal combustion engine and oil dependence. However, such techno-logical and structural
transformations are, like many things, likely to take longer than many expect, are certain to require massive investments, and are beyond the
scope of this testimony. For
the near term, let us focus on the principal avenues of securing our oil supply,
which include: Deterring anti-status quo players, such as Iran, Venezuela, and the global radical Islamist movement with
its terrorist organizations; Cooperating with local governments to enhance the protection of critical shipping choke points, such as the Suez
Canal, the Bosporus, Bab-el-Mandeb, the Strait of Hormuz, the Strait of Mal-acca, etc., and developing contingency plans for sea-borne
terrorism/piracy aimed at tanker ships; Boosting an international coalition of oil con-sumers by bringing aboard India, China and other major
emerging markets, such as Brazil and Turkey; and Securing open access and a level playing field for international oil companies and national oil
companies. Specifically, consumer countries should make as their top foreign policy priori-ties openness of investment regimes; stable,
predictable, and transparent energy regulatory systems based on the rule of law in producing countries; and fighting corruption. The Middle
East The
Middle East's Persian Gulf is the richest and most important oil province in the world. Forty
per-cent of the daily shipment of oil passes through the Gulf. Approximately 20 percent of U.S. oil comes
from the Gulf. Currently, the security and stability of Middle East oil is threatened by ongoing conflicts in
Iraq; an aggressive and nuclear Iran; and radical Islamist movements, with their terrorist arms, whose
goals include toppling regimes throughout the Gulf, including the swing producer of oil, Saudi Arabia.
Islamist movements, nurtured to a great extent by oil revenues from Gulf states, aim to eventually create a global Islamic empire--the
Caliphate. These movements ultimately strive to subjugate and convert non-Islamic countries to their brand of Islam. This is a very long-term
project, and ulti-mately, it will hopefully be a futile one. However, in the meantime, the existence and the goals of these movements pose an
immediate threat to the securi-ty of some of the most crucial sectors of the world oil supply. Sellers' Market. Today's global oil market is
operating without the benefit of additional produc-tion capacity or significant strategic petroleum reserves beyond the U.S. reserves. The Saudi
spare capacity has deteriorated over the past decade by one-half, from 3-4 mbd to 1-1.5 mbd. To make matters worse, some experts question
reserve esti-mates provided by national oil companies in the Gulf and elsewhere, as these numbers are not inde-pendently audited. Without a
clear understanding of how much oil is available, the world may be up for more nasty surprises. Terrorist attacks that have been carried out to
date on the oil infrastructure have clearly caught oil producers unprepared. For example, al-Qaeda's February 24, 2005, attack on the Aramco
facility in Abqaiq, Saudi Arabia, sent shock waves through the world's financial markets. On the same day, the price of oil on international
markets jumped nearly $2 per barrel, despite the attack's complete failure (the terrorists and two security guards were killed.)[3] Most analysts
agree that the February attack, an additional attempt on March 28, 2005, and a 9/11-style assault in April 2007, all of which were suc-cessfully
averted, were merely trial runs in a much longer campaign designed to disrupt the global economy in general, and the oil and gas industry in
particular.[4] As the September 11, 2001, World Trade Center attacks demonstrated, al-Qaeda tends to return to the scene of the crime, so
another strike on Abqaiq and other oil targets is likely. Both Osama bin Laden and Ayman al-Zawahiri have repeatedly called for attacks on key
Western eco-nomic targets, especially energy sources.[5] In a tape aired by Al-Jazeera in February 2006, Zawahiri said: I call on the mujahideen
to concentrate their attacks on Muslims' stolen oil, most of the rev-enues of which go to the enemies of Islam while most of what they leave is
seized by the thieves who rule our countries.[6] The
unfortunate reality is that the Middle East remains the strategic
center of gravity of the global oil market--a position that is not likely to change in the medium term. As
long as radical Islamists, China, Russia, India, and Europe continue the struggle for the world's limited oil
supply, the region will remain unstable. If the U.S. is to protect itself from these economic and political
threats, it must use all the tools at its disposal to protect energy assets around the globe, while
decreasing the world's dependence on Middle Eastern oil as quick-ly and efficiently as possible. Oil as a
Weapon. Many Arab leaders understand the dynamic of the world's oil dependence. For example, as early as
1990, the late Yassir Arafat said: When
the North Sea oil dries up in 1991, the United States will want to buy Arab
petro-leum. And when the American oil fields them-selves run dry and oil consumption in the United
States increases, the American need for the Arabs will grow greater and greater.[7] This observation has not been
lost on the cur-rent generation of politicians and terrorist leaders. However, bin Laden and Zawahiri are not satisfied with the unwieldy
weapons of oil boycotts and buying political influence in the West. Instead, they are clearly zeroing in on the oil-rich kingdoms of Saudi Arabia
and the Persian Gulf as their principal targets. They also appear increasingly interested in attacking the entire global oil industry, from wells to
wheels. The failed February 2005 strike and the prevent-ed March 2005 attack on Abqaiq, mentioned earlier, were not the first times that alQaeda has targeted energy assets in the region. In October 2002, al-Qaeda attacked the Limbourg, a French oil tanker, off the coast of Yemen
with a suicide boat filled with explosives. In 2002, American and Saudi intelli-gence agencies uncovered a plot by al-Qaeda sym-pathizers inside
Saudi Aramco to destroy key Saudi oil facilities. In 2003-2004, al-Qaeda attacked the Saudi port of Yanbu and murdered five Western engineers
working there.[8] Some analysts have warned that a carefully target-ed terrorist attack on oil facilities in Saudi Arabia could reduce Saudi oil
production to 4 million bar-rels per day or less for up to three months, which would have disastrous results for the global economy. Iran The
leadership of the Islamic Republic of Iran is engaged in operational planning to intercept the flow of oil
in the Gulf. Despite Iranian President Mahmoud Ahmadinejad's earnest and ongoing attempt to project
the image of an irrational leader of what international relations theorists have called a "crazy state,"
many analysts have yet to recognize fully the dire ramifications of Iran's professed inten-tion to develop
a nuclear weapons program. If diplomacy fails, Iran's pursuit of nuclear weap-ons will leave the U.S. and
its allies with few choic-es, all of them unpalatable. In June 2006, Iran's oil minister cautioned, "If the
country's interests are attacked, we will use all our capabilities, and oil is one of them." Perhaps most alarming
are the remarks of Iran's Supreme Leader Ayatollah Ali Khamenei in the same month: "If the Americans make a wrong move
toward Iran, the shipment of energy will definitely face danger, and the Americans would not be able
to protect energy supply in the region." The economic consequences of a military strike on Iran's
nuclear facilities to the world energy mar-ket would likely be significant, if not disastrous. Immediately
following military action, according to a Turkish assessment, uncertainty about Iran's abili-ty to sustain oil
production at the current level of 4 mbd could drive oil prices above $80 per barrel.[9] If Iran retaliated and
escalated by shutting down the Strait of Hormuz, which would merely require plac-ing anti-ship mines in
the strait,[10] the temporary loss of more that 15 million barrels of oil to the international market could
drive oil prices above $83 per barrel, the historic height of the 1970s (adjusted for inflation).[11] In fact, a recent Heritage Foundation war game
and economic study specu-lated that oil prices could go as high as $120/barrel for a limited time. On the other hand, Iran's
aspirations in
the region are far-reaching. Allowing Iran to join the nuclear club introduces the possibility of Iranian
interference throughout the Middle East, especially given Iran's proximity to so many of the world's
larg-est oil fields. The large Iranian military, if amply supplied by Russia and China, would be in a
posi-tion to dominate the Persian Gulf under a nuclear umbrella, particularly if U.S. ground forces were
pinned down in Iraq. Currently, Iran enjoys the support of some Shi'a forces in Iraq, especially Muqtada
al-Sadr's Mahdi Army, and in the Shi'ite-populated Ash Sharqiyah (Eastern) Province of Saudi Arabia.
This could facil-itate a pro-Iranian Shi'a takeover of some of the larg-est oil fields in the world. In a
worst-case scenario, a nuclear Iran could threaten the United Arab Emir-ates and Kuwait. If this were to
happen, the Islamic Republic could quickly secure a sizable part of the world's oil supply, bringing the
nuclear-armed mili-tant Iran close to a virtual monopoly over the world's energy market. Iran's
Dangerous Arsenal. Since the 1990s, Iran has been upgrading its military with a host of new weapons
from China, Russia, and North Korea, as well as with weapons manufactured domestically. Today, Iran
boasts an arsenal of Iranian-built missiles based on Russian and Chinese designs that are difficult to
counter both before and after launch. Of particular concern are reports that Iran has purchased the SS-N-22
Moskit/Sunburn anti-ship missile. The supersonic Sunburn is specifically designed "to reduce the target's
time to deploy self-defense weapons" and "to strike ships with the Aegis command and weapon control
system and the SM-2 surface-to-air missile."[12] Iran is also well stocked with older Chinese HY-1 Seersucker and HY-2
Silkworm missiles and the more modern C-802 anti-ship cruise missile (ASCM)--designs that Iran has successfully adapted into their own Ra'ad
ad Noor ASCMs. Iran
has a large supply of anti-ship mines, including modern mines that are far superior to
the simple World War I-style contact mines that Iran used in the 1980s. They include the Chinese-designed EM-52
"rocket" mine, which remains sta-tionary on the sea floor and fires a homing rocket when a ship passes overhead. In the deep waters in the
Strait of Hormuz, such a weapon could destroy ships entering or exiting the Persian Gulf. Accord-ing to one expert, Iran "can deploy mines or
torpe-does from its Kilo-class submarines, which would be effectively immune to detection when running silent and remaining stationary on a
shallow bottom just outside the Strait of Hormuz."[13] Iran could also deploy mines by helicopter or small boats disguised as fishing vessels.
Mines are only one of a host of potential Iranian threats to shipping in the Persian Gulf. The naval
commandos of Iran's Revolutionary Guards are trained to attack using fast attack boats, minisub-marines, and even jet skis. The Revolutionary Guards also have underwater demolition teams that
are trained to attack offshore oil platforms and other facilities. Finally, Tehran could use its extensive
ter-rorist network in the region to sabotage oil pipelines and other infrastructure or to strike oil tankers
in port or at sea. Consequences of a Supply Disruption in the Persian Gulf. With supplies growing and the price of oil
falling, there has been a shortsighted tendency to underplay the threat posed by a major disruption in
the Persian Gulf. Although oil prices fell precipitously after the outbreak of the Iran-Iraq War, it is
important to remember that global energy needs are much differ-ent today from what they were during
the 1980s. Oil production is at record levels, but global demand has increased significantly, especially in
the past 15 years. Under today's conditions, the slight-est disruption could drive oil prices back up
toward historic levels.
US oil dependence undermines its ability to prevent a US-Iran War
Middle East Quarterly 8(Middle east quarterly, reviewing the article National Security Consequences of U.S. Oil Dependency and
Reviewed by Gal Luft Institute for the Analysis of Global Security, “National Security Consequences of U.S. Oil Dependency”, middle east
quarterly, Summer 2008, http://www.meforum.org/1955/national-security-consequences-of-us-oil)
One need not be a policy expert to understand how America's
dependence on oil undermines so many of its foreign
policy objectives, from prosecuting the war on terror, to democracy-promotion, to preventing rogue
countries such as Iran from developing nuclear weapons. The Council on Foreign Relations (CFR) created a task force to
examine what could be done to address these difficulties. The task force's report correctly identifies many of the
security and economic reasons why oil dependence is a serious problem, but, curiously, there is not a
word about the close link between petro-dollars and radical Islam. Any observer of Islamism realizes
that it is no coincidence that so much of the cash filling terrorist coffers originates in Persian Gulf oil
monarchies, particularly Saudi Arabia. While the task force has no problem criticizing Russia, Venezuela,
and Iran, it gives a free pass to Saudi Arabia, which remains, years after 9-11, the financial hub of global jihad.
