Geopolitical risks to US oil supply shrink
January 10, 2018
geopolitical risks to the United States' oil supply are the lowest since
the early 1970s, due to fracking, climate action and a more diverse
global supply, according to a new paper by experts at Rice University's
Baker Institute for Public Policy. America's energy prosperity contrasts
with a more fraught period for energy-exporting countries where
geopolitical challenges have been compounded by fiscal stress and rising
domestic energy demand, the authors said.
"Geopolitical Dimensions of U.S. Oil Security," co-authored by Jim Krane,
the Wallace S. Wilson Fellow for Energy Studies at the Baker Institute,
and Kenneth Medlock, senior director of the institute's Center for
Energy Studies, was published online this month in the journal Energy
The authors argue that while U.S. security guarantees for America's
Persian Gulf allies remain important, enhanced U.S. oil security and
other factors could allow a downsizing of military commitment. At the
same time, the oil-exporting world is turning toward the developing
world to find markets for its crude. Someday, conceivably, these
countries may participate in ensuring the security of global oil supply,
the authors said.
Climate policies also, ironically, enhance oil security due to the
greater fuel efficiency and push toward alternative technologies and
fuels. "Hence, the more Americans adopt alternate vehicle technologies
and fuels, the more they insulate themselves from oil disruptions," the
Despite these factors, oil stands to remain the world's primary
transportation fuel for decades, ensuring its strategic value and U.S.
interest in protecting the trade.
"The security of America's oil supply and stability in global oil trade
remain critical components of U.S. national security," the authors
wrote. "While the potential exists for rapid shifts in energy systems at
the regional level, energy transitions tend to occur slowly on a global
scale. Geopolitical forces, by contrast, are far more volatile.
"As the Iranian revolution and the fall of the Soviet Union demonstrate,
sweeping change can upend longstanding relationships overnight," they
wrote. "Ongoing trends in global oil markets appear to be pointing to
continued improvement in the security of U.S. oil supply. U.S. domestic
production is increasing, as is the geographic diversity of global oil
supply, and environmental pressures are encouraging greater efficiency
and adoption of substitute technologies. All of these factors contribute
to U.S. oil security."
However, trends in oil geopolitics point in the opposite direction, the
authors said. "The Trump administration's transactional approach to
international relations has intensified the uncertainty of an already
volatile period among oil exporting states," the authors wrote.
the onset of the Arab Spring uprisings in 2010, instability has been
exacerbated by fiscal stresses of low oil prices, the rise in tension
between Sunni and Shia Muslim-dominated regions and the attendant proxy
wars in Syria, Iraq, Yemen and Libya, crumbling stability in Venezuela
and a breakdown in relations among Gulf oil sheikhdoms. Most recently,
the Trump administration has aggravated regional geopolitical tensions
by taking sides in the intra-Gulf dispute. It has also created broad
rifts with long-standing allies over its announced intention to withdraw
from the 2015 Paris climate agreement," the authors said.
Improvements to U.S. energy security despite rising tensions in
oil-producing regions have prompted questions about whether the United
States needs to continue enforcing the provisions of the Carter Doctrine
that require Washington to maintain a large and costly military presence
in the Persian Gulf. "Despite a strong prima facie case for drawdown, we
argue that a continued U.S. presence remains compelling," the authors
Looking to the future, U.S. oil security depends on development choices
made in China, India and other Asian states where once impoverished
masses are rising into the middle class, the authors said. "The oil
intensity of China and India, as well as populous ASEAN states like
Indonesia, will weigh greatly on future oil security in the United
States," the authors wrote.