Report from Business and Military Leaders: Nation Benefits from Oil Boom, but Global Oil Market Reveals the Myth of "Energy Independence"

WASHINGTON, May 8, 2012 /PRNewswire-USNewswire/ -- The current oil boom is creating tremendous economic benefits for the nation, but unfortunately, it won't shield the United States from the price volatility that is inherent in the global oil market, according to a new report from business and former military leaders on the Energy Security Leadership Council (ESLC), a project of Securing America's Future Energy (SAFE).

The ESLC report, "The New American Oil Boom: Implications for Energy Security," examines the notion of energy independence, which is typically defined as ending reliance on foreign oil, in light of the renaissance in domestic liquid fuel production, rising demand from developing nations, and increased geopolitical tensions in oil-rich regions of the world.

"While the new oil boom will alleviate our trade deficit and be an important source of domestic employment growth, unfortunately it won't break our nation's dependence on the highly price-volatile global oil market," said Herb Kelleher, Co-founder and Chairman Emeritus of Southwest Airlines and member of the Energy Security Leadership Council, during the release of the report at the Bush Institute at Southern Methodist University in Dallas. "'Energy independence' for the United States is an admirable goal, but even if the U.S. were to produce enough oil to meet our demand, the domestic price is still set on the global market, meaning a potential supply disruption anywhere can impact the price of oil everywhere."

The report comes at a time when the American energy landscape is experiencing a tectonic shift—especially in the outlook for oil imports. The U.S. now imports less than 50 percent of its oil, which is down from more than 60 percent in 2005. This growth in domestic production will help reduce the trade deficit and be a source for job growth in the U.S. However, the report details how a dramatic increase in domestic oil production won't shield consumers from the economic damages inflicted by high oil prices and price volatility.

As an example, countries that produce more oil than they consume, like Canada and Norway, meet the typical definition of being energy independent. Yet, because the oil market is global, these exporting nations still must pay the going price for oil—currently around $100 per barrel. This dependence on the global oil market demonstrates that the true measure of energy security is not how much oil a nation produces, but how much it consumes.

"American energy security can be achieved only if we are in control of our energy future. Unfortunately, the U.S. is not in control of some of the fundamental drivers of the global oil market prices—including supply control from OPEC, rising demand from developing countries, or the potential for a military confrontation involving a hostile oil-producing nation," General James Conway, former Commandant of the U.S. Marine Corps and member of the ESLC. "This over reliance on petroleum has caused injury to our economy, distorted our nation's foreign policy, and constrained military options."

About SAFE and the Energy Security Leadership Council
SAFE is a nonpartisan organization that aims to reduce America's dependence on oil and improve U.S. energy security to bolster national security and strengthen the economy. SAFE advocates for expanded domestic production of U.S. oil and gas resources, continued improvement in fuel efficiency, and in the long-term, breaking oil's stranglehold on the transportation sector through alternatives like natural gas for heavy-duty trucks and plug-in electric vehicles. In 2006, SAFE joined with General P.X. Kelley (Ret.), 28th Commandant of the U.S. Marine Corps, and Frederick W. Smith, Chairman, President, and CEO of FedEx Corporation, to form the Energy Security Leadership Council (ESLC), a group of business and former military leaders committed to reducing U.S. oil dependence.

SOURCE Securing America's Future Energy