In his 2007 State of the Union address, President George W. Bush stated that U.S. reliance on foreign oil has rendered the nation’s interests “vulnerable to hostile regimes, and to terrorists who could cause huge disruptions of oil shipments, and raise the price of oil, and do great harm to our economy.” Concerns about the geopolitical and national security consequences of U.S. dependence on foreign sources of oil have triggered arguments for adopting policies to reduce oil imports. Many members of Congress have advocated “energy independence” for the United States so as to reduce potential threats from imported oil to...

We examine three channels through which changes in the supply of imported oil might affect U.S. national security:

the potential for an abrupt fall in supply and the concomitant surge in the world market price of oil to disrupt U.S. economic activity to the point of precipitating an economic recession

damage to critical nodes in the U.S. supply chain for refined oil products that could induce short-run local shortages or, if extensive enough, national shortfalls in refined oil products, resulting in a reduction in U.S. economic output

large increases in payments by U.S. consumers of oil due to shifts in...

Because of the importance of refined oil products for transportation, politically motivated cutoffs in supplies of oil are a potential national security concern for oil-importing states. In a number of instances, leaders of oil-exporting countries have attempted to exploit this perceived vulnerability, threatening and, in some cases, imposing embargoes on the export of oil. U.S. policymakers have expressed concern about the ability of exporters to buy support for their foreign policies by providing importing countries with free or subsidized fuels. They have also expressed concern that the United States may be prevented from purchasing oil because other consuming nations have...

Many U.S. citizens and policymakers are concerned that proceeds from payments for imported oil are being used to finance activities contrary to U.S. interests. Governments of some countries openly hostile to the United States—Iran and Venezuela, in particular—rely on oil exports for most of their budget revenues. To the extent that global consumption of oil contributes to increasing the revenues of these governments, directly or through the effects of U.S. consumption on global demand for oil, global importers’ payments for imported oil may help finance governments intent on thwarting U.S. policies.

Oil exports are not a necessary condition...

This chapter analyzes the thesis that the heavy dependence of the United States on imported oil requires substantial additional military forces to maintain the security of international oil flows for the global market. The cost of those forces, in turn, generates a burden on the U.S. taxpayer.¹

The relationship between ensuring the security of the production and transit of international oil supplies and the costs to the U.S. government is more complex than the straightforward linkage implied in this thesis. Most importantly, military forces are, to a great extent, multipurpose and fungible. Forces designed primarily for use in one theater...

In the previous chapters, we have critically evaluated links between imported oil and U.S. national security that are commonly suggested by political leaders and commentators. We identified some links between imported oil and U.S. national security but also found that some suggested links are weak or nonexistent. Table 6.1 summarizes our major findings.

In light of these findings, the United States would benefit from policies that diminish the sensitivity of the U.S. economy to an abrupt decline in the supply of oil. The United States would also benefit from policies that would push down the world market price of oil:...