Fighting Tomorrow's Battles Today with Climate Policy

"America's current energy posture constitutes a serious and urgent threat to national security"

— Retired Vice Admiral Dennis McGinn, member of the Military Advisory Board

Our dependence on foreign oil poses a threat to our national security that will only intensify as China and India's thirst for oil doubles over the next two decades. A rise in demand that is particularly unnerving when you consider that two-thirds of existing fields are forecast to be no longer producing oil by this time (see graph below):

This combination of rising demand and the need to replace a significant amount of existing oil fields with new finds is expected to accelerate the resource grab we are starting to see take shape around the world. A battle that will inevitably be won by neither the US nor China but by the OPEC nations as they increase output by 11 mpbd and raise their oil-export revenues by a factor of five to $28trln over the next two decades (see graph below):

What is more, these energy and economic risks to our national security do not even take into account the threat posed by increasing global output of CO2 by 40% over the next two decades under business as usual forecasts.  Threats that the Military Advisory Board expects to directly impact the effectiveness of our military as 1) weather-related events increase, 2) the scope of naval operations expands due to the opening of the Arctic, 3) US naval bases are potentially abandoned due to rising seas levels, 4) US forces are asked to engage in more humanitarian relief efforts, and 5) a rising number of "failed" states around the world heighten regional tensions.  

Reducing our dependence on foreign oil

The best way to address these "serious and urgent threats" to our national energy security is through the passage of energy and climate legislation like the House-passed bill which is expected to dramatically reduce our greenhouse gas emissions and our dependence on foreign oil over the next several decades.

According to a recent studyconducted by NRDC, the House-passed Waxman-Markey climate bill is expected to cut our dependence on foreign oil by 30% by the year 2030 (see graph below):

This is expected to be accomplished through subsidies in the bill to help deploy two important low carbon technologies to scale in the US. The first is the potential to use CO2 captured at coal-fired power plants to recover an additional 20% of the "stranded" oil remaining in existing domestic fields using a common oil recovery technique known as CO2-enhanced oil recovery (CO2-EOR).

Working with Advanced Resources International, a specialist in enhanced oil recovery (CO2-EOR), NRDC forecasts that there would be enough additional carbon dioxide available from power plants alone under the Waxman-Markey climate bill to help recover 37 barrels of this stranded oil from existing oil fields. Enough of an increase in domestic oil output to lower imports as a percentage of total demand to roughly 25% by 2050 (see graph below):

The second way the Waxman-Markey bill is expected to lower our demand for foreign oil is through the accelerated production of cleaner carsin the United States. The Waxman-Markey bill contains over $20bln in re-tooling incentives and $25bln in loan guarantees that can be used to help accelerate clean car deployment and reduce the number of times we need to stop for gas. Under the EIA's Accelerated CAFE modeling of the bill, cleaner cars are forecast to lower oil demand by 0.6 mbpd by the year 2030. A savings that is even expected to drive our gas bills below what they would be without a climate policy (see graph below):

In total, these two programs alone can be expected to lower US demand for imported oil by over 13 bln barrels over the next two decades and put us on a path to 1) cut our demand for foreign oil by 55%, 2) create tens of thousands of new jobs, 3) generate $800bln in oil royalties for states and the federal government, and 4) put the US automotive industry back on track by building the cleaner cars Americans want to drive.

Taking our National Security concerns global

The passage of a climate bill in the US is also expected to set the stage for the passage of a global agreement on climate. As part of the World Energy Outlook, the IEA estimates that establishing a global carbon target of 450 ppm could accelerate the deployment of cleaner cars by enough to reduce global oil demand by 16 mbpd by the year 2030. A decline in global consumption this large would lower oil prices by 22%, cut CO2 emissions by over a billion tons, and reduce petrol dollar flows into OPEC's coffers by around $4trln.

In sum, the global thirst for oil is expected to dramatically increase pressure on global resources over the next several decades. This is bad news for the US energy, economic, and military security and is best addressed through the passage of climate legislation. Climate legislation like the House-passed bill which will lower our dependence on foreign oil and help us address tomorrow's national security threats today.