Findings

1. America’s dependence on oil constitutes a significant national security threat.

Our overreliance on oil is a national vulnerability. If even a small percentage of the daily supply of oil is interrupted, our nation’s economic engine, which is heavily reliant on transportation, could be significantly impacted. Despite our strategic oil reserve, the consequences for a sustained oil disruption—oil shock—would impact every aspect of our lives, from food distribution and what (or if) we eat, to manufacturing goods and services and associated jobs, to how we move from place to place in the conduct of our everyday lives. We have seen the consequences of oil shock before. We know the consequences are significant, we know they are immediate, and we know they are far reaching. We have seen how oil can be used as a weapon to attack our national security. We know this; our policy makers know this; our enemies know this.

In the United States, our transportation systems rely almost exclusively on gasoline, diesel, and jet aviation fuel. These three products are refined from a single basic ingredient: oil. How we get to work, how we ship materials, how we farm or produce our food, and how we transport raw products to manufacturers or finished products to or from markets depends, in nearly all cases, on this single source of materials: oil.

Our dependence on oil reduces our foreign policy options—no small concern as Middle East uprisings continue and dangerous regimes work to develop nuclear weapons. It leads us down foreign policy paths that ultimately put our troops in harm’s way. Oil dependence drags our economy downward, thwarts investment, and imperils our historic role as technology leaders—potentially depriving our troops of key military advantages. The cost of oil and the volatility of the price of oil hurt our military investments and limit both our military capability and capacity. Finally, our dependence on oil has far-reaching impacts on the environment.

Our overreliance on oil is made worse by our lack of control over global supplies, which is why, in this report, we focus on oil generally and not on foreign oil specifically. Oil is a global commodity, and any amounts of oil produced in North America become part of the global supply. When global prices spike upward, the domestic price also spikes—we don’t get “big-box store” discounts just because of our nationality. We too often watch idly how these price swings have been, and continue to be, manipulated by parties beyond U.S. control or influence.

To be clear, we see the value of increased domestic oil production as one of several viable options for reducing our overdependence on foreign oil. A near-term increase in domestic production has the potential to decrease reliance on outside sources, to increase the margin between global demand and global supply, and to increase our diplomatic leverage options. However, we also recognize that domestic oil alone will not satisfy our nation’s transportation energy demand. We must have alternatives to oil for our transportation sector. We can increase domestic production, and simultaneously reduce our overall demand for oil. The two need not present a conflict. Together, these steps would significantly strengthen our economic and diplomatic hands.

2. A 30 percent reduction in our use of petroleum would significantly improve our national security.

We chose our reduction target based on a specific military challenge. CNA analysis shows that if America used 30 percent less oil, our economy would have enough resilience to sustain the effects of a complete shutdown of the Strait of Hormuz (the narrow passage for international shipping between the Sultanate of Oman and Iran), or any other major shipping choke point, with little effect. That image is a satisfying one (particularly to those of us who have spent much of our careers focused on Persian Gulf
threats), and offers as good a definition as any of oil independence and increased security. If we achieve this 30 percent reduction, any enemy or rogue nation could close a key choke point or otherwise significantly disrupt the global flow of oil, and there would be little, if any, first order economic impact to the United States.

A 30 percent reduction would expand our foreign policy options, because our thirst for oil would no longer tether us as tightly to certain unreliable partners. It would help our military engagements, improve our flexibility, and increase our leverage among our allies.

A 30 percent reduction would also bolster our economy, decrease our trade deficit, and preserve capital for job creation at home. It would enhance our capacity to innovate, in large part because alternative energy investments would no longer be torpedoed by swings in oil prices caused by market forces or deliberately imposed by foreign cartels. Our economy would gain resilience.

The connection is direct: America becomes more secure if Americans use less oil. Economic security is essential to national security.

3. We can achieve a significant portion of a 30 percent reduction through greater efficiency in how we use oil.

The federal government’s fuel economy standards have proven to be effective at increasing efficiency and reducing the use of oil. (This is also true of numerous state standards, including California’s tailpipe emission standards.) These standards should be supported and strengthened as a means of making our nation more secure. State and federal governments must also explore additional market incentives and research programs to help achieve increased fuel economy, again as a means of reducing oil dependency. Our current approach to energy and transportation, which relies on market forces, is making us less secure.

Some degree of efficiency and fuel savings can be gained without any new technology or government
programs. Our collective security can be strengthened by individual actions. We can carpool, cmbine
trips, take public transportation, reconsider whether some trips are necessary, examine how and where we work—each of these steps offers a chance to cut our oil use. These adjustments may seem, to many, like substantial lifestyle changes or difficult economic choices—we see them as steps that make America more secure.

The benefits of efficiency are so obvious and sizeable that it is amazing to consider how or why our country has failed to insist on (or at least incentivize) it up to now. Rather than focus on past failures, however, we see this as a current and crucial opportunity. We can make dramatic reductions in our use of oil—and shame on us if we don’t.

While our study focuses on alternative fuels, we repeatedly found the best and most strategically promising alternative to be efficiency.

4. There are many promising alternatives to oil as a transport fuel—some available today, others on the horizon. If managed properly, all of the most promising alternative fuels examined can lower overall national security risks rather than continuing our overreliance on oil as a singular fuel source. The long list of viable alternatives to oil is good news. We have options. Good ones.

While the options are many, no single option is poised to occupy the singular place that petroleum now holds in American society. This, too, should be viewed with optimism, because it allows us to accept a future characterized by diverse supplies. Our current overreliance on a single fuel is a weakness; relying on diverse fuels and vehicle types can be a strength. Seeking a silver bullet would be a major mistake—we should pursue diversity. Achieving a diverse, effective, and plentiful supply of energy sources other than oil won’t be easy. Americans have optimized oil production and distribution, and have mastered refining techniques to maximize energy density and safety characteristics. Still, it is time to get on with the change. If pursued haphazardly, some of the options for replacing oil could have adverse national security implications. Some of the potential negative impacts that merit attention are: increased reliance on raw materials not produced domestically, excessive water use, altered strategic partnerships, and environmental risks.

National security involves a complex, interrelated range of factors, including economic, geopolitical, military, and environmental factors, and not all alternatives to oil are created equal when it comes to national security impacts. As we move to reduce our dependence on oil, we must assess the costs and benefits of alternatives in relation to these factors. While one fuel may reduce our economic security risks, it may also result in new geopolitical challenges. While another may have economic consequences, it could significantly reduce environmental effects. Others may have plentiful feedstock, but the process to produce the fuel may have grave, long-term environmental impacts. Short-term gains must be weighed carefully against long-term risks. Simplistic approaches or broad assumptions about the value of a particular fuel will not work. Navigating through the security challenges of alternative fuels will require a combination of market drivers and forward-looking government policy. These issues demand leadership at the national level, foresight, and careful planning to evaluate the competing implications and to mitigate untoward challenges. Obstacles aside, the time for our nation to act is now.