Nuclearization Bad – US-Iran War
Nuclear Iran causes War with US and Israel in 2 yrs
L. Todd Wood-14, a USAFA graduate, a former special operations helicopter pilot, and emerging market bond trader, 4/28/14, Western
Journalism, “Iran, Not Russia, Will Threaten Nuclear War", http://www.westernjournalism.com/iran-russia-will-threaten-nuclear-war/
With all of the events in Ukraine on the news constantly, one could be forgiven thinking that Russia is the greatest threat to world peace over
the near and medium term. Daily pictures of Russian armored personnel carriers and men in ski masks carrying Kalashnikovs have most
definitely tarnished the Russian Federation’s reputation in the world’s eyes, and rightly so. Russia is threatening the peace and stability in
Europe that has existed for decades. However, at the end of the day, Russia is not threatening to draw the world into a nuclear or global
conventional conflict. In reality, they are simply threatening their neighbors, the old client states of the Soviet Union. Iran, on the other hand,
is a totally different story altogether. The government of the Islamic Republic of Iran has repeatedly over the years stated
their desire
to see the state of Israel destroyed, along with the Jewish State’s enabler, the United States of America. Now we see the
fruits of the Obama administration’s foreign policy, or lack thereof, as Iran speeds down the highway towards a nuclear weapons capability.
Currently with Russia not especially incentivized to help slow or reduce the Iranian threat, the speed limit for Iran has just been increased. So
let’s assume that Iran is within
two years of being able to build a bomb. Let’s also assume that they continue to build and refine a long
Jihadist state that has a long range
ICBM capability with a stated desire to destroy Israel and the United States. At the very least, with the bomb, Iran
will be much less deterred as far as meddling in Middle Eastern affairs and fostering terrorism globally.
range missile capability. Two plus two equals four as always. The result will be an Islamic
US-Iran War Bad
US-Iran War Bad- 10 reasons
Seyed Hossein Mousavian 13, Research Scholar at the Program on Science and Global Security and Princeton Graduate, 5/11/2013,
Gulf News, Ten consequences of US covert war against Iran, http://gulfnews.com/opinions/columnists/ten-consequences-of-us-covert-waragainst-iran-1.1182058
Washington believed that covert action against Iran’s nuclear facilities would be more effective and less risky than an all-out war, which could
force Tehran to retaliate across the region and divert its current peaceful nuclear programme toward weaponisation. In fact, Mark Fitzpatrick,
former deputy assistant secretary of state for non-proliferation said: “Industrial sabotage is a way to stop the programme, without military
action, without fingerprints on the operation, and really, it is ideal, if it works.” The US has a long history of covert operations in Iran, beginning
in 1953 with the CIA orchestrated coup d’état that toppled the popularly elected Iranian prime minister Mohammad Mossadegh and installed a
dictator, Reza Shah. The US has reorganised its covert operations after the collapse of the shah in 1979. In early 2009, the New York Times
reported that the Bush administration preferred intrusive covert operations aimed at Iran, having concluded that the sanctions imposed by the
United States and its allies were failing to curb the country’s nuclear programme. In January 2011, it was revealed that the Stuxnet cyber-attack,
an American-Israeli project to sabotage the Iranian nuclear programme, has been accelerated since President Barack Obama first took office.
Referring to comments made by the head of Mossad, then US secretary of state Hillary Clinton confirmed the damages inflicted on Iran’s
nuclear programme have been achieved through a combination of “sabotage and sanctions”. Meanwhile, several Iranian nuclear scientists were
assassinated. The New York Times reported that Mossad orchestrated the killings while Iran claimed the attacks were part of a covert campaign
by the US, UK and Israel to sabotage its nuclear programme. Former Republican presidential candidate Rick Santorum boasted that the murders
of Iranian nuclear scientists are “a wonderful thing”. John Sawers, former British nuclear negotiator and now the chief of the UK’s intelligence
service MI6, advocated in October 2010 for “intelligence-led approach to stopping Iran’s nuclear proliferation”. There
are at least 10
major repercussions arising from the US, West and Israeli policy of launching covert war and cyber-attacks against
Iranian nuclear facilities and scientists. First, cyber war is a violation of international law. According to the UN Charter, the use of force
is allowed only with the approval of the UN Security Council in self-defence and in response to an attack
by another country. A Nato-commissioned international group of researchers, concluded that the 2009 Stuxnet attack on Iran’s nuclear
facilities constituted “an act of force”, noting that the cyber-attack has been a violation of international law. Second, the US covert
operations are a serious violation of the Algiers Accord. The 1981 Algiers Accords agreed upon between Iran and the US clearly
stated that “it is and from now on will be the policy of the US not to intervene, directly or indirectly, politically or militarily, in Iran’s internal
affairs”. Third, the cyber war has propelled Tehran to become more determined in its nuclear efforts and has
made major advancement. According to reports by the International Atomic Energy Agency (IAEA), prior to covert operations targeting the
nuclear programme, Iran had one uranium enrichment site, a pilot plant of 164 centrifuges enriching uranium at a level of 3.5 per cent, first
generation of centrifuges and approximately 100 kg stockpile of enriched uranium. Today, it has two enrichment sites with roughly 12,000
centrifuges, can enrich uranium up to 20 per cent, possesses a new generation of centrifuges and has amassed a stockpile of more than 8,000kg
of enriched uranium. Fourth, the strategy
pursued has constituted a declaration of war on Iran, and a first
strike. Stuxnet cyber-attack did cause harm to Iran’s nuclear programme, therefore it can be considered the first unattributed act of war
against Iran, a dangerous prelude toward a broader war. Fifth, by initiating a covert war, the US and the West sacrifice their
long-term interests for short-term gains. Such short-sighted policies thicken the wall of mistrust, further complicating US-Iran
rapprochement and confidence-building measures. Sixth, Iran would consider taking retaliatory measures by launching
cyber-counter-attacks against facilities in Israel, the West and specifically the US. An unnamed Iranian intelligence official said,
“Iran’s intelligence community is in a very good position to design tit-for-tat operations to retaliate against assassinations carried out by
western intelligence services. Iran’s response will be extraterritorial and extra-regional. It follows the strategy that none of those who ordered
or carried out [the attacks] should feel secure in any part of the world.” Seventh, Iran
is building a formidable domestic
capacity countering and responding to western cyber-warfare. Following the Stuxnet attack, Iran’s Supreme Leader issued a
directive to establish Iran’s cyber army that is both offensive and defensive. Today, the Islamic Revolutionary Guards Corps (IRGC) has the
fourth biggest cyber army in the world. Israel’s Institute for National Security Studies (INSS) acknowledged that IRGC is one of the most
advanced nations in the field of cyberspace warfare. Eighth, Iran now has concluded that information gathered by IAEA inspectors has been
used to create computer viruses, facilitate sabotage against its nuclear programme and the assassinations of nuclear scientists. Iranian nuclear
energy chief stated that the UN nuclear watchdog [IAEA] has been infiltrated by “terrorists and saboteurs.” Such conclusions have not only
discredited the UN Nuclear Watchdog but have pushed Iran to limit its technical and legal cooperation with the IAEA to address outstanding
concerns and questions. Ninth, worsening
Iranians siege mentality by covert actions and violations of the country’s territorial
sovereignty could strengthen the radicals in Tehran to double down on acquiring nuclear weapons. Iran could
be pondering now the reality that the US is not waging a covert war on North Korea (because it possesses a nuclear bomb), Muammar Gaddafi
lost his grip on power in Libya after ceding his nuclear programme, and Iraq and Afghanistan were invaded (because they had no nuclear
weapon). Tenth, the combination of cyber-attacks, industrial sabotage and assassination of scientists has
turned public opinion
within Iran against western interference within the country and instead has garnered more support for the Iranian government’s
nuclear policy. At the same time, such provocative western measures have convinced the Iranian government that
the main issue is not the nuclear programme but rather regime change.’
US-Iran War causes economic collapse
Agustino Fontevecchia 12, Markets Reporter at Forbes, Forbes, 2/24/12, Attacking Iran Would Push The U.S. Back Into Recession.
http://www.forbes.com/sites/afontevecchia/2012/02/24/attacking-iran-will-push-the-u-s-back-into-recession/
With oil prices hitting multi-year highs, in great part because of geopolitical concerns, the option of a belligerent conflict with Iran has once
again been put on the table. Be it war with Israel or a preemptive strike by U.S. air forces, the reality
is that a sustained conflict
with Iran would tip the U.S., and possibly much of the developed world, back into recession. Crude oil is once again
on the rise. Euro-denominated Brent crude soared to record highs above €93 a barrel on Thursday, while U.S. benchmark WTI was trading
at $109.70 by 4:00 PM in New York on Friday, its highest levels since the April 2011. Before the early 2011 rally, the last time WTI hit prices that
high was in 2008, when they peaked near $150 a barrel as the world plunged into recession. Several factors have conspired to push crude oil on
a dangerous new uptrend, but by far the most salient is the risk of a
military conflict with Iran that would disrupt the flow
through the Strait of Hormuz. According to HSBC, such disruption could send prices north of the 2008 peak and possibly into a more
than 100% year-over-year increase that would tip the U.S. back into recession. More than one-fifth of the world’s daily production of crude oil
flows through Hormuz, including more than 60% of Asia’s imports. The
Strait, only 21 nautical miles wide at its narrowest point, lies
between Iran and the United Arab Emirates and has been the center of attention ever since the Iran-Israel-US conflict
bubbled up once again in recent months. Iran’s nuclear pretentions have scared Israel, the U.S.’ most important military ally in
the region. The fear is warranted according to Dennis Gartman, who explained Iranian president Mahmoud Ahmadinejad has declared himself a
follower of a “nihilist” school of Islamic thought that believes “in the return of the “Mah’di”… the 12th Imam… who will, after a holocaust and
the annihilation of the non-Muslims, establish a global Islamic society.” Ahmadinejad has publicly said that Israel should be wiped off the map,
and, according to Gartman “has made it clear that it is his intention to destroy Israel and if that shall require a nuclear weapon and war so be it.
He is prepared to push ahead with martyrdom, and martyrs make for impossible debaters.” While debatable, Gartman’s latter point has stirred
the military ranks of Israel and the U.S. The
issue of attacking Iran has once again taken media prominence and
there isn’t a shortage of advocates for such a move. Gartman, at least, believes that “market’s focus and positions are being
established fearing that sooner rather than later Israel shall have to act against Iran’s nuclear facilities, with time running out.” Such a conflict
would have devastating consequences for the global economy. As
mentioned above, a severe disruption of maritime flow
through the Strait of Hormuz would send WTI above the 2008 peaks and possibly to the $210-$220 per barrel region.
“With oil prices already high,” explained HSBC’s analysts, “it might take a smaller rise in the real oil price
to push the US economy back into recession.” At the same time, other “developed” economies, already
growing at sluggish rates, or even contracting, would fall into recession. Japan, on the one hand, is highly dependent on Middle East
oil, as Gartman points out. Another major player is Germany, and the whole of the Eurozone for that matter, which is expected to contract in
2012.
US attack causes successful Iranian counter
Michael D. Mosettig 12, Senior Producer for Foreign Affairs and Defense at the PBS NewsHour, PBS, 1/18/12, Are U.S., Iran Headed
Toward War?, http://www.pbs.org/newshour/rundown/iran-war/
And if none of this works, and conflict erupts? David Cloud of the Los Angeles Times reported on the quiet U.S. military buildup in the
region, even amid the final pullout of ground forces from Iraq. In a post on Inside Iran, Ehsan Mehrabi, a journalist who recently left his country,
said Iran
would counter any U.S. action with a war of attrition in the region and around the world. And Adam
a professor at the Air Force’s Air University warned, “Iran possesses what is likely the most
capable military the United States has faced in decades.”
B. Lowther,
US-Iran war will have a hard landing
Jeffery White 11, writer for American Interest, 6/1/2011, What Would War with Iran Look Like?, The American Interest,
http://www.the-american-interest.com/articles/2011/07/01/what-would-war-with-iran-look-like/
In the short term, there would be consequences in the military, diplomatic, economic and social
domains. The intensity and locus of these consequences would depend on the outcome of the attack and conflict, but there would be
“battle damage” in all domains. Short-term consequences would likely include a tense and unstable military situation (unless the conflict ended
cleanly) that would require the commitment of forces for monitoring and reacting to emergent threats; and also a potential political crisis in the
region propelled by instability and uncertainty about the future, including residual Iranian capabilities to retaliate directly or indirectly.16 The
oil market would remain in shock for some time after an attack. Naval mines, wartime damage to facilities and irregular attacks on facilities or
tankers would see to that. Social turmoil would be likely as various population groups react to the attack and subsequent conflict. In short,
there would be no bright line ending the war in the economic, diplomatic and social realms. To turn to the long-term consequences, Iran would
almost certainly remain a major player in its region. Its adjustment to the war and its outcome would have a major role in shaping regional
realities. A beaten, humiliated but still defiant Iran with essentially the same political system and approach to the region and the world would
be a long-term, growing danger similar to Iraq after the First Gulf War (or Germany after World War I). This would extend beyond the military
to include dangers in the other domains. The first conclusion we should draw from this exercise is that the U.S. government should be prepared
for a long and difficult conflict if it ultimately decides it must attack Iran. An attack might end quickly with few complications if Iran acts
“rationally.” We may not like what that means, however: One “rational” ending for the Iranians would be to accept their losses, declare
“victory” because the regime survived, lick their wounds, prepare for indirect retaliation, and resume nuclear activities on a clandestine basis.
