U.S. energy security: problems and policies

The reemergence of concern about energy security in the wake of the September 2001 terror attacks amplified a theme that was already present in U.S. energy policy debates. Energy security was a central theme in the Bush administration energy policy report released by Vice President Cheney in the spring of 2001. World oil prices rose from about 10 dollar a barrel in 1998 to more than 30 dollar a barrel in late 2000. Prices trended down through most of 2001 to below 20 dollar a barrel, although the combined effect of improving economic conditions, OPEC supply cuts, and Middle East conflict (both actual and potential) have recently brought prices back into the dollar 25 per barrel neighborhood. In 2000 the United States imported almost 60 percent of the petroleum it consumed; imports from the Organization of Petroleum Exporting Countries (OPEC) made up about a quarter of total U.S. consumption. In previous energy security debates in the U.S., most of the attention has been on international oil markets and geopolitics. This time, even before September 11, the energy security debate had a much larger domestic component. The 2001 ''electricity market meltdown'' in California raised large concerns there and nationwide about the causes and consequences of electricity shortages and price volatility. The concerns run so deep that they are likely to have a significant effect on the ongoing debate about restructuring of the power sector though the nature of that effect remains to be determined. Similarly, periods of sharply rising motor fuels prices over the past few years increases well beyond what would be implied just by crude oil price volatility have led to concerns about the effects on households and commerce. All of these concerns are only amplified by worries about attacks on critical energy infrastructure. (author)