American demand for energy is increasing faster than secure supplies. Much of the world’s supply of oil is delivered in a restrictive market dominated by unstable or hostile nations, some of which are using energy as a tool to frustrate U.S. national security and foreign policy objectives. Sound national energy policies must enable America to obtain energy supplies from a wide range of sources in a way that is best for the economy and at the same time addresses homeland and national security considerations. An abundant, diverse energy supply is central to America’s freedom and prosperity.
The guiding foreign policy principles for American energy security should therefore focus on protecting America’s energy interests and advancing free global energy markets, in the following ways:
1. Ensure that any effort to reduce reliance on foreign oil is grounded in economically sound policy. The first steps in reducing reliance on foreign oil are to make full use of domestic petroleum reserves and to remove disincentives to investment in oil production from friendly nations. These should be coupled with efforts to encourage diversification away from petroleum by the private sector–led development of alternatives that can compete in their own right. Restrictions on international growth in alternatives, such as the tariffs that limit ethanol imports into the United States, should be eliminated.
2. Develop foreign policies that thwart the capacity of coercive regimes to employ energy supplies as an economic weapon. America should be concerned not only about the dependability of its own energy, but also about that of its friends and allies. Regimes that withhold or restrict energy supplies as an instrument of national policy threaten not only regional stability and prosperity, but also the economy and national interests of the United States. The United States should develop strong bilateral measures to deal with efforts by coercive regimes to wage economic warfare. These might include joint contingency planning, public–private initiatives, and research and development initiatives.
3. Sustain access to the global marketplace. Remaining an integral part of the global economy is vital to long-term U.S. national security and the country’s continuing economic competitiveness. The greatest degree of security comes from having access to the global marketplace and obtaining goods, resources, and services based on market decisions from friendly suppliers. It is in the vital interest of the United States to uphold the principle of freedom of the seas and to promote and protect the ways and means of free trade among nations acting in accordance with the rule of law. To accomplish this, the United States should retain the capability to use all of the instruments of national power—including military, diplomatic, law enforcement, intelligence, economic, and informational power—in any theater where U.S. interests could be at risk.
4. Discourage restrictive international regimes. OPEC and non-OPEC countries with restrictive foreign investment laws, state monopolies, and excessive government intervention undermine the U.S. effort to promote free markets. U.S. economic and foreign policy should seek to discourage these practices.
5. Recognize that not all trading partners are equal. Free people have the right to decide with whom to conduct business, but trade in critical but vulnerable goods and services is best conducted with other free peoples. America’s closest friends and allies should be viewed as the most reliable trading partners for supplying oil and other energy supplies. Geostrategic military and economic alliances will change, of course, and the U.S. should be prepared to adapt, but Americans should seek to conduct energy business with countries that respect the rule of law, combat corruption and terrorism, and foster economic opportunity, democracy, and justice.
Conclusion
Americans understand that freedom, opportunity, and their very quality of life suffer when abundant, affordable energy supplies are threatened. They expect Washington to enact policies that protect their interests. Congress and the Administration would do this best by following these guidelines to advance freedom in energy markets not just at home, but worldwide.
Stuart M. Butler, Ph.D., is Vice President for Domestic and Economic Policy Studies, and Kim R. Holmes, Ph.D., is Vice President for Foreign and Defense Policy Studies and Director of the Kathryn and Shelby Cullom Davis Institute for International Studies, at The Heritage Foundation.
This article is an abridged version of “Twelve Principles to Guide U.S. Energy Policy,” Backgrounder #2046 from the Heritage Foundation. The original article can be found at the Heritage website.
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August 3, 2007
Tobias Wolny, Deutsche BP AG, Bronze Contributor (15)
Unfortunately, the world is more complex, oil & gas reserves are developed in ever more remote and politically less stable regions. What can we do to gain access to these resources? How can we ensure efficient development of global energy resources? How can we create mutual advantage with resource-rich countries at the same time as contributing to their good governance and transparency? These are the challenges we are facing today. And of course climate change, but that appears to be secondary to the authors.
The authors’ advice to retain the capability to use military power to achieve free energy trade sounds disturbing to my Venus-shaped European ears.
I would also be curious to know which coercive regimes the authors have in mind. And I am not sure whether arming Gulf countries and Saudi Arabia is the right way forward to secure free markets and stability in the fragile Middle East, the most important global energy region.