VAULT
THE PETROLEUM BOMB
Two longtime national security thinkers argued that reducing the United States’s oil consumption would lessen its strategic vulnerability in an article first published in October 2005.
By George P. Shultz and R. James Woolsey
Dependence on petroleum and its products for the lion’s share of the world’s transportation fuel creates special dangers in our time. These dangers are all driven by rigidities and potential vulnerabilities that have become serious problems because of the geopolitical realities of the early 21st century. Those who reason about these issues solely on the basis of abstract economic models that are designed to ignore such geopolitical realities will find much to disagree with in what follows. Although such models have utility in assessing the importance of more or less purely economic factors in the long run, as Lord Keynes famously remarked, “In the long run, we are all dead.”
The current transportation infrastructure is committed to oil and oil-compatible products. There is a range of fuels that can be used to produce electricity and heat and that can be used for other industrial uses, but petroleum and its products dominate the fuel market for vehicular transportation. Neither the use of natural gas in buses and other fleet vehicles nor the addition of corn-derived ethanol to gasoline in some states has appreciably affected petroleum's dominance of the transportation fuel market.
That dependence leaves us vulnerable.
Plug-In Advantage
Government policies in the United States and other oil-importing countries should encourage a shift to substantially more fuel-efficient vehicles, including fostering battery development for plug-in hybrid vehicles; and encourage biofuels and other alternative fuels that wherever possible can be derived from waste products.
Three currently available technologies stand out to improve vehicle mileage: diesel engines, hybrid gasoline electric drivetrains, and lightweight carbon composite construction. A modification to hybrids now on the market could permit them to become “plug-in hybrids,” drawing power from the electricity grid at night and using electricity for short trips.
According to Peter Huber and Mark Mills in their recent book, The Bottomless Well, the “vast majority of the most fuel-hungry trips are under six miles,” which can be handled by current nickel-metal hydride battery capacity. Other experts, however, emphasize that any battery used in a plug-in hybrid must be capable of taking daily charging without being damaged and be capable of powering the vehicle at an adequate speed. By most assessments, some battery development will be necessary.
Such development should have the highest research and development priority because it promises to revolutionize transportation economics and to have a dramatic effect on the problems caused by oil dependence.
Pipelines remain the arteries of the global energy system—highlighting both infrastructure scale and geopolitical risk. Photo: Photosphere Images (2005)
With a plug-in hybrid vehicle one has the advantage of an electric car, but not the disadvantage. Electric cars cannot be recharged if their batteries run down at some spot away from electric power. But since hybrids have tanks containing liquid fuel (gasoline, ethanol, diesel, or renewable diesel), plug-in hybrids have no such disadvantage. Moreover, the attractiveness to the consumer of being able to use electricity from overnight charging for a substantial share of the day’s driving is stunning. The average residential price of electricity in the United States is about 8.5 cents per kilowatt-hour. Taking into account the different tank-to-wheel efficiency of liquid-fueled and electric propulsion, 8.5 cents per kWh electricity is roughly equivalent to gasoline at $1 per gallon. Moreover, many utilities sell off-peak power for 2 to 4 cents per kWh—the equivalent of gasoline costing 25 to 50 cents per gallon.
Although the use of off-peak power for plug-in hybrids should not initially require substantial new investments in electricity generation, greater reliance on electricity for transportation should lead us to look particularly to the security of the electricity grid and the fuel used to generate that power. A 2002 report of the National Academies of Science, Engineering, and Medicine (“Making the Nation Safer”) emphasized particularly the need to improve the security of transformers and of the supervisory control and data acquisition, or SCADA, systems in the face of terrorist threats. The Nation al Commission on Energy Policy has seconded those concerns. With or without the advent of plug-in hybrids, these electricity grid vulnerabilities require urgent attention.
If even one of these new transportation technologies is moved promptly into the market, the reduction in oil dependence could be substantial. If several begin to be successfully introduced into large-scale use, the reduction could be stunning. For example, if a 50 miles-per-gallon hybrid gasoline-electric vehicle on the road today were constructed from carbon composites, its fuel efficiency would be doubled. If it were to operate on 85 percent cellulosic ethanol or a similar proportion of biodiesel or renewable diesel, it would be achieving hundreds of miles per gallon of petroleum-derived fuel. If it were a plug-in version operating on upgraded lithium batteries so that 20- or 30-mile trips could be undertaken on its overnight charge before it began using liquid fuel at all, one gallon of fossil petroleum could suffice for around 1,000 miles of travel.
A range of important objectives-economic, geopolitical, environmental-would be served by our embarking on such a path. Of greatest importance, we would be substantially more secure.
George P. Shultz served as Secretary of the Treasury during the Nixon Administration and Secretary of State during the Reagan Administration. R. James Woolsey was director of the Central Intelligence Agency during the Clinton Administration and was later a senior vice president at Booz Allen Hamilton for Global Strategic Security. The article was adapted from a position paper the authors wrote in their capacity as co-chairmen of the Committee on the Present Danger.
Petroleum dependency made the U.S. economy vulnerable to shocks in supply and price during the early 2000s. Photo: Getty Images
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