Author: Dyhouse, Tim
Date published: April 1, 2010
Two summers ago, when the price of oil was more than $100 a barrel, the cost to fill up the gas tank of a U.S. Navy destroyer was $1.8 million. At least 60% of the oil used to produce that fuel came from foreign countries.
The price of oil in January 2010 had dropped dramatically to about $78 a barrel. But the dependence on foreign oil sources "will inevitably weaken our military," according to Res. 418, which VFW delegates approved at the organization's 2009 convention.
The resolution notes that such dependence "reduces the leverage" that America holds when dealing with threats from hostile oil-exporting nations such as Iran and Venezuela.
VFW's solution is to diversify sources of American oil imports, expand production of renewable bio-fuels - such as ethanol - enhance protection of critical "shipping choke points," such as the Straits of Hormuz, Malacca and the Gulf of Aden, and develop plans to fight seaborne terrorism aimed at tanker ships.
The U.S. produces more than 8 million barrels of oil per day - the third leading producer behind Saudi Arabia and Russia. But when it comes to consumption, America is far and away the largest user.
"The U.S. imports 60% of its oil and oil products," said Michael Whatley, a partner in the Washington, D.C.-based lobbying firm HBW Resources. "That means the military is relying on 60% imports for its domestic supply. Overseas, it's relying 100% on foreign oil."
America accounts for about a quarter of the world's oil consumption - burning through some 19.5 million barrels each day. The nation's largest government and individual petroleum user is the Defense Department, which consumes some 330,000 barrels of oil each day. In 2008, the Pentagon purchased about 120 million barrels of oil at a cost of $ 1 6 billion.
Russians Drilling Off Rorida Coast
Of the world's top 10 oil producers, four are often at odds with U.S. interests: Russia is second in total production, Iran is fourth, China is sixth and Venezuela is 10th.
Iran's belligerence toward the West is well known. It is currently under three United Nations sanctions for trying to establish a nuclear weapons program. The U.S. considers Iran a state sponsor of terrorism and there is irrefutable evidence that it is supporting al Qaeda and Taliban forces in Iraq and Afghanistan.
China, with the world's most rapid growth in energy demand in history, is moving fast to acquire more oil. Over the last year, the China National Petroleum Corp. (with revenues of more than $188 billion and 1.5 million workers) has purchased stakes in three Iraqi oil fields. Business Week estimates production of these fields at some 3.5 million barrels per day, about what China currently produces domestically.
Closer to home, Venezuela poses the biggest threat to U.S. interests. According to a January 2010 paper issued by the Heritage Foundation, "Venezuela is emerging as a mecca for anti-U.S. hostility and the gateway for anti-American extremism into the Americas."
Even closer is the North Cuban Basin off Florida, which the U.S. Geological Survey says contains 9 billion barrels of oil and 22 trillion cubic feet of natural gas. Last summer, Russia signed contracts with Cuba that would allow a Russian company to work with the Cubanpetroleo monopoly to explore and drill in this area.
Russia, which supplies some 25% of Europe's energy needs, is desperate for new oil sources. Last May, Moscow issued a national security strategy document that explicitly spelled out the former Soviet Union's intentions.
"The international policy in the long run will be focused on getting hold of energy sources, including in the Middle East, the Barents Sea shelf and other Arctic regions, the Caspian and Central Asia," the report states. "Amid competitive struggles for resources, attempts to use military force to solve emerging problems can't be excluded."
Europe learned firsthand the importance of maintaining adequate oil reserves in 2007 during an energy dispute between Russia and Belarus. The 90-day reserve held by members of the International Energy Agency kept supply disruptions to a minimum when Russia cut exports to several European Union countries.
Arctic Holds 25% of Untapped Oil
It's easy to understand Russian interest in the Arctic regions: the U.S. Geological Survey estimates that the area holds up to 25% of the world's undiscovered oil and gas reserves.
A London Times article last May called the Arctic "a strategic resource for Russia." It referenced a Kremlin document that called development of Russian energy reserves by 2020 a "vital national objective" with plans to build army bases along the Arctic frontier.
For VFW, the issue is simple: The nation's political leaders must devise and implement a long-term strategy that reduces the U.S. dependence on foreign oil. But until alternative fuel sources are developed - experts say oil will continue to account for 40% of world energy demand 25 years from now - -the threat to U.S. national security from hostile oilproducing countries will remain.