U.S. Energy Security: Getting Better

One of Hayward’s Laws—I’m not sure which number this is—is that there is an inverse relationship between the frequency of a cliché and its lack of substance.  In other words, the more often you hear a term used, the less substantive or meaningful the term is in the real world.  The prime offender of Hayward’s Second Law is “sustainability.”

More on sustainability some other time.  Hard on the heels of “sustainability” is “energy independence” or “energy security.”  “Energy independence” is actually an unsound idea if it means literally getting all of our energy from within the four corners of the United States, for the same reason that no one ever calls for “food independence,” “wine independence” (Mon Dieu!), or “automobile independence.”  (The only people who ever said “We need to end America’s dangerous dependence on foreign autos!” was GM and the United Auto Workers union.  And we didn’t believe them.)

Energy security is more sensible, and is mouthed by politicians across the political spectrum.  But it is poorly defined.

That is, it was poorly defined until the U.S. Chamber of Commerce’s Institute for 21st Century Energy came along and developed a rigorous U.S. Energy Security Risk Index, with 37 quantifiable metrics so that we can mark changes from year to year.  In the full disclosure department, I was an early policy adviser to the Chamber’s Institute several years ago, and participated in some lengthy workshops with the experts who developed the Risk Index, deliberating and debating various data measures and how they should be weighted, etc.  While it is always possible to point out flaws in any such methodology, the point is—no one else is doing this, and so long as a consistent set of measures is used, it takes on a strong presumption of validity.

The fourth report was issued this morning, and while the Index is baselined to 1970, we now have the makings of a time series for the dramatic changes that have taken place—for the better—in just the last few years.  And when this Index was first being formulated several years ago, the fracking-led hydrocarbon revolution was just getting started, and no one knew just how extensive it would be.  The overall composite risk measure has now dropped for two years in a row—the direct result of increasing domestic energy production.  Imagine how much better we might do if we had an administration that supported domestic hydrocarbon production

Here are the main summary points from the Chamber:

  • Most of the drop in total U.S. risk in 2012 was related in one way or another to greater unconventional oil and natural gas output and moderating energy prices.
  • The decline in total U.S. energy security risks in 2012 ends a run of two consecutive years of rising risk.
  • Of the 37 metrics, 26 showed lower risk in 2012, 7 showed higher risk, and 4 showed no change.
  • The metric showing the largest decrease in risk in 2012 is Energy Price Volatility (from 132.9 to 
60.2).

There are some nifty interactive tools on the site if you like to play around with the data yourself (don’t I have an exciting life?), and you can take in the Institute’s director, Karen Harbert, discussing the Index in this 2:30 minute video:

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