Energy Future Coalition (EFC)

Since the OPEC embargo of 1973, the problem of oil dependence has been the nation's most important political, economic, and energy challenge. The Department of Energy was created in large part to respond to that challenge, but to little effect. Each of the last eight U.S. presidents has pledged to steer the nation toward greater energy security, but the problem has only grown worse. The U.S. currently imports more than 50 percent of the oil it consumes, and countries like Saudi Arabia, Venezuela, and Nigeria are prominent among our suppliers. Of the one trillion barrels of world reserves, only three percent are to be found in the United States, and fully two-thirds are in the Persian Gulf. Thus, increased drilling in the U.S. would make almost no discernible difference in our oil imports.

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The intensity of oil use in the U.S. transportation sector makes the American economy vulnerable to the actions of countries in this volatile region. A study by Oak Ridge National Laboratory estimates a $7 trillion cost to the U.S. economy from the oil market upheavals of the last 30 years. Indeed, nearly every economic recession in the past 40 years has been preceded by a significant increase in oil prices.

Diversification of U.S. oil supply is not an adequate answer. Oil is like any other commodity - the last unit sold determines its price. The United States could shift all its purchases to relatively safe political sources, such as Canada and Mexico, and it would not be protected from price volatility. The global price is what matters most. A major disruption of production of oil in Saudi Arabia, for example, would cause the price of oil to spike everywhere in the world, dramatically impacting the U.S. economy.

But there are solutions. Technologies that improve vehicle efficiency can have a significant impact on both oil consumption and greenhouse gas emissions in the transportation sector. Electrifying our transportation system can increase efficiency and reduce fuel costs. Additionally, efforts to develop sustainable fuels from biomass promise to dramatically reduce our dependence on oil and maintain the level of mobility we now enjoy.