Energy Security Leadership Council

From MarketsWiki
Jump to navigation Jump to search


FTSE Russell banner 2016.gif
FTSE Russell banner 2016.gif


Energy Security Leadership Council
Headquarters Washington, D.C.
Products Non-partisan group to address U.S. energy issues
Web site http://www.secureenergy.org/

The Energy Security Leadership Council is one of the projects of Securing America's Futures Energy (SAFE), a nonpartisan organization that aims to reduce America's dependence on oil, addressing business and technology, politics and advocacy, and public education and media.

The Energy Security Leadership Council, one of several efforts of SAFE, "brings together some of America's most prominent business and military leaders for a major effort to support a comprehensive, long-term policy to reduce U.S. oil dependence and improve energy security. The Council will work aggressively to build bipartisan support."[1]

Stated Principals of the Council[edit]

  • America's dependence on oil imperils our economic and national security.

As the lifeblood of our economy, oil dependence endangers American jobs and the American way of life. Whether a company uses oil as a manufacturing input or as a fuel for shipping and distribution, high and volatile oil prices result in price increases, closings, and layoffs. Moreover, the uncertainty of future oil prices in an era of global terrorism and rising demand creates vexing planning and growth challenges for a broad range of American industries.

  • Because oil is a fungible global commodity, events impacting supply or demand anywhere will affect oil consumers everywhere.

A country's exposure to world price shocks is a function of the amount of oil it consumes and is not significantly affected by the ratio of "domestic" to "imported" product. There needs to be a greater emphasis placed on managing energy interdependence.

  • Oil is an instrument of power politics.

Oil dependence puts tremendous leverage in the hands of foreign governments and influences and constrains U.S. foreign policy.

  • Unlike many of the problems confronting government decision makers, oil dependence can be addressed using existing and proven solutions.

It is, however, essential that our efforts focus on remedies that produce the greatest possible improvements. In addition to addressing some supply issues and industrial demand, such an approach requires focusing on transportation. The transportation sector accounts for 67% of U.S. oil consumption and relies on oil for 97% of its energy needs. Substantially reducing demand in the transportation sector would ease the balance between supply and demand so that critical industries and transportation needs with no alternatives would have a sufficient supply at an affordable price.

  • Pure market economics will never solve this problem.

Markets do not account for the hidden and indirect costs of oil dependence. Businesses focused on highest ROI opportunities are not in a position to implement "measures that matter," many of which depend on technologies and fuels that can not currently compete with the marginal cost of producing an additional barrel of oil. In addition, the market alone will not act preemptively to mitigate the enormous damage that would be inflicted by a sudden, serious, and sustained price increase.

  • Government intervention is necessary.

Government action is required because many of the solutions require decades to mature. In addition, government must commit to a sustained effort, even if we were to experience a period of lower oil prices. Government proposals must be designed so that businesses find them useful; for example, tax credits and similar incentives must last long enough to allow businesses to recover investments and engage in critical long-range planning. While recent legislation has pointed us in the right direction, bolder action must be taken.

  • Policies to reduce U.S. oil demand will require significant resources, the expenditure of which is justified by the size and nature of the threat to the nation's economic and military security.

The costs of implementing "measures that matter" are dwarfed by the costs of continued oil dependence.

  • The engagement and active involvement of a broad cross-section of the business community will be crucial to the enactment of legislation and the adoption of solutions that will meaningfully reduce oil dependence.

As operators of the engines of economic growth, business executives have a unique capacity to engage elected officials. Political leaders recognize that businesses ultimately will need to operate in a competitive environment that includes tools and incentives developed by legislators. Therefore, it is in the best interests of business leaders to be active in helping to inform policy debates in this area. Members of Congress have expressed an eagerness to work with the business community in the future.

References[edit]