Supply | Demand
Energy Security.
Oil is a critical input for the success of society, perhaps second only to food and water. It is critical to US Economic security, and therefore to US National Security. The 1970s demonstrated that an oil supply shock originating from the Middle East can have a severe and damaging impact on the US economy. It resulted in inflation, high unemployment, and reduced economic output.
Today, with demand for oil growing rapidly from developing countries around the world, including China and India, and supply growth limited because it is a finite resource, prices are rising rapidly. EIA Projects that the US is scheduled to be increasingly dependent on the middle east for energy supplies over the next 25 years because that is where the vast store of reserves is located.
Prices at the pump do not accurately reflect the cost. High levels of government expenditure have been dedicated to armed conflicts abroad in order to achieve regional stability (and stable supplies). Naval presence in the international waterways ensures safe and secure route for oil tankers. Environmental costs from burning oil are substantial.
Prices are rising. Supply is finite. The US does not control the resource. We need it for survival. We need it for growth. Or do we?