But a war might not end cleanly, and the U.S. administration could find itself in a messy and protracted conflict. This suggests the need for both
an expansive approach to net assessment and deep and broad preparation not just of the military but also of the “home front” and the
economy, for Iran may choose to fight on these fronts as well as within its own borders and in the region. How well prepared is the United
States for this kind of fight? This is at least in part a question of national or societal resilience. If all options are on the table, as both Bush and
Obama Administration spokesmen have insisted, are preparations for employing all options being made ready? If not, then Iran may decide
that some of the options on the table lack credibility. The second conclusion we should take from this discussion is that, in attacking
Iran,
we would be trading one set of risks for another. Any option we choose, even choosing not to choose, will have
political as well as military-strategic consequences. As hard as it is to know the consequences of war, it is just as hard
to know the consequences of a decision to “learn to live” with a nuclear-armed Iran. Both courses are fraught
and logically open-ended. Thus the fear of potentially negative consequences from a war should not necessarily rule one out. Winston Churchill,
reflecting on British policy before World War II, wrote: If the circumstances are such as to warrant it, force may be used. And if this be so, it
should be used under the conditions which are most favourable. There is no merit in putting off a war for a year if, when it comes, it is a far
worse war or one much harder to win.17 In
any case, if the United States decides to attack Iran it should certainly
look before it leaps and prepare itself for a hard landing. Above all, U.S. leaders should not underestimate
the scope or misread the broad nature of war and should therefore organize the U.S. government in advance to prosecute it
coherently. In light of how we have fared with whole-of-government approaches and unity-of-command issues in Iraq and Afghanistan, this is
clearly a requirement we need to take seriously.
Solvency
Drilling Solves – Revenue
Increased drilling solves – generates money for more alternative energy research
Politicalticker, March 16, 2013, politicalticker is a place where people can post blogs, “Energy plan can 'break the cycle'
of oil dependence, Obama says,” http://politicalticker.blogs.cnn.com/2013/03/16/energy-plan-can-break-the-cycle-of-oildependence-obama-says/
Using revenue collected from drilling on public lands to fund alternative energy research will help
Americans break their dependence on oil, President Barack Obama predicted in his weekly address on Saturday. He was
speaking in Lemont, Illinois, where on Friday he laid out his plan at a laboratory conducting green energy research. "After years of talking about it,
we're finally poised to take control of our energy future," Obama said in his address, pointing to increased oil
production in the United States and the higher percentage of energy that now comes from renewable
sources. Despite the progress, Obama noted the recent spike in gas prices, calling it a "serious blow" to family budgets. "The only way we're going to break this
cycle of spiking gas prices for good is to shift our cars and trucks off of oil for good," Obama said. His plan pledges to put money earned
through increased royalties from oil and gas drilling on federal land to fund alternative fuel research. "We can
support scientists who are designing new engines that are more energy efficient; developing cheaper batteries that go farther on a single charge; and devising new
ways to fuel our cars and trucks with new sources of clean energy – like advanced biofuels and natural gas – so drivers can one day go coast-to-coast without using a
drop of oil," Obama said. In his address, the president advocated producing more oil and gas domestically as well as biofuels, solar power and wind power. Obama
has faced criticism from Republicans who say he's dragging his feet in approving the controversial Keystone XL pipeline, which would transport oil from Canada to
Texas. In 2012, Obama delayed approval of the pipeline until after the election. He's expected to make a final decision sometime this summer. A recent State
Department report found that the project would not adversely impact the environment. On Friday, a White House spokesman said the plan Obama laid out in
Illinois would have a far greater impact on securing America's energy independence than the Keystone pipeline. "There have been thousands of miles of pipelines
that have been built while President Obama has been in office, and I think the point is, is that it hasn't necessarily had a significant impact one way or the other on
addressing climate change," White House Deputy Press Secretary Josh Earnest said.
AT: No Oil In OCS
The OCS is key to solve- holds a TON of oil that can be recovered - reduces foreign
dependence
OCSGC 2013, Outer Continental Shelf Governors Coalition, March 20 2013, “Policy Positions “, http://ocsgovernors.org/policyth
positions/ //RD
According to the federal government, the U.S. OCS contains an estimated 88.6 billion barrels of
undiscovered, technically recoverable oil and 398.4 trillion cubic feet of undiscovered, technically
recoverable natural gas. Moreover, shallow areas in Atlantic, Eastern Gulf of Mexico and the Pacific have been identified as showing strong potential
for offshore wind development. Despite these vast resources, many of these areas remain closed to exploration and
production due to federal policies that restrict access. According to experts, even after over 50 years of OCS
exploration and development, 70% of total resources are yet to be discovered. Of this, more than half of
this potential exists in areas of the Outer Continental Shelf outside the central and western Gulf of Mexico. With the Interior
Secretary Salazar’s approval of the Proposed Final Five-Year Plan for Oil and Gas Leasing for 2012-2017 in August 2012, the Department has decided not to open
access to any new frontiers for the next five years, including in the Eastern Gulf of Mexico and the Mid- and South-Atlantic. The decision foregoing lease sales in the
Mid-Atlantic came despite strong bipartisan support from Virginia’s Congressional and Commonwealth officials for the reinstatement of lease sales off Virginia. The
exclusion of new frontier areas in this five-year plan means that exploration of these rich offshore areas will not proceed until at least 2018, if not later. Areas
of particular interest include: The Mid-Atlantic: Mean estimates of undiscovered technically recoverable
resources (UTRR) resources are 1.4 billion barrels of oil and 19.36 trillion cubic feet of gas; The SouthAtlantic: Mean estimates of UTRR are 500 million barrels of oil and 2 trillion cubic feet of gas; Eastern
Gulf of Mexico (parts are under Congressional moratorium under 2022): Mean estimates of UTRR are 5
billion barrels of oil and 16 trillion cubic feet of gas. Conversely, the OCS Governors Coalition is pleased with the progress in advancing
offshore wind development in many areas. Existing leases off the Northeast coast and future leases in additional areas will play an important role in providing
renewable electricity to coastal states and furthering energy diversity and security for coastal communities. The Coalition believes that resource evaluation and
leasing has been successful thus far due in part to the level of coordination between the states and the Bureau of Ocean Energy Management on leasing and
development decisions. Tasks forces developed and executed in states such as South Carolina and Virginia in many ways exhibit the type of communication and
coordination that should occur with all offshore energy development decisions. T he
OCS Governors Coalition strongly believes the
federal government must expand opportunities for offshore energy development. Rising global demand
for energy requires that the United States proactively pursue development of American resources – both
traditional and renewable – to minimize dependence on foreign energy. Furthermore, states must have a more active voice in determining
whether areas off their coasts are available for energy development.
The OCS has tons of oil- studies prove that would be a huge boost to the economy
API 2014, American Petroleum Institute, January, “Offshore Access to Oil and Natural Gas Resources”, http://www.api.org/policy-andissues/policy-items/exploration/~/media/Files/Oil-and-Natural-Gas/Offshore/OffshoreAccess-Primer-lores.pdf //RD
Increasing access to domestic sources of oil and natural gas would create new, good jobs when millions are still
looking for work; bring billions of dollars to federal and state treasuries as governments are scrambling for revenue;
reduce our balance of trade, and enhance America’s energy security. Access to offshore resources
currently off-limits in the Atlantic and Eastern Gulf of Mexico will benefit all Americans by providing
more oil and natural gas to fuel our economy and maintain our quality of life. A balanced “all-of-the-above” energy policy will
create jobs and spur investments in all forms of energy. A 2011 study by Wood Mackenzie1 estimated that exploring for
and developing oil and natural gas currently off-limits could result in increased production in the
amount of 4.2 million barrels of oil equivalent per day, support 420,000 jobs, and generate $313 billion
for state and federal governments.For the Atlantic Offshore: • Production is estimated to start 7 years after initial lease
sales, government revenues and job creation will begin the year of initial lease sales. • Oil and natural gas production is
projected to reach over 1.5 million barrels of oil equivalent per day 11 years after initial production. •
Atlantic OCS resource development is projected to support over 160,000 jobs 15 years after initial lease
sales, fluctuating between 140,000 and 160,000 jobs thereafter. • Lease sales could generate $8 billion in
government revenue over 16 years. Cumulative total government revenue, including lease, royalty, and Federal income tax revenue, is
projected to be $95 billion 18 years after initial lease sales, reaching approximately $14 billion per year in the final year of the study and
growing. For
the Eastern Gulf of Mexico: • Production is estimated to start 4 years after initial lease sales, government revenues and
job creation will begin the year of initial lease sales. • Oil and natural gas production is projected to reach over 1.6
million barrels of oil equivalent per day 14 years after initial production. • Eastern Gulf of Mexico OCS resource
development is projected to support over 160,000 jobs 18 years after initial lease sales. • Lease sales could
generate $16 billion in government revenue over 16 years. Cumulative total government revenue, including lease, royalty, and
Federal income tax revenue, is projected to be over $140 billion 18 years after initial lease sales, reaching approximately $17 billion per year the
final year and growing.
Large source of supply in the OCS
Steven Griles, Dep. Sec. @ DOI, 2-27-2003, “Energy Production on Federal Lands,” Hearing before the
Energy and Natural Resources Committee of the US Senate, http://www.gpo.gov/fdsys/pkg/CHRG108shrg86709/html/CHRG-108shrg86709.htm
Mr. Griles. America's public lands have an abundant opportunity for exploration and development of
renewable and nonrenewable energy resources. Energy reserves contained on the Department of the
Interior's onshore and offshore Federal lands are very important to meeting our current and future
estimates of what it is going to take to continue to supply America's energy demand. Estimates suggest
that these lands contain approximately 68 percent of the undiscovered U.S. oil resources and 74 percent
of the undiscovered natural gas resources. President Bush has developed a national energy policy that
laid out a comprehensive, long-term energy strategy for America's future. That strategy recognizes we
need to raise domestic production of energy, both renewable and nonrenewable, to meet our
dependence for energy. For oil and gas, the United States uses about 7 billion barrels a year, of which
about 4 billion are currently imported and 3 billion are domestically produced. The President proposed
to open a small portion of the Arctic National Wildlife Refuge to environmentally responsible oil and gas
exploration. Now there is a new and environmentally friendly technology, similar to directional drilling,
with mobile platforms, self- containing drilling units. These things will allow producers to access large
energy reserves with almost no footprint on the tundra. Each day, even since I have assumed this job,
our ability to minimize our effect on the environment continues to improve to where it is almost
nonexistent in such areas as even in Alaska. According to the latest oil and gas assessment, ANWR is the
largest untapped source of domestic production available to us. The production for ANWR would equal
about 60 years of imports from Iraq. The National Energy Policy also encourages development of
cleaner, more diverse portfolios of domestic renewable energy sources. The renewable policy in areas
cover geothermal, wind, solar, and biomass. And it urges research on hydrogen as an alternate energy
source. To advance the National Energy Policy, the Bureau of Land Management and the DOE's National
Renewable Energy Lab last week announced the release of a renewable energy report. It identifies and
evaluates renewable energy resources on public lands. Mr. Chairman, I would like to submit this for the
record.* This report, which has just come out, assess the potential for renewable energy on public lands.
