Oct
24

Fmr. Head of USTRANSCOM Talks Fuel Diversification, Energy Security

 
This Friday, General Duncan McNabb (ret.), former commander of U.S. Transportation Command (USTRANSCOM), the logistics behemoth of the American military, spoke before a morning session at the Southeast Alternative Fuels Conference & Expo, in Raleigh, North Carolina The General greeted a full house to highlight the critical importance of fuels such as electricity and natural gas in the future of transportation, especially with respect to long-term American energy security. For over a century, the struggle for international power has been inextricably linked to oil. Pearl Harbor, the event that thrust the U.S. into World War II, was Japan’s response to a U.S. oil embargo, slowly strangling the country’s economic and military capabilities. In the European theater, Germany’s failure to seize oil production in the Caucasus meant quickly exhausting supplies in the face of a well-oiled Russian force. 72 years after 1942, the story has changed little. Global tensions are at an all-time high today, and oil plays an integral role in contributing to these tensions. Russia’s status as a major oil and gas producer elevates the importance of its conflict with Ukraine. Iraq’s struggle with the Islamic State and control over its northern oil fields is even more imminently worrying, as the terrorist group earns up to $2 million daily from these captured resources. Without oil in these regions, it is safe to say the geopolitical implications—and the U.S. foreign policy approach in these areas—would be radically different. We have enjoyed a short period of relatively stable oil prices and low volatility, but events like these continuing to unfold around the world should give us pause. Flashpoints can trigger spikes in the price of oil at a moment’s notice, and our tremendous reliance on this resource leaves us extremely vulnerable to events beyond our control. Oil production in Russia and the Middle East limits our ability to act diplomatically and militarily. Our country must embrace the technologies that reduce our oil dependence and shield us from these global events beyond our control. Diversifying the transportation sector, which is responsible for 70 percent of American oil demand, will enhance our economic resilience while improving America’s ability to conduct diplomacy in all scenarios. USTRANSCOM manages 45,000 active-duty personnel, who are responsible for an impressive 1,900 air missions, 25 ships underway, and 10,000 ground shipments every week. In 2012, aerial refueling alone totaled 1.2 billion pounds. Oil powers the U.S. military, and the same goes for our country as a whole. The United States is dangerously dependent on oil, and this trend shows little sign of changing. Currently, 92 percent of America’s transportation sector runs on petroleum fuels, and U.S. household expenditures on gasoline exceed $400 billion a year. In addition, we spend up to $83 billion annually to keep the flow going in places around the world, risking American lives and driving up government spending. We need a permanent solution to our over-reliance on oil: a balanced approach, drawing on new sources and new methods to achieve lasting energy security. This means a comprehensive, national plan for deploying alternative fuel technologies, such as electric vehicles (EVs), natural gas trucks, and more efficient traditional gasoline engines. Electric vehicles (EVs) have made great progress in recent years, and over 247,000 have been sold since 2011 alone. Battery costs are expected to drop as low as $200 per kWh (from $600-$1000 today) as early as 2020. Because an electrified transportation system is one that relies on a diverse set of fuels, no one fuel source—or producer—would be able to hold our transportation system and our economy hostage the way a single nation can disrupt the flow of petroleum today.
Oct
24

Shale Producers Put to the Test

 

With oil prices dropping, U.S. shale producers are facing their biggest challenge yet: how to continue the momentum of recent years without the safety of high oil prices to ensure the profitability of continuously drilling new wells. Shale production isn’t cheap. Unlike convention oil reserves in the Middle East, where production cost per barrel is often less than $10, shale production ...

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Oct
22

New Report: As Oil Tumbles, What are the Risks for Exporters?

 

With ISIS militants making continued advances in Iraq and Russian President Vladimir Putin threatening European gas supplies ahead of winter, there has scarcely been a time when energy issues were more solidly at the forefront of American and global security challenges. Yet, with oil prices sitting well below $90 per barrel (bbl) amid weakened global demand and rising supply from U.S. ...

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Oct
21

Report Warns of Capex Crisis for Oil Majors

 

Crude oil prices tumbled this month on the heels of historically high U.S. oil production and a downwardly revised global energy demand outlook. The conventional economic wisdom is that the market requires high oil prices for international oil companies to break-even. High prices, after all, boost the profitability of expensive, unconventional ventures. A new report finds that, in addition, high ...

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Oct
17

Collaborative Solutions: Energy Security in North America

 

Earlier today, Admiral Dennis C. Blair (ret.) former Director of National Intelligence and Commander in Chief of U.S. Pacific Command, spoke before a packed lunchtime crowd at this year’s Chicago Council on Global Affairs U.S.-Canada Energy Summit. His remarks, “Shared Challenges, Collaborate Solutions: Energy Security in North America,” spoke to the long tradition of U.S.-Canadian cooperation, especially on energy issues, ...

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