TOPLINE MESSAGES:
- America’s current energy posture – especially our over-dependence on foreign oil – is causing problems for our economy and for national security.
- It’s time to adopt a “Made in America” approach to energy that will boost energy independence and help revive our economy.
- America’s energy resources are vast and varied, and the global market for energy alternatives is huge and growing by leaps and bounds.
- Energy reform means taking a clear-eyed look at our nation’s energy needs and sources, and considering what policies best suit our nation’s interests in the 21stcentury.
THE PROBLEM: AMERICA’S CURRENT ENERGY CHOICES WEAKEN OUR NATION’S ECONOMY AND NAITONAL SECURITY
- As President George W. Bush put it, “America is addicted to oil, which is often imported from unstable parts of the world.”
- Our current energy posture carries high costs and risks for our economy, our military, and our national security.
- It limits our nation’s ability to act in the best interests of its people.
America’s over-dependence on foreign sources of energy threatens America’s struggling economy.
- The United States’ over-dependence on foreign oil holds our economy hostage to the worldwide oil market, whose prices we cannot control.
- Oil price spikes have preceded four of the last five recessions.
- Every day, the United States sends roughly a billion dollars to other countries to buy oil. Some of this money goes to countries that do not share our values, and even to regimes that support terrorism.
- Each $1 billion of trade deficit is estimated to cost America 27,000 jobs according to the Department of Energy. Oil imports account for almost one-third of the total U.S. trade deficit. That means the 2011, trade deficit of $558 billion due to oil imports cost America approximately 5 million jobs.
- A recent report by CNA’s Military Advisory Board called our overreliance on oil a “national vulnerability,” noting that “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.
- A National Academy of Sciences study found that burning fossil fuels costs Americans about $120 billion each year in health costs, and causes thousands of premature deaths from air pollution annually.
America’s over-dependence on oil threatens our national security and our standing in the world by limiting America’s ability to act on the world stage—militarily, diplomatically, and economically.
- US over-dependence on oil:
- Constrains our foreign policy options
- Entangles us with foreign governments that do not always share our values
- Diverts dollars to autocratic regimes
- Puts the U.S. in the position of sometimes funding both sides of the war against terrorism
Over-dependence on fossil fuels even threatens our men and women in uniform, while diverting money and effort away from the military’s core mission of keeping our nation safe.
- Military budgets are especially vulnerable to oil price swings. Every $10 increase in the price of a barrel of oil costs the DOD (and taxpayers) approximately $1.3 billion.
- The military is America’s largest energy consumer. In 2010, DOD consumed nearly 5 billion gallons of petroleum in military operations, costing $13.2 billion.
- Securing America’s access to Middle East oil is costly. The cost of deploying U.S. forces in the Persian Gulf, patrolling its water and supplying military assistance to Mid-East countries is estimated at $50 billion per year.
- Our oil addiction makes it more likely that our troops will be sent into harm’s way, in order to safeguard the free flow of oil.
- Over-reliance on oil on the battlefield is a risk to our military’s combat effectiveness. Military leaders tell us that significant resources and troops are diverted from the combat mission to protect fuel convoys. This puts our troops in even greater danger on the battlefield. Specifically:
- A Marine Corps evaluation found 10% of its casualties occurring during fuel or water convoys.
- An Army study in Afghanistan found one soldier killed or wounded for every 24 fuel convoys.
- From 2003 – 2007, more than 3,000 army personnel and contractors were wounded or from attacks on fuel and water resupply convoys in Iraq and Afghanistan.
THE SOLUTION:
America has enough energy resources to significantly reduce our reliance on other countries to meet our energy needs. Moving toward energy independence will keep more of the money we spend on energy here at home, creating more domestic jobs and giving a much-needed boost to our economy.