It is a very good report that we hope will allow for the private sector, after working with the various
other agencies, to where can we best use renewable resource, and how do we take this assessment and
put it into the land use planning that we are currently going, so that right-of-ways and understanding of
what renewable resources can be done in the West can, in fact, have a better opportunity. The
Department completed the first of an energy inventory this year. Now the EPCA report, which is laying
here, also, Mr. Chairman, is an estimate of the undiscovered, technically recoverable oil and gas. Part
one of that report covers five oil and gas basins. The second part of the report will be out later this year.
Now this report, it is not--there are people who have different opinions of it. But the fact is we believe it
will be a good guidance tool, as we look at where the oil and gas potential is and where we need to do
land use planning. And as we update these land use plannings and do our EISs, that will help guide
further the private sector, the public sector, and all stakeholders on how we can better do land use
planning and develop oil and gas in a sound fashion. Also, I have laying here in front of me the two EISs
that have been done on the two major coal methane basins in the United States, San Juan Basis and the
Powder River Basin. Completing these reports, which are in draft, will increase and offer the opportunity
for production of natural gas with coal bed methane. Now these reports are in draft and, once
completed, will authorize and allow for additional exploration and development. It has taken 2 years to
get these in place. It has taken 2 years to get some of these in place. This planning process that Congress
has initiated under FLPMA and other statutes allows for a deliberative, conscious understanding of what
the impacts are. We believe that when these are finalized, that is in fact what will occur. One of the
areas which we believe that the Department of the Interior and the Bureau of Land Management is and
is going to engage in is coordination with landowners. Mr. Chairman, the private sector in the oil and gas
industry must be good neighbors with the ranchers in the West. The BLM is going to be addressing the
issues of bonding requirements that will assure that landowners have their surface rights and their
values protected. BLM is working to make the consultation process with the landowners, with the States
and local governments and other Federal agencies more efficient and meaningful. But we must assure
that the surface owners are protected and the values of their ranches are in fact assured. And by being
good neighbors, we can do that. In the BLM land use planning process, we have priorities, ten current
resource management planning areas that contain the major oil and gas reserves that are reported out
in the EPCA study. Once this process is completed, then we can move forward with consideration of
development of the natural gas. We are also working with the Western Governors' Association and the
Western Utilities Group. The purpose is to identify and designate right-of-way corridors on public lands.
We would like to do it now as to where right-of-way corridors make sense and put those in our land use
planning processes, so that when the need is truly identified, utilities, energy companies, and the public
will know where they are Instead of taking two years to amend a land use plan, hopefully this will
expedite and have future opportunity so that when the need is there, we can go ahead and make that
investment through the private sector. It should speed up the process of right-of-way permits for both
pipelines and electric transmission. Now let me switch to the offshore, the Outer Continental Shelf. It is
a huge contributor to our Nation's energy and economic security. The Chairman. Mr. Secretary,
everything you have talked about so far is onshore. Mr. Griles. That is correct. The Chairman. You now
will speak to offshore. Mr. Griles. Yes, sir, I will. Now we are keeping on schedule the holding lease sales
in the areas that are available for leasing. In the past year, scheduled sales in several areas were either
delayed, canceled, or put under moratoria, even though they were in the 5-year plan. It undermined
certainty. It made investing, particularly in the Gulf, more risky. We have approved a 5-year oil and gas
leasing program in July 2002 that calls for 20 new lease sales in the Gulf of Mexico and several other
areas of the offshore, specifically in Alaska by 2007. Now our estimates indicate that these areas contain
resources up to 22 billion barrels of oil and 61 trillion cubic feet of natural gas. We are also acting to
raise energy production from these offshore areas by providing royalty relief on the OCS leases for new
deep wells that are drilled in shallow water. These are at depths that heretofore were very and are very
costly to produce from and costly to drill to. We need to encourage that exploration. These deep wells,
which are greater than 15,000 feet in depth, are expected to access between 5 to 20 trillion cubic feet of
natural gas and can be developed quickly due to existing infrastructure and the shallow water. We have
also issued a final rule in July 2002 that allows companies to apply for a lease extension, giving them
more time to analyze complex geological data that underlies salt domes. That is, where geologically salt
overlays the geologically clay. And you try to do seismic, and the seismic just gets distorted. So we have
extended the lease terms, so that hopefully those companies can figure out where and where to best
drill. Vast resources of oil and natural gas lie, we hope, beneath these sheets of salt in the OCS in the
Gulf of Mexico. But it is very difficult to get clear seismic images.
New technology and studies indicates that there may be more oil than we thought
API 2014, American Petroleum Institute, January, “Offshore Access to Oil and Natural Gas Resources”, http://www.api.org/policy-andissues/policy-items/exploration/~/media/Files/Oil-and-Natural-Gas/Offshore/OffshoreAccess-Primer-lores.pdf //RD
America must pursue smart energy policy in order to continue as a global energy superpower. The U.S.
Outer Continental Shelf (OCS) is estimated to contain vast undiscovered oil and natural gas resources.
Unfortunately, the federal government has placed most of the OCS off-limits to energy exploration and
development. • The Bureau of Ocean Exploration and Management (BOEM) estimates that 88.6 billion barrels of oil
and 398.4 trillion cubic feet of gas have yet to be discovered on the U.S. OCS. • Unfortunately, BOEM’s
estimates are 30 years old. If Congress permits the use of state-of-the-art seismic surveying technology
in largely unexplored areas of the Atlantic OCS, we may discover an even greater abundance of oil and
natural gas. • Developing these oil and natural gas resources will be vital to achieving energy security,
growing our economy, and reducing government deficits.
AT: No Oil In OCS – Newest Studies
Your evidence all assumes previous estimates from 30 years ago, new technology
proves that a lot of oil exists and its environmentally friendly
API 2014, American Petroleum Institute, January, “Offshore Access to Oil and Natural Gas Resources”, http://www.api.org/policy-andissues/policy-items/exploration/~/media/Files/Oil-and-Natural-Gas/Offshore/OffshoreAccess-Primer-lores.pdf //RD
Why are Seismic Surveys Needed in the Atlantic OCS? The last surveys of the Atlantic Outer Continental Shelf (OCS)
were conducted 30 years ago. Due to technological advances, existing estimates of the available energy
are out-of-date. • Existing resource estimates for the Atlantic OCS are: » 3.3 billion barrels of oil » 31.3
trillion cubic feet of natural gas • Today, seismic surveys using modern technology produce sub-surface
images which are much clearer than those from decades ago. • Exploration and development activities
generally lead to increased resource estimates. For example, in 1987 the Minerals Management Service
estimated only 9.57 billion barrels of oil in the Gulf of Mexico. With more recent seismic data acquisition
and additional exploratory drilling, that estimate rose in 2011 to 48.4 billion barrels of oil — a fivefold
increase. Modern offshore oil and natural gas exploration requires the use of seismic surveys. •
Seismic surveys are the only feasible technology available to accurately prospect for oil and natural
gas reserves offshore. • Seismic surveys have been used for decades to assess the location and size of
potential oil and natural gas deposits, which often lay several miles beneath the ocean floor. • Modern
seismic surveys make offshore energy production safer and more efficient by greatly reducing the drilling
of “dry holes” (where no oil or gas is found). How are Seismic Surveys Performed? Seismic surveys use
compressed air to create sound waves that reflect back to the surface. • Seismic surveys are undertaken with
consideration of potential impacts to the marine environment. • The seismic source creates sound waves of short
duration by releasing compressed air into the water. • The sound generated is reflected from subsurface rock layers and “heard” by sensors
that are towed behind the survey vessel. • The data collected is analyzed and used to help locate potential geologic structures and energy
resources beneath the ocean floor. • The sound produced during seismic surveys is comparable in magnitude to many naturally occurring and
other man-made ocean sound sources, including wind and wave action, rain, lightning strikes, marine life, and shipping. • Survey operations are
normally conducted at a speed of approximately 4.5 to 5 knots (~5.5 mph). As a result, the sound from the seismic source, which is typically
activated every 10-15 seconds, does not last long in any one location and is not at full volume 24 hours a day.
Seismic Surveying is super safe- we have 4 decades of world-wide studies on our side
API 2014, American Petroleum Institute, January, “Offshore Access to Oil and Natural Gas Resources”, http://www.api.org/policy-andissues/policy-items/exploration/~/media/Files/Oil-and-Natural-Gas/Offshore/OffshoreAccess-Primer-lores.pdf //RD
What Precautions does the Industry take to Protect Marine Animals? The oil and gas industry has
demonstrated the ability to operate seismic exploration activities in a manner that protects marine life.
Marine seismic exploration is carefully regulated by the federal government and managed by the operator to
avoid impacting marine animals. • Four decades of world-wide seismic surveying activity and scientific
research related chiefly to marine mammals have shown no evidence that sound from seismic activities
has resulted in physical or auditory injury to any marine mammal species . Likewise, there is no
scientific evidence demonstrating biologically significant adverse impacts on marine mammal
populations. • Nevertheless, the industry implements mitigation measures to further reduce the
negligible risk of harm to marine mammals. Mitigations measures are standard operating procedures
designed to minimize impacts to marine life. Trained marine mammal observers are onboard to watch for animals.
Operations stop if a marine mammal enters an “exclusion zone” around the operation and are not
restarted until the zone is all clear for at least 30 minutes. When starting a seismic survey, operators use
a ramp- up procedure that gradually increases the sound level being produced, allowing animals to leave
the area if the sound level becomes uncomfortable. What is the Current State of Science and Research?
Peer-reviewed science and research suggest no evidence of injury to marine mammals as a result of
sound emitted during seismic surveys. • Based on both available scientific knowledge and operational experience, there is no
evidence to suggest that the sound produced during an oil and gas industry seismic survey has resulted
in any physical or auditory injury to a marine mammal. • Research studies and operations monitoring
programs designed to assess the potential impacts from seismic surveys have not demonstrated
biologically significant adverse impacts on marine mammal populations. • Industry continually monitors
the effectiveness of the mitigation strategies it employs and funds research to better understand
interactions between E&P operations and marine mammals. • Not all marine life hears the same frequencies equally
well. Much like the differences in hearing between humans and bats or dogs, some marine animals hear well at higher frequencies, and
relatively poorly at lower frequencies. Others hear better at lower frequencies. • Some studies have shown that marine mammal hearing
sensitivity may be temporarily affected if exposed to sound at levels encountered very close to an operating seismic sound source. Other
studies have found that marine mammals did not react to sounds that would only be realized within a few tens of meters of a typical seismic
array. The
E&P industry remains committed to improving the scientific understanding of the impacts of
our operations on marine life. • To provide the utmost safety precautions, seismic surveys in the U.S.
Outer Continental Shelf are only conducted with measures in place to protect animals from high sound
exposure levels. • The best available scientific information also indicates that the level of sound required to injure dolphins may be higher
than previously thought. • Animal strandings — which opponents of oil and natural gas production incorrectly claim are due to seismic surveys
— can occur for a number of reasons, e.g., sickness, disorientation, natural mortality, extreme weather conditions or injury. Natural
occurrences of stranded marine mammals have been documented in records dating from the 7th century.
New Tech indicates oil is abundant - drilling would stimulate the economy, be
environmentally friendly and its popular
Green 2014, Mark ,February 27 , Writer for Energy Tomorrow, “A Step forward for Jobs and Security”,
th
http://energytomorrow.org/blog/2014/february/a-step-forward-for-jobs-and-security //RD
The federal government has released its environmental review on the potential impacts of seismic
surveying on the Atlantic outer continental shelf (OCS) – testing that’s key to future oil and natural gas
development off the U.S. coast, from Delaware to central Florida. That development could significantly add to
domestic energy production, create jobs and stimulate economic growth and strengthen America’s
energy security. By permitting seismic surveying in the Atlantic and including Atlantic lease sales in the
federal government’s next five-year leasing plan, we could see major benefits, according to a study by
Quest Offshore Resources: Nearly 280,000 jobs created by 2035. $195 billion in cumulative investment and
operational spending by oil and natural gas operators between 2017 and 2035. $23.5 billion per year contributed to the
U.S. economy. $51 billion in cumulative revenue to government. By 2035 offshore oil and natural gas development
could produce an incremental 1.3 million barrels of oil equivalent per day – about 70 percent of the current output from the Gulf of Mexico. See more at: http://energytomorrow.org/blog/2014/february/a-step-forward-for-jobs-and-security#sthash.bBdL0H8m.dpuf Quest’s chart
showing job creation: Quest_jobs And investment and operational spending by oil and natural gas operators: quest_investment An interactive
Atlantic OCS map showing potential state-by-state economic benefits, according to Quest: The
key to jobs, economic stimulus
and more domestic energy production from these offshore areas is two-fold: (1) Securing permission for
seismic surveying; and (2) Including the Atlantic OCS in the government’s 2017-2022 plan for offshore
lease sales. The two are inextricably linked. Seismic surveying involves recording the way sound waves generated
near the surface reflect off rocks beneath the ocean floor. The information is used to produce detailed,
three-dimensional maps that allow engineers to pinpoint the safest and most efficient places to drill.
