A group of former high-ranking US officials from the government and military spent three hours working through a mock scenario of an oil crisis caused by a terrorist attack on the world’s largest oil production facility in Saudi Arabia.
Their conclusion? There is not much available to fight an energy crisis in the short term.
Stephen Hadley acted as the national security adviser, which was his role during the administration of George W. Bush. He cannot understand how a country that has known it is dependent on oil for 20 years still finds itself in this situation.
Highlighting that question was the primary goal of the Oil Shockwave simulation which was hosted by Securing America’s Future Energy (SAFE), a nonprofit advocacy group. SAFE consists of retired military leaders and business executives who see energy as a national security issue.
SAFE has used the war game experience of its members to conduct several of these Oil Shockwave simulations. SAFE President, Robbie Diamond, said that it was easier to write the scenario with oil selling for $100 a barrel than it was back when it sold for $60 a barrel.
This year’s simulation was inspired by the “Arab Spring” and the conflict in Libya, both of which have led to the highest oil prices since 2008. The world has not yet had to experience a real oil shortage because it can count on Saudi Arabia to increase production and pick up the slack when needed.
In the simulation, oil prices were trending toward $6 per gallon, about 70% higher than today’s rates. The committee initially looked into releasing oil from the strategic reserves. But using the reserve reduces its value and its effect on prices. The panel noted that the reserves were already tapped by the Obama administration to improve the economy in a coordinated initiative with European nations.
Ari Fleischer, former White House Press Secretary, played the role of the counselor to the president. He stated that the government either needed to open up all public lands that have been closed to oil production or get the country completely off of oil and on to green energy sources. He said that any other strategies would just be “doodling in the margins of history.”
But Hadley pressed Fleischer on this point. He didn’t necessarily buy into Fleischer’s argument that it had to be one form of energy used in the country or another type. Instead, he asked if the two types of energy could be used to complement each other.
John Hofmeister, a former president of the Shell Oil Company, played the role of energy secretary. He stated that any plans from the government would need hydrocarbons in the short term while moving toward other alternatives, such as electric cars.
Moving the country off gasoline for transportation is not going to happen for years, possibly decades, so Hofmeister advocated a solution that provided hydrocarbons for the next ten to fifteen years while also securing a path to greener energy sources in the future.
Hofmeister’s suggestion ended up being the solution that the panel ultimately decided upon: increasing oil production domestically while encouraging the development of electric vehicles to reduce the nation’s dependence on oil. It’s not a surprise that this is the same strategy that is being advocated by SAFE in partnership with Electrification Coalition, an electric car advocacy group.
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Hadley pointed out near the end of the simulation that this solution does not provide short-term answers for the energy situation. Instead, long-term thinking is required to provide short-term solutions in the future. He called on the president to be bold and take a strong leadership position in developing an energy plan to protect the nation from potential oil shortages.