- Hydraulic fracturing (also known as “fracking”) has helped make natural gas supplies more accessible and will create new jobs in the fossil fuel industry
- Exploring and extracting oil off our shores will also help reduce dependence on foreign oil and create new jobs
- U.S. installed wind capacity grew 15% in 2010 and the U.S. wind industry has added over 35% of all new generating capacity over the past 5 years. The average wind farm is expected to be fully competitive with conventional sources of electricity by 2016.
- U.S. solar energy installations grew 109% in 2011 and there were over 100,000 solar workers in the U.S. as of August 2011, more than double estimated solar employment in 2009.
- Biofuels and bioenergy—using agricultural products and waste as feedstock— show great promise in reviving rural areas that are struggling economically.
Real, long-term energy security requires reducing our dependence on oil and other fossil fuels by using energy more efficiently and developing homegrown, renewable energy resources that can never run out.
- America uses 25% of the world’s oil, but controls less than 3% of known reserves. We cannot simply drill our way out of our energy problem—we cannot produce enough at home to satisfy our nation’s energy needs.
- Homegrown renewable energy — such as wind and solar power and biofuels– never run out. And, they create jobs here in the U.S. that cannot be shipped overseas. This is a valuable addition to our energy portfolio.
- America’s clean energy sector grew by 8.3% between 2003 and 2010—that’s nearly twice as fast as the overall economy.
- Global investment in clean energy reached a new record of $260bn in 2011, a 5% increase from 2010.
- Energy efficiency leaves more money in the pockets of American families to save, invest, and spend on American goods and services.
- Energy sources such as wind and solar power do not contribute to air pollution, and do not pose health threats to American families.
OBSTACLES TO CHANGE:
Right now, subsidies and tax breaks favor old, dirty, entrenched energy sources over emerging clean, high-tech energy sources of the future. We need to level the playing field.
- DBL Investors found that annual US government support for the oil industry is five times greater than US government support for renewable power. This is despite the fact that oil is a mature industry, and that the largest oil companies racked up a record $137 billion in profits in 2011.
- Taxpayers pony up about $8 billion a year in oil subsidies and $3.3 billion on nuclear power subsidies. In comparison, they spend $400 million on incentives for all renewable power sources combined.
- The U.S. government has always played a powerful role in supporting new industries, and should consider doing so now.
- An example: the US government was the only buyer of computer chips for about a decade, while. NASA was for a time the only buyer of large computers, and the Pentagon gave the Internet its start. These early government allowed Microsoft, Apple, and other computer age giants to take root here in the United States, and grow into world-beating companies.
Energy efficiency has huge potential, and must be taken seriously.
- Power companies should get credit for helping customers save energy and money, and not be limited to getting paid for the amount of energy they sell.
- Saving energy means having to build fewer power plants, which saves ratepayers money and cuts down on air pollution and water use.
The true and complete costs of various sources of energy should be considered.
- For example, a National Academy of Sciences study found that burning fossil fuels costs Americans about $120 billion each year in health costs.
- Also: the cost of deploying U.S. forces in the Persian Gulf, patrolling its water and supplying military assistance to Mid-East countries is estimated at $50 billion per year.
THE FUTURE’S GREAT ENERGY PROMISE
The energy revolution is here, and America must lead it.
- Right now, countries are racing to win the global race for clean energy. Last year, investment in renewable energy alone topped a record $260 billion.
- The U.S. cannot afford to lose our competitive edge in this huge and fast-growing worldwide market. This is about developing and owning the technologies that are going to power the future.
- If we don’t dig in, innovate, and grow our clean energy sector, the U.S. will move from dependent on other countries for oil, to importing windmills, solar panels, and efficiency technology from nations like China, which is investing about a billion dollars a week in renewable energy.
- It’s important that America leads in the global race for clean renewable energy, in the same way we lead the computer revolution.
THE BOTTOM LINE:
Real energy reform – weaning our nation from foreign oil, boosting efficiency, and developing homegrown alternatives from natural gas to biofuels to wind and solar – means a more prosperous, safe, secure, and healthy America, and a better future for our nation’s families.