Such information is critical to potential oil and natural gas operators as well as the federal government. Yet, surveying involves
significant investment that surveying companies are unlikely to make if the area to be surveyed isn’t a candidate for future leasing, signified by
being included in the government’s five-year plan. API’s Erik Milito, director of upstream and industry operations, told reporters during a
conference call that congressional and executive branch moratoriums on Atlantic OCS development were lifted in 2008 and that the process of
developing the environmental review for seismic surveying began in 2009: “(Historically), without having the promise to actually get out there
to lease and develop those areas you didn’t have the interest in going out there and doing the seismic work. Once those moratoriums were
lifted and we saw announcements from the administration … that the Atlantic would be available for potential leasing opportunities, at that
point you actually saw seismic companies actually submitting applications to shoot seismic. … The good news is we’ve gotten to this point
which will allow us to move forward, hopefully, with the permitting of the seismic activity and eventually the leasing opportunities.” The
government’s new environmental review examines the potential impacts of seismic surveying on marine
life. Milito said seismic testing has been conducted safely in the Gulf for decades. The last surveying in
the Atlantic OCS occurred about 30 years ago, he said, which means resource estimates there are far out
of date. Milito described the care with which seismic surveying is conducted: “Like all offshore
operations, seismic surveys are highly regulated, and surveyors follow strict guidelines to protect marine
life. The process begins with a soft-start – a technique that gradually increases sound levels, allowing animals that may be sensitive to this
sound time to leave the area. Onboard visual observers and acoustic monitoring devices are also used. If they detect sensitive marine life in the
vicinity, then all operations stop immediately and are restarted only when the area is clear.” Here’s a video showing the process: Industry will
study and analyze the government’s new environmental review. The hope is the process moves forward, Milito said: “By
permitting
seismic surveys in the Atlantic and including Atlantic lease sales in the next five-year leasing plan, the
Obama administration can build a long-term path to new jobs for American workers, new revenue for
the government, and greater energy security for all of us. This path has broad and bipartisan support
from the public, local officials, governors and members of Congress, and our industry is ready to do its
part.”
AT: Drilling too slow
Shell has explored reserves and tested drilling – ready for lifting of the moratorium
Miguel Llanos 12 has been an NBC writer since 1996 – has a master’s degree in International Journalism from USC, “In Arctic oil battle,
Shell starts preliminary drilling”, 9/9/2012, http://usnews.nbcnews.com/_news/2012/09/09/13763372-in-arctic-oil-battle-shell-startspreliminary-drilling?lite
More than 20 years after the last drill bit went into the Chukchi Sea floor off northern Alaska,
a Shell drilling rig on Sunday began
work that the company hopes will lead to a bonanza that adds to its bottom line and extends Alaska's oil economy. "Today
marks the culmination of Shell’s six-year effort to explore for potentially significant oil and gas reserves,
which are believed to lie under Alaska’s Outer Continental Shelf," Shell Alaska Vice President Pete Slaiby said in a
statement. Welcomed by the Obama administration, the exploration in Alaska's Arctic waters has become a major battleground for
environmental groups, which fear oil spills in the pristine area already threatened by warming temperatures and reduced sea ice. "The melting
Arctic is a dire warning, not an invitation to make a quick buck," said Dan Howells, a campaign director for Greenpeace. Shell has paid the U.S.
$2.8 billion for lease rights to areas in the Chukchi and neighboring Beaufort Sea, and the U.S. estimates those waters hold 26 billion barrels of
recoverable oil and 130 trillion cubic feet of natural gas. On Aug. 30, Interior Secretary Ken Salazar announced that Shell, even though its spill
response barge was not yet certified by the Coast Guard, would be permitted to drill pilot holes and then dig what's called a cellar to hold a
critical safety device. The pilot holes will be 1,300 feet below the ocean floor and roughly 4,000 feet above a known petroleum reservoir. Shell
argues there's little chance of a spill like BP's 2010 Gulf of Mexico disaster. Drilling
will be in water about 130 feet deep, it
says, versus 5,000 at the site of the gulf spill, and wellhead pressure is expected to be far less. Support
vessels could quickly choke off and cleanup any spill, Shell adds. Workers on Friday moored the drill ship, the Noble
Discoverer, in heavy seas with eight anchors that each weigh 15 tons. The diameter of the circular pattern of anchors is more than 6,500-feet, it
added. The immediate goal is to dig a 20-by-40-foot mud-line cellar that will house a blowout preventer below the seafloor, protecting it from
ice scraping the bottom. Shell's oil spill response barge remains in Bellingham, Wash., and is expected
weekend, Shell said.
to undergo sea trials over the
Drilling occurs immediately – companies prepared
Elizabeth Arnold 9, “Battle Over Offshore Drilling In Arctic Dwarfs ANWR”, 4/15/2009, NPR,
http://www.npr.org/templates/story/story.php?storyId=103119177
Melting ice in the Arctic may not be good for species that live there, but it does mean those icy waters are much more
accessible and cost-effective places to drill for oil and gas. Interior Secretary Ken Salazar was in Alaska this week as part of
an "information gathering" tour to help craft a new Outer Continental Shelf drilling policy. After two days of public testimony from those for
and against offshore drilling, Salazar pronounced Alaskans passionate and divided. Just over a year ago, the oil and gas industry bid $2.6 billion
for drilling rights in the Chukchi Sea, located in the Arctic between Alaska and Russia. It's the largest oil and gas lease sale in history, and it's
staggering when compared with the $7 million that the same leases went for in 1991. Though rapidly retreating sea ice makes it easier and
more cost-effective to drill in the Chukchi Sea, it also means the area is more fragile. Just about every marine mammal and seabird in the
Chukchi Sea is already endangered or a candidate for listing. And, the opposition from native villages that rely on fish, walrus, seals and whales
for subsistence dwarfs the fight over the Arctic National Wildlife Refuge. Melting Ice Could Mean More Drilling, More Controversy The biggest
lease of the most recent sale went to Shell Gulf of Mexico, which spent $105 million for rights in the Chukchi Sea. Shell already had bought
leases even further north and was
ready with rigs when then-President George W. Bush lifted the ban on drilling along the
Outer Continental Shelf. "We are drill-bit ready to move in the Arctic right now, and this is stuff that can
happen right now, and with a few things going our way, we will be ready to go in 2010," says Pete Slaiby, Shell's Alaska general manager.
Oil companies are eager to drill
Jennifer Dlouhy 14 covers politics and energy policy for the Houston Chronicle, Clean Water Land and Coast, 3/19/14,
http://www.cleanwaterlandcoast.com/oil-companies-bid-big-bucks-gulf-drilling/
The relatively bifurcated approach to Gulf drilling is nothing new. The geology of shallow Gulf acreage tends to be better known and cheaper to
explore, making it appealing to smaller players, in contrast to more expensive and challenging deep-water development. “Deep water
continues to lead, but today’s bidding also showed that the shelf is still worth pursuing,” said Randall Luthi, head of the National Ocean
Industries Association. “The majors demonstrated once again that
they have the revenue to invest in the deepwater frontier areas, and smaller operators also showed they are serious investors on the shelf as well
as in deep water.” Commitment to the Gulf Luthi called the industry’s commitment to the Gulf “remarkable given
the relative ease of producing oil and natural gas onshore, the expansion of competing offshore programs in other
countries and some continuing regulatory uncertainty here at home.” Oil industry representatives in Washington, D.C. said the success of
Wednesday’s sale should
encourage the Obama administration to put more offshore acreage on the auction
block. American Petroleum Institute upstream director Erik Milito urged the Interior Department to sell leases off the East Coast as part of its
next five-year strategy for the United States’ outer continental shelf. “Every lease sale held in the U.S. strengthens our hand
as an energy superpower,” Milito said.’’
Add-Ons (In Progress, Don’t Read)
Revenue Add-On
Expanded offshore drilling is key to raising government revenue
Brian Straessle, 3-19-2014, "API: Gulf Lease Sales Show Benefits of Opening Atlantic to Oil &amp; Gas
Activity," No Publication, http://www.api.org/news-and-media/news/newsitems/2014/mar-2014/apigulf-lease-sales-show-benefits-of-opening-atlantic-to-oil-gas-activity
Offshore lease sales today in the Central and Eastern Gulf of Mexico highlight what Americans could gain
by opening additional areas to offshore oil and natural gas development. “Every lease sale held in the
U.S. strengthens our hand as an energy superpower,” said API Director of Upstream and Industry
Operations Erik Milito. “Offshore lease sales have raised more than $17.3 billion for the government
over the last ten years and allowed our industry to create more jobs and produce more energy here at
home. Holding lease sales in the Atlantic and more of the Eastern Gulf of Mexico would make America
stronger economically and diplomatically.” Opening the Atlantic Outer Continental Shelf to oil and
natural gas development in the government’s next five-year offshore leasing plan could create nearly
280,000 new jobs, raise $51 billion in new revenue for the government, and add up to 1.3 million barrels
of oil equivalent per day to domestic energy production – which is about 70 percent of current output
from the Gulf of Mexico – according to a study by Quest Offshore Resources.
Revenues stave off effects of the deficit
Amy McIntire 14 has a JD from Notre Dame and Major in Business, TEXAS JOURNAL OF OIL, GAS, AND
ENERGY LAW, 2/24/2014, “OIL AND GAS DEVELOPMENT ON THE OUTER CONTINENTAL SHELF: THE
UPHILL BATTLE FOR STATE INPUT INTO FEDERAL POLICY”, http://tjogel.org/wpcontent/uploads/2014/02/10_Volume-9-Issue-1-McIntire_Final.pdf)
Under the current OCS leasing system, the federal government has jurisdiction and control over leasing
activities, and the coastal states share in the total revenue generated by offshore leasing.68 Total
revenue from oil and gas leasing comes in three forms: (1) bonus bids, (2) rental payments, and (3)
royalties.69 Because lease sales are conducted through a competitive, sealed bidding process, successful
bidders must make an up-front cash payment, known as a “bonus bid,” to secure leases.70 Once leases
are secured, lessees must make annual rent payments, which typically range from $5.00 to $9.50 per
acre depending on water depths.71 Finally, revenue is generated through the imposition of “royalty
rates” on the value of oil and gas production.72 Typically, royalty rates of 12.5% or 16.7% are imposed
upon the value of the lessee’s production, depending on location, and on occasion, the royalty rate may
even be higher than 16.7%.73 Money from these three sources combines to yield massive federal
revenue. In 2011 alone, federal revenue from offshore leases reached a total of $6.5 billion.74
Meanwhile, coastal states receive a minority percentage of total revenue, with specific amounts varying
by state. Unsurprisingly, revenue sharing disputes have generated the bulk of conflict between states
and the federal government.75 Total revenue from OCS leasing is split amongst federal parties and
coastal states. At the federal level, revenue is divided amongst the Land and Water Conservation
Fund,76 the National Historic Preservation Fund,77 and, most prominently, the U.S. Treasury. The
amount of revenue that coastal states receive has fluctuated throughout the history of OCS leasing.
