Energy Security in the Age of Putin

The idea of “energy security,” a more meaningful concept that “energy independence,” has taken on a fresh urgency with events unfolding in the Ukraine.  Energy security is a bit like the cliché about the weather: everyone in Washington talks about it, but no one ever does anything about it.  Or at least not anything sensible.  I always cringe whenever I hear people like John Kerry—but sometimes dumb Republicans, too—say that we needed to build more wind and solar power to reduce our dependence on foreign oil.  (Ooof: wind and solar have virtually no relation to oil imports.  But try explaining that to John Kerry.)

The U.S. Chamber of Commerce’s Institute for 21^st Century Energy has done the most serious work on trying to quantify “energy security” in a meaningful and objective way, and released their latest report yesterday, the Index of U.S. Energy Security Risk.  As you might imagine, the rapid growth in American oil and natural gas production that have caused our oil imports to plunge has improved our energy security significantly.

The Index includes 37 separate measures, and finds that the U.S. improved its position in 26 of them.  The Index set 1980 as a baseline of 100, and puts us this year at a composite score of 95.3.  The chart, including a projection for the next 20 years, looks like this:

One clear takeaway is that we’re not out of the woods yet, and because oil is traded at a world price, we are still vulnerable to price shocks, even if we are less vulnerable to supply shocks.

The Institute also produces an International Index of Energy Security Risk.  Among large energy-using countries, the U.S. ranks sixth; Ukraine ranks last.  The report was completed before recent events, so Ukraine probably needs an asterisk just now.