Section 8(g) of the 1978 Amendments to OCSLA provided coastal states with the right to a “fair and
equitable” share of all revenue from oil and gas leases within the three to six mile zone of a state’s
coastline, but the statute did not specify how that sharing was to take place, and failed to provide
guidance as to what constituted a “fair and equitable” share.78 In 1985, the OCSLA Amendments settled
this uncertainty and provided states with twenty-seven percent of all OCS revenue derived from leases
granted in the zone from three to six nautical miles offshore.79 However, since the enactment of the
1985 Amendments, states have argued that they deserve a greater share of OCS revenue due to the
significant impact of OCS development on their infrastructure and coastline.80 From lobbying to
lawsuits, states have taken a variety of actions to advocate their cause. For instance, in 2011, governors
of several coastal states formed the Outer Continental Shelf Governors Coalition (OCSGC) “to promote a
constructive dialogue on OCS energy-resource planning and development amongst coastal state
governors and federal policy makers.”81 According to its mission statement, the OCSGC focuses on the
stewardship of coastal resources and on improving communication between states and the federal
government,82 but in practice, most of the OCSGC’s actions center upon obtaining more favorable
revenue sharing agreements. Recently, the OCSGC made a formal request to the Obama administration
that states hosting offshore development receive increased revenue associated with the resulting
energy production and urged the Obama administration to allow coastal states to play a more
substantial role in the development of federal policy.83 In response, opponents of these state-oriented
proposals argue that revenue from OCS leasing is vital to the federal Treasury and that the fiscal
consequences of losing a portion of these revenues would be devastating, especially given the current
national deficit.84 These opponents emphatically contend that there is “no justification for using . . .
significant national resources to provide benefits only for a few coastal states and their citizens.”85
Iraq Add-On
Any US intervention in Iraq would be to secure the privatization of Iraqi oil
Nicola Nasser ’14, Arab journalist in Kuwait, Jordan, UAE, and Palestine, 6-28-14, Center for Research
on Globalization, “Iraqi Hydrocarbon Prize of U.S. Invasion in Danger?”,
http://www.globalresearch.ca/iraqi-hydrocarbon-prize-of-u-s-invasion-in-danger/5388977
Excluding “boots on the ground” and leaving combat missions to local and regional “partners,” President
Barak Obama and his administration say the United States keeps “all options on the table” to respond
militarily to the terrorists’ threat to “American interests” in Iraq, which are now in “danger.” Similarly,
former UK Prime Minister, Tony Blair, on TV screens and in print has recently urged western
governments to “put aside the differences of the past and act now” and to intervene militarily in Iraq “to
save the future” because “we do have interests in this.” Both men refrained from indicating what are
exactly the “American” and “western” interests in Iraq that need military intervention to defend, but the
major prize of their invasion of Iraq in 2003 was the country’s hydrocarbon assets. There lies their
“interests. On June 13 however, Obama hinted to a possible major “disruption” in Iraqi oil output and
urged “other producers in the Gulf” to be “able to pick up the slack.” The United States has already
moved the aircraft carrier USS George H.W. Bush, escorted by the guided-missile cruiser USS Philippine
Sea and the guided-missile destroyer USS Truxtun, from the northern Arabian Sea into the Arabian Gulf
(Persian according to Iran) “to protect American lives, citizens and interests in Iraq,” according to Rear
Admiral John Kirby, the Pentagon spokesman, on June 14. Media is reporting that U.S. intelligence units
and air reconnaissance are already operating in Iraq. The unfolding collapse of the U.S. proxy
government in Baghdad has cut short a process of legalizing the de-nationalization of the hydrocarbon
industry in Iraq, which became within reach with the latest electoral victory of the Iraqi prime minister
since 2006, Noori al-Maliki.Iraqi prime minister Nouri al-Maliki Iraqi prime minister Nouri al-Maliki AntiAmerican armed resistance to the U.S. proxy ruling regime in Baghdad, especially the Baath-led
backbone, is on record as seeking to return to the status quo ante with regard to the country’s strategic
hydrocarbon assets, i.e. nationalization. De-nationalization and privatization of the Iraqi oil and gas
industry began with the U.S.-led invasion of the country in 2003. Al-Maliki for eight years could not pass
a hydrocarbons law through the parliament. Popular opposition and a political system based on
sectarian distribution of power and “federal” distribution of oil revenues blocked its adoption. Ruling by
political majority instead by sectarian consensus was al-Maliki’s declared hope to enact the law. AlMaliki’s plans towards this end together with his political ambitions for a third term were cut short by
the fall to armed opposition on this June 10 of Mosul, the capital of the northern Ninawa governorate
and second only to Baghdad as Iraq’s largest metropolitan area. Three days on, with the fighting moving
on to the gates of Baghdad, “the most important priority for Baghdad right now is to secure its capital
and oil infrastructure,” a Stratfor analysis on June 11 concluded. The raging war in Iraq now will
determine whether Iraqi hydrocarbons are a national asset or multinational loot. Any U.S. military
support to the regime it installed in Baghdad should be viewed within this context. Meanwhile this
national wealth is still being pillaged as spoils of war.
Oil most probable justification for intervention in Iraq
David Welna ’14, NPR’s national security correspondent, winner of the 2011 Everett McKinley Dirksen Award for Distinguished Reporting
of Congress, winner of the Overseas Press Club award winner of the Latin American Studies Association annual award for distinguished
coverage of Latin America, and winner of the Nieman Fellowship at Harvard University, 6-17-14, NPR,
http://www.npr.org/2014/06/17/323031075/exactly-what-could-or-should-the-u-s-achieve-in-iraq
Still, according to Persian Gulf expert Kenneth Pollack of the Brookings Institution, Americans are wary
of new entanglements after a decade of wars in Iraq and Afghanistan. Pollack, who once strongly backed
the overthrow of Saddam Hussein, now says the U.S. has no good options in Iraq. He thinks America's
interest in Iraq goes beyond terrorism — it's also clearly economic. "It will be a real challenge for an
American president to go back to the American public and say, you know what, our economy rests still
on the oil market, and the oil market is heavily influenced by whatever happens in places like Iraq, and if
we don't deal with the problems in Iraq, we could face a severe recession at home," he says. "But I do
think that that is probably the most compelling argument that can be made."
Inability to regain lost territories means US intervenes to secure oil resources.
Bassem El-Emadi ’14, writer for the Middle East Monitor, 6-20-14, Middle East Monitor, “An analysis of the events in Iraq and their
regional implications”, https://www.middleeastmonitor.com/articles/middle-east/12261-an-analysis-of-the-events-in-iraq-and-their-regionalimplications-
Perhaps one of the consequences to come out of the events in Iraq is the US decision to lift its siege off
of the "moderate" Free Syrian Army, which initially banned all parties from arming them or supporting
them financially in any way. America's reaction to the events in Iraq came much quicker than its reaction
to the events in Syria as Barak Obama delivered a speech addressing the situation merely a few days
after the conflict broke out. Obama sent several jets to the Gulf to support any possible military option.
He was also clear on his desire to support the Iraqi government in their struggle against ISIS; however he
acted upon this desire in a way that strengthens the current anti-Sunni status quo, one that gives Sunni
leaders a position in the current government that does very little to solve the problem that was created
by recent events. Although Obama has hinted that American intervention in Iraq may not be strong,
eventually the truth of the matter will force him to intervene in a way that is more direct than what he
initially intended and this is primarily due to the fact that the Iraqi regime is not capable of regaining the
territories that it has recently lost. Moreover, Iran is heavily involved in Syria and will not be able to get
heavily involved in Iraq. Iran will soon find itself in the midst of a vicious cycle that will be very difficult to
get out of. The main reason for American involvement in Iraq is due to the dire economic consequences
that will ensue if Iraqi petroleum is no longer available in the international market. The United States in
particular will experience various economic instabilities with the lack of reliable petroleum resources
and it is for this reason that Iraq remains among the United States' priorities. As for Iran, its president
will make sure to benefit from every single opportunity and for this reason, it would not be surprising if
he announces Iran's willingness to stand with America in the fight against "terror".
AT: Offcase
AT: Environment DA
AT: Environment DA – Regulations Solve
Regulations prevent environmental impacts from drilling
Bureau of Ocean Energy Management, November 2011, “Proposed Outer Continental Shelf Oil & Gas
Leasing Program 2012-2017,”
http://www.boem.gov/uploadedFiles/Proposed_OCS_Oil_Gas_Lease_Program_2012-2017.pdf
The Deepwater Horizon blowout and oil spill exposed the overconfidence in the safety of offshore
drilling that had developed over time. Because there had not been a major blowout or drilling accident
in U.S. waters in decades, both government and industry underestimated the well control issues posed
by offshore drilling, particularly in deep and ultra-deepwater. This Proposed Program is informed by
both our better understanding of the risks posed by offshore drilling and the substantial measures that
have been implemented since the Deepwater Horizon event to address and reduce those risks.
Immediately after Deepwater Horizon, the Bureau of Ocean Energy Management, Regulation and
Enforcement (BOEMRE) – with its functions now divided between BOEM and the Bureau of Safety and
Environmental Enforcement (BSEE) – imposed heightened standards for offshore drilling operations,
which included new requirements for well design and integrity and the testing and maintenance of
blowout preventers (BOPs). The BOEMRE also introduced, for the first time in U.S. waters, new
performance-based standards that require operators to develop Safety and Environmental Management
Systems programs that, among other things, systematically and thoroughly evaluate the hazards
involved with offshore facilities and operations and implement measures to address those hazards.
These new and heightened standards are designed to help prevent a loss of well control or a spill from
happening. While these measures have made offshore drilling safer, the risk of an accident cannot be
eliminated and government and industry must be prepared in the event of a loss of well control or a
spill. After Deepwater Horizon, BOEMRE issued new guidance to operators that revised the
methodology for calculating the worst case discharge potential of individual wells to provide more
accurate estimates of true worst case scenarios. Operators must submit Oil Spill Response Plans that
demonstrate sufficient response capacity to address these revised worst case discharge estimates, as
well as other enhancements based on experience with the response to Deepwater Horizon. Most
significantly, unlike prior to Deepwater Horizon, operators using subsea BOPs or drilling from a floating
facility must demonstrate in advance that they have access to and can deploy an effective subsea
containment system in the event of a loss of well control. This includes systems, such as a capping stack,
to shut in the well and, if necessary, to capture and contain flow from a well. Industry has developed
these systems, and they are available for every covered well in the Gulf of Mexico that has been
permitted since Deepwater Horizon. The government’s oversight of offshore oil and gas operations has
also undergone broad and substantial reforms. Prior to Deepwater Horizon, the Minerals Management
Service (MMS) had jurisdiction over offshore activities, was severely under-resourced, and saddled with
multiple, sometimes conflicting missions that included responsibility for leasing and environmental
reviews, safety oversight, and the collection of revenue from offshore operations. Soon after the
Deepwater Horizon explosion, the Secretary of the Interior abolished MMS. In its place, the Secretary
established BOEMRE and announced that the DOI’s management of OCS resources and oversight of
offshore energy activity would be reorganized into three new agencies – BOEM, BSEE, and the Office of
Natural Resources Revenue (ONRR). That reorganization is now complete, and three strong,
independent agencies with clear and distinct missions have been established to manage and oversee
safe and environmentally responsible offshore activity that helps to meet the Nation’s energy needs and
provides a fair return to the public. The BOEM is charged with managing the nation’s offshore resources
in a balanced way that promotes prompt and environmentally responsible development. The BSEE is a
safety authority responsible for enforcing safety and environmental protection standards. Finally, ONRR
is responsible for collecting the public’s share of revenue from resource development on public lands
and waters. These new agencies will provide more effective and appropriately balanced management
and oversight of the nation’s offshore oil and gas resources
Regulations sufficient now - BP spill response resolved major issues
Eric Smith, professor at UC Santa Barbara 8-30-2010 (Foreign Policy, "Think Again: Offshore Drilling",
http://www.foreignpolicy.com/articles/2010/08/30/think_again_offshore_drilling)
A retooling of the U.S. Minerals Management Service (MMS), which oversees offshore drilling, is
certainly in order, but waiting for a perfect world makes no sense. The regulatory problems are well on
their way to being solved. The blitz of publicity given to oil-industry regulation after the spill and the first
round of bureaucratic reforms announced by Interior Secretary Ken Salazar in May are already having a
huge impact. The people in charge of safety and environmental protection are now in a separate agency,
which no longer reports to the administrators who are under pressure to increase oil revenues. They are
also getting more money for inspections and more time to conduct them. Their work is also being
monitored by reporters looking for a sensational story. Together, these changes will make offshore oil a
lot safer. Before the blowout, MMS actually seemed to be doing a pretty good job. There had been no
major oil spill from an offshore platform in U.S. waters since 1969. Both the number of spills and the
amount of oil spilled into the ocean had been declining decade by decade since the 1970s. Offshore
drilling was getting safer even as more oil was being produced. The result was that both government
regulators and oil companies let complacency and overconfidence set in. MMS became a captured
agency.
AT: Environment DA – Cleanup Funds Check
Cleanup funds check spill impacts
Lucas Davis, Assoc. Prof Econ @ Berkeley, June 2012, “Modernizing Bonding Requirements for Natural
Gas Producers,” Brookings
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20bonds%20davis/06_bonds_da
vis
The presence of so many small and medium-sized firms in hydraulic fracturing raises concerns about the
ability to finance environmental cleanups. When environmental damages occur, small producers may
lack the resources to finance necessary cleanups and to compensate those who have been affected.
After the Deepwater Horizon accident, British Petroleum (BP) immediately established a $20 billion fund
from which to pay for the cleanup and to compensate individuals or groups that would be affected (see
Box 3). Most companies that perform hydraulic fracturing do not have this level of financial resources. It
is relatively easy for small producers to enter and exit the market, and bankruptcy laws limit the liability
of any producer to the total value of the company. A single severe accident for most of these producers
would put them into bankruptcy, leaving the cleanup to be financed with public funds.
AT: Environment DA – Drilling Good
Offshore drilling reduces natural oil seepage – benefits the environment
Rucker 13. 10/7/13. Craig Rucker, executive director and co-founder of CFACT, Committee For A
Constructive Tomorrow, a DC based group to promote a positive voice on environment and
development issues. “The environmental benefits of offshore drilling” CFACT
http://www.cfact.org/2013/10/17/the-environmental-benefits-of-offshore-drilling/ //NM
What can we do to clean up our oceans? Well one surprising answer may be to open up our coastlines
to more offshore oil drilling, according to Ben Lieberman, a senior policy analyst at the Heritage
Foundation. Lieberman explains: “There’s tremendous economic advantages to opening up more of America’s
territorial waters to oil exploration and drilling, but there are environmental advantages as well. Most oil
spills are not due to drilling but from natural seepage from the sea floor, and studies have shown that oil
drilling reduces the pressure on those seeps and results in less oil pollution. So offshore drilling truly could be a winwin situation for the American people.”
Turn - aff trades off with foreign supplies and transports, which are worse
Eric Smith, professor at UC Santa Barbara 8-30-2010 (Foreign Policy, "Think Again: Offshore Drilling",
http://www.foreignpolicy.com/articles/2010/08/30/think_again_offshore_drilling)
With the exception of Canada, the major oil
suppliers to the United States -- Saudi Arabia, Nigeria, Venezuela, Mexico,
and Russia -- all have autocratic governments that can get away with damaging their environment without
any political repercussions. And they know that protecting the environment costs money and reduces profits. So, by
and large, they don't do it. Some of the resulting disasters remain local. Take Nigeria, which has about 2,000 active oil spills and
spills an amount of crude equal to the Exxon Valdez each year. Oil fouls fields, rivers, and Nigeria's coast. It destroys
ecosystems and sickens people, but it doesn't affect Americans. Other environmental injuries have worldwide effects. Methane, a
common byproduct of oil production, is a powerful greenhouse gas. In the United States, methane is
typically captured and pumped into the natural gas system or reinjected into oil wells. Relatively little
escapes. In many other countries, however, methane is simply vented into the air, where it contributes to
global warming. Mexico produces less than half the oil the United States does every year, but it vents six times
more methane into the atmosphere. Finally, shipping oil has environmental costs. Oil tankers consume the
equivalent of 1 to 3 percent of their oil on their voyages, which contributes to air pollution and global warming. Even worse,
some tankers don't make it. The Amoco Cadiz broke up off the coast of France. The Atlantic Empress and
the Aegean Captain collided off Trinidad and Tobago, and many others went down as well (the Castillo de
Bellver off South Africa, the Irenes Serenade off Greece, the Torrey Canyon off Britain, the Urquiola off Spain, etc.). From 1971 through
2009, tankers spilled more than 40 million barrels of oil worldwide (not counting oil that was spilled because of wars,
sabotage, and terrorist attacks). Exactly how much was headed for the United States is not clear, but because Americans consume one-quarter
of the world's oil, they are probably responsible for about a quarter of those spills. That
amount dwarfs the 200,000 barrels
spilled by the U.S. offshore oil industry during those years. The Exxon Valdez alone lost more oil than the
offshore oil industry did in 30 years. Oil tankers are far safer than they used to be, but importing oil remains a risky business.
Turn - most oil spills occur in transit - domestic drilling solves
Shaw et al, 1987 (BILL SHAW, BRENDA J. WINSLETT, FRANK B. CROSS, Natural Resources Journal,
"The Global Environment: A Proposal to Eliminate Marine Oil Pollution",
http://lawschool.unm.edu/nrj/volumes/27/1/08_shaw_global.pdf)
Marine oil
pollution is a direct result of the Western industrialized world's dependence on the petroleum of the oilrich Middle-East.' Es- timates of oil lost or discharged to the sea by tankers during transport range from one
to two million tons annually.2 Of this, approximately 75 percent is due to "operational" discharges-that is, the
deballasting, tank- washing, and tank-washing premaintenance of oil tankers after their car- goes have been unloaded and they are headed
back for a new load? The
remaining 25 percent is due largely to oil spills, with offshore drilling contributing a
comparatively negligible amount.4 Since "operational" discharge takes place over long distances on
relatively widespread routes, the impact on the environment is not readily discernible because the oil is
dispersed and the threat to plant and animal life is fairly minimal. When ships collide or run aground and
spill large amounts of oil in a finite area tanker accidents create a real threat and damage to an ecosystem by oil
pollution.' Recent oil spills emphasize the seriousness of the threat of oil pollution to the oceans.
Spills declining - historical trends
Dagmar Schmidt Etkin phd and ecological research consultant, August 2009 (API, " Analysis of U.S. Oil
Spillage", http://www.api.org/environment-health-and-safety/clean-water/oil-spill-prevention-andresponse/~/media/93371edfb94c4b4d9c6bbc766f0c4a40.ashx)
In the last decade, on
average, 2.017 billion barrels of crude oil were produced domestically, and 4.082 billion
barrels of crude oil and petroleum products were imported annually. For each barrel of crude oil either domestically
produced or imported from foreign sources, 0.00003barrels spilled from all sources – of which 60.8%, or 0.00002 barrels,
spilled from petroleum industry sources. In the last decade, an average of 7.3 billion barrels1 of oil were “consumed” each year
in the U.S. Oil consumption can be viewed as a measure of the amount of oil that is transported, stored, and handled each year. In the last
decade, for
every barrel of oil “consumed” in the U.S., 0.000027 barrels2 spilled from all sources and 0.000016
barrels spilled from petroleum industry sources. In the Upstream sector, oil spillage from offshore platforms has
decreased by 30% from the previous decade and by 95% since the 1970s. Overall average annual oil
spillage from offshore exploration and production activities has decreased by 61% from the previous decade and 87%
from the 1970s. On the basis of unit production, oil spillage has decreased by 71% since the previous
decade and 87% from the 1970s. Had the rate of spillage from 1969-1970 continued, an additional 516,000
barrels of oil would have spilled. In the Marine sector, oil spillage from tankers has decreased by 91%, and from
tank barges by 76% since the previous decade. Spillage from tank vessels (tankers and tank barges combined) per unit
oil transported has decreased by 71% from the last decade.
AT: Environment DA – AT: Structural Damage
No Impact to cuttings
Oil and Gas, November 2009 ("Knowledge Center"
http://www.oilandgasuk.co.uk/knowledgecentre/cuttings.cfm)
Most findings
are in broad agreement suggesting that the major seabed effects associated with oiled cuttings discharges
were smothering and subsequent development of anaerobic conditions due to the microbial
degradation of the base oil within a close range of the installation. The impact is therefore expected to be
localised and to gradually reduce over time thanks to biodegradation processes occurring in and around cutting piles. The conclusion
of the Drill Cuttings Initiative suggests that cuttings piles on the UKCS do not pose an environmental threat which
requires immediate remedial action. A range of potential management options for cuttings piles, ranging from removal to leaving in place
were identified and that the best option would be decided on a case by case basis following detailed assessment at the
time of decommissioning of the installation. Currently, only water-based cuttings are discharged to sea. These materials are
relatively environmentally inert therefore the main mechanism for seabed effects would be via the physical
smothering of seabed organisms in areas of high deposition. The long term environmental toxicity and/or food chain effects
associated with these materials are deemed to be negligible.
No impact to fluid discharges - toxicity and concentrations too small - studies prove
Melton et al, 10-16-2000 (H. R. Melton, J. P. Smith, C. R. Martin, T. J. Nedwed, H.L. Mairs, D. L.
Raught, PHD, Chemical Engineering - ExxonMobil Upstream Research Company PHD, Physical Chemistry
- ExxonMobil Upstream Research Company BS, Chemical Engineering, Business Administration ExxonMobil Upstream Research Company PHD, Environmental Engineering - ExxonMobil Upstream
Research Company MS, Ocean Engineering - ExxonMobil Production Company BS, Civil and
Environmental Engineering - ExxonMobil Upstream Development Company, respectively; Rio Oil and Gas
Conference, OFFSHORE DISCHARGE OF DRILLING FLUIDS AND CUTTINGS -A SCIENTIFIC PERSPECTIVE ON
PUBLIC POLICY, http://www.anp.gov.br/meio/guias/5round/biblio/IBP44900.pdf)
Species for regulatory testing were chosen after assessing the sensitivity of a wide range of organisms. By 1983, the
toxicity of water-based drilling fluids to 62 different species of marine animals from the Atlantic and Pacific Oceans, the
Gulf of Mexico, and the Beaufort Sea (National Research Council (US), 1983) had been determined. USEPA chose one of the
more sensitive crustacean species, Mysidopis bahia, as the standard organism for drilling fluid bioassays as part of
its implementation of a toxicity limit on drilling fluid discharged to United States waters. US experience shows that discharged WBF will
be low in toxicity. Toxicity values are reported as the 96-hour LC50, the concentration causing mortality of 50% of the test
organisms during a 96-hour exposure, for the suspended particulate phase (SPP), a 1:9 mixture of drilling fluid and seawater.
USEPA data showed that 99.9% of 10,397 Gulf of Mexico drilling fluid LC50s were in excess of 30,000 ppm (Science
Applications International, Inc., 1992), the US regulatory limit on drilling fluid toxicity. This limit is met routinely in drilling
operations. Due to rapid dilution, an organism entrained in a drilling fluid plume would be exposed to
concentrations in excess of 30,000 ppm SPP (corresponding to approximately 0.3% whole drilling fluid) for only about 30
seconds. Thus, the 96-hour exposure used in the regulatory toxicity test is a very conservative exposure scenario. Industry has
developed NAF systems that are lower in toxicity and environmental persistence than the original diesel based
fluids while maintaining similar drilling performance. Toxicity testing shows that modern NAFs have low aquatic
toxicity (Vik, et al., 1996 and USEPA, 1999b) as might be expected from materials with low water solubility and low aromatic
content. NAF cuttings settle very rapidly out of the water column (Brandsma, 1996), further reducing possible
environmental exposures of organisms. The tendency of NAF cuttings to settle to the seabed has focused
attention on the toxicity of NAF to benthic (i.e., sediment-dwelling) species. Vik, et al., (1996) examined the aquatic and
benthic toxicity of a range of SBF and found that they would not be considered toxic according to Norwegian
government standards. Current efforts to determine the acceptability of discharge of NAF cuttings have
motivated the development of new testing protocols for sedimenttoxicity. The results of this work will provide a
more complete assessment of the sediment toxicity of the whole spectrum of NAF fluids.
No bioaccumulation - studies
Melton et al, 10-16-2000 (H. R. Melton, J. P. Smith, C. R. Martin, T. J. Nedwed, H.L. Mairs, D. L.
Raught, PHD, Chemical Engineering - ExxonMobil Upstream Research Company PHD, Physical Chemistry
- ExxonMobil Upstream Research Company BS, Chemical Engineering, Business Administration ExxonMobil Upstream Research Company PHD, Environmental Engineering - ExxonMobil Upstream
Research Company MS, Ocean Engineering - ExxonMobil Production Company BS, Civil and
Environmental Engineering - ExxonMobil Upstream Development Company, respectively; Rio Oil and Gas
Conference, OFFSHORE DISCHARGE OF DRILLING FLUIDS AND CUTTINGS -A SCIENTIFIC PERSPECTIVE ON
PUBLIC POLICY, http://www.anp.gov.br/meio/guias/5round/biblio/IBP44900.pdf)
Laboratory studies of bioaccumulation of drilling fluid
metals in marine organisms have found a small degree of
barium and chromium uptake and little or no accumulation of other metals (Neff et al., 1988a and 1988b). When
bioaccumulation has been observed, it has not been high enough to be harmful to the accumulating animals
or predators. Studies of the bioaccumulation of mercury, cadmium, copper, lead, and arsenic from pure and impure barite (Neff,
1988b) concluded that the metals associated with drilling fluid barite are virtually non-available for
bioaccumulation by marine organisms that might come in contact with discharged drilling fluid solids. Neff's
results with barite have been confirmed by laboratory measurements which show that benthic organisms (Bowmer
et al., 1996) and bottom-feeding fish (Stagg and McIntosh, 1996) do not bioaccumulate metals from actual NAF drill
cuttings. Laboratory studies have shown that heavy metals in drilling fluids do not biomagnify in marine food
webs (Neff et al., 1988a and 1988b). Similar results have been found in studies of biomagnification of heavy
metals from sources other than drilling fluids. With the exception of organomercury compounds, which are not found in
drilling waste discharges, concentrations of most metals in natural marine food webs show either no relation or
an inverse relation to trophic level, indicating that food chain biomagnification of inorganic metals does not
occur (Kay, 1984; Bascom, 1983; Amiard et al., 1980; Young and Mearns, 1979 and Schafer et al., 1982). Concerns over bioaccumulation of
hydrocarbons associated with drilling wastes have centered around PAHs. Fortunately, all vertebrates have enzyme systems
that enable the oxidation and expulsion of aromatics from the organism. For all species, the very low PAH
content of modern NAFs effectively mitigates this concern. Consequently, bioaccumulation of hydrocarbons
from NAF drilling fluid discharge is not expected to be a significant issue. An accepted measure of bioaccumulation
potential for organic compounds is the octanol-water partition coefficient (log Pow). Studies have shown that substances with log Pow greater
than 3 and a molecular weight less than 600 have a tendency to accumulate. However, most experts agree that a
substance with a log
Pow greater than 7 will not bioaccumulate in aquatic species through the gills because the molecules of
such substances will be too large to move past the aqueous diffusion layer which is present at the water/gill
interface (Rand, 1995). The limited bioaccumulation data available indicate that for most SBFs, log Pow coefficients are outside the range that
would suggest significant bioaccumulation potential (Vik et al, 1996). The available laboratory test data
indicates limited to no
uptake of synthetics, with rapid depuration.
No emissions impact - regulations check
Shreyas Erapalli and Laura Christensen, consultants, 11-10-2011 (Trinity Consultants, "Modeling
Emissions from Offshore Drilling",
http://www.trinityconsultants.com/Templates/TrinityConsultants/News/Article.aspx?id=3651)
Before submitting an EP or DOCD plan to BOEMRE for approval, the applicant must demonstrate that onshore
air quality impacts from proposed offshore activities, as compared to the National Ambient Air Quality Standards (NAAQS),
will not adversely affect human health or the environment. Emissions from offshore sources must be
quantified using EPA-approved methodologies. These sources include fuel burning sources, such as drilling rigs, generators,
flares, and supply vessels as well as sources of fugitive emissions. If these emissions exceed pollutant-specific thresholds,
then air dispersion modeling may be required.
AT: Environment DA – Seepage Alt-Cause
Natural Seepage is the largest internal link - disproves your impact
Dagmar Schmidt Etkin phd and ecological research consultant, August 2009 (API, " Analysis of U.S. Oil
Spillage", http://www.api.org/environment-health-and-safety/clean-water/oil-spill-prevention-andresponse/~/media/93371edfb94c4b4d9c6bbc766f0c4a40.ashx)
Natural discharges of petroleum from submarine seeps have been recorded throughout history going back to the
writings of Herodotus7 and Marco Polo.8 Archaeological studies have shown that products of oil seeps were used by
Native American groups living in California - including the Yokuts, Chumash, Achomawi, and Maidu tribes - well before the
arrival of European settlers.9 In recent times, the locations of natural seeps have been used for exploration purposes
to determine feasible locations for oil extraction. The magnitude of natural seeps is such that, according to
prominent geologists, Kvenvolden and Cooper (2003), “natural oil seeps may be the single most important source of oil that
enters the ocean, exceeding each of the various sources of crude oil that enters the ocean through its
exploitation by humankind.” Worldwide, natural seepage totals from about 4.2 million barrels to as much as 14
million barrels annually. In U.S. waters, natural seeps are also the largest source of oil inputs.
AT: Politics DA
Plan Popular – GOP
The Plan is popular with House Republicans- disproves that P.C is key
Guegel 6/26, Anthony Guegel, June 26 2014, Writer for Upstream, Reporter on Oil and Gas Exploration, Upstream-Newspaper on Oil
th
and Gas News, “House passes offshore drilling bill “http://www.upstreamonline.com/live/article1367478.ece // RD
The US House of Representatives voted 229-185 on Thursday in favour of a bill that would press the
Department of Interior and the Obama administration to open up more acreage for drilling offshore the
US west and east coasts and off Alaska. Most expect the legislation to die in the Senate, where it is headed next. The bill, HR 4899,
sponsored by Washington state representative and Republican Doc Hastings - who also chairs the House Natural Resources Committee -
seeks to push down gasoline prices by boosting domestic oil and gas production even further by granting
easier access to federal lands onshore and offshore. It also proposes to force Interior to makes leasing available off Virginia,
South Carolina, and California near Santa Barbara. Yearly lease sales would also be required in Alaska’s National Petroleum Reserve. In addition,
the bill would require the new five-year leasing plan to start in 2015. Interior is already beginning studies for the
currently scheduled five-year programme beginning in 2017. "The current turmoil in Iraq has already caused the price of
gasoline to increase, and it serves as an important reminder of why we need to increase production
here at home," Hastings said. "The best way to protect ourselves from price spikes caused by international
conflicts is to increase the production of American energy resources." However, the bill is not expected to get past
the Democratic-controlled Senate. Oregon representative Peter DeFazio, the ranking Democrat on the Natural Resources Committee, derided
the repeated attempts to pass a bill that most in Congress expect to fail in its current form. "We now have a new tradition here, which is
Groundhog Day in June for energy bills, in a faux sort of attempt to pretend we really care about the extortionate prices that people are paying
because of Big Oil in the United States and speculation on Wall Street," DeFazio said. Oil
and gas operators represented by
National Ocean Industries Association President Randall Luthi applauded the bill. "Opening up more of
our Outer Continental Shelf to energy exploration and development will create thousands of new
American jobs and billions of dollars in state and Federal revenues, all while decreasing our dependence
on foreign oil and increasing our domestic energy security," Luthi said. "The Senate should take up and pass
this important bill and give the president the opportunity to support a broad based 'all of the above'
energy policy that continues the trend away from reliance on foreign imports and towards more jobs,
energy and economic security."
AT: CP’s
AT: CP’s – Generic Drilling Key
The counterplan fails- Only Expanding leases for drilling in the OCS solves
OGJ 2013, Oil and Gas Journal, December 16 , Journal about oil and gas production in the United States, “API-NOIA study lists Atlantic
th
OCS development benefits “, http://www.ogj.com/articles/print/volume-111/issue-12b/regular-features/ogj-newsletter.html //RD
Opening the US Atlantic Outer Continental Shelf to oil and gas activity could create 280,000 jobs, generate
$195 billion in private investment, and increase US production by 1.3 million boe/d, a new study
concluded. The Quest Offshore Inc. analysis, which the American Petroleum Institute and National Ocean Industries
Association jointly commissioned, also found US Atlantic OCS exploration and production could contribute
up to $23.5 billion/year to the US economy, and generate $51 billion in revenue for federal and state
governments during 2017-35. If the first US Atlantic OCS lease sales were held in 2018, exploratory drilling could begin the following year
with the first production of oil and gas expected in 2026, the study said. "Major capital investments, job creation, and revenue to government
would all begin years before the first barrel goes to market," it added. "The
key is getting Atlantic lease sales included in the
federal government's 2017-22 5-year program, which the administration will soon begin to prepare," NOIA Pres. Randall B.
Luthi told reporters during a Dec. 5 teleconference. "Completing a seismic study of the region also is essential."
Economic benefits of opening the US Atlantic OCS to oil and gas activity would be felt national, according to
Erik Milito, API's upstream and industry operations director, who also participated. "None of these economic benefits will
occur unless the federal government adopts a different strategy," Milito said, adding, "The only question is whether it
will open the door to more jobs, more economic growth, and more domestic energy production from the Atlantic OCS."
AT: Shale CP – Warming Turn
Shale gas accelerates warming faster than any form of energy, including coal
Black 11(Richard Black, environment correspondent for BBC news, “Shale gas 'worse than coal' for climate”, BBC, April 12, 2011,
http://www.bbc.co.uk/news/science-environment-13053040)
The new kid on the energy block, shale
gas, may be worse in climate change terms than coal, a study concludes. Drawn
from rock through a controversial "fracking" process, some hail the gas as a "stepping stone" to a lowcarbon future and a route to energy security. But US researchers found that shale gas wells leak
substantial amounts of methane, a potent greenhouse gas. This makes its climate impact worse than
conventional gas, they say - and probably worse than coal as well. "Compared to coal, the footprint of shale
gas is at least 20% greater and perhaps more than twice as great on the 20-year horizon, and is
comparable over 100 years," they write in a paper to be published shortly in the journal Climatic Change. "We have produced
the first comprehensive analysis of the greenhouse gas footprint of shale gas," said lead author Robert Howarth
from Cornell University in Ithaca, US. "We have used the best available data [and] the conclusion is that shale gas
may indeed be quite damaging to global warming, quite likely as bad or worse than coal," he told BBC News.
Short-term fix? Greenhouse gas emissions from shale gas are predominantly down to two things: carbon dioxide produced when the gas is
burned, and methane that leaks out while the well is being exploited. Figures
from the US government and industry
indicate that at least a third more methane leaks from shale gas extraction than from conventional wells
- and perhaps more than twice as much. Extracting the gas involves a complex sequence of processes including drilling down and
then sideways along a shale bed, cracking the rock with hydraulic pressure or explosions (fracking), placing plugs in the shaft and then "drilling
out" these plugs. Coal,
by contrast, is associated with a much smaller methane release during mining; but
burning it produces about twice as much CO2 as burning natural gas. Molecule for molecule, methane is
a much more potent greenhouse gas than CO2; but it lasts for a much shorter time in the atmosphere. Figures from this
research team indicate that over a 20-year period, the net warming impact of using shale gas is worse
than coal - and, perhaps more surprisingly, that conventional gas may be worse than coal as well. Over a
100-year timeframe, conventional gas is almost certainly better than coal - but shale gas could be worse.
New Regulations and Redundant Systems prevent any environmental damage
API 2014, American Petroleum Institute, January, “Offshore Access to Oil and Natural Gas Resources”, http://www.api.org/policy-andissues/policy-items/exploration/~/media/Files/Oil-and-Natural-Gas/Offshore/OffshoreAccess-Primer-lores.pdf //RD
Delivering offshore energy to the American people is safer than ever as a result of industry’s leadership and
continuous investments in safety, as evident in API’s robust slate of offshore standards, the Center for
Offshore Safety, the Marine Well Containment Company and Helix Well Containment Group, and an
enhanced regulatory regime. Extensive resources have been devoted to safety, drawing on the best
minds from the industry and government to build a multi-layer system, with many built-in redundancies
to help prevent incidents, to intervene and stop a release that might occur, and to manage and clean up
spills. There are 3 critical aspects to this network of safety for offshore operations: 1) Prevention, embodied in the
Center for Offshore Safety, through industry drilling standards and the promotion of robust safety and
environmental management systems 2) New, innovative well containment and intervention capabilities
3) Improved planning and resources for oil spill response Through API, the oil and natural gas industry is
focused on prevention-oriented reforms, including requirements for maintaining multiple barriers
during well construction and implementation of various new testing requirements during drilling
operations. The industry has also improved standards for zone isolation in wells and preventing and
controlling flows in cementing operations as well as deepwater well design and installation practices.