US energy planning -- focused on long-term energy security if not outright "independence" -- has left the country wide open to short-term disaster, warns the Energy and Security Research Project at Harvard University.
In terms of this decade, the United States is "extremely vulnerable" to sudden loss of Mideast oil, the project concludes in a report released Dec. 11.
The country is suffering because government officials have taken the long view rather than emphasizing the short term, said Prof. Joseph S. Nye during a press briefing. He is co-editor of the report along with David A. Deese.
While a long-term energy strategy is essential, Dr. Nye notes, it does little to enable the country to cope with a sudden oil crisis over the next five to 10 years.
Thus, he said, the United States also needs to give strong emphasis to such short-term measures as speeding up domestic energy production; rapidly building up the strategic oil reserve, into which only a trickle of oil is being fed today; and developing a "surge capacity" that would enable a rapid increase in production of energy from non-oil-based sources such as natural gas or coal-fired or nuclear electricity.
Full decontrol of fuel prices, allowing market forces to provide incentives for increased production and conservation, is a key element in the study team's thinking. The researchers have little faith in government regulation or price manipulation, except perhaps for some federal subsidy for currently uneconomical energy supplies such as synfuels.
Measures such as these would help the US put its own energy house in order so that it would be in a more credible position to work out contingency plans with its Western European allies and Japan. Inadequate allied preparation for a sudden oil crisis and lack of a US foreign policy that integrates such preparation with its own domestic energy program are among the major factors that have made the US and its allies vulnerable, the Harvard researchers say.
In giving this warning and in recommending action, the Harvard researchers recognize that this is only one aspect of the US energy challenge. But it is a critical aspect which they feel has been neglected and which constitutes a clear and immediate danger. Of all the threats to US and Western security that might arise in this decade, a cutoff of Mideast oil is the most likely because of the basic instability of the region, they believe. Professor Nye noted that the Iran-Iraq war underscores this point.
"It is appalling that so many nations are so ill-prepared to meet a direct threat to their economic well-being and political and military power," the study observes. Or as Prof. William W. Hogan, Director of Harvard's Energy and Environmental Policy Center, put it, "Regarding to an oil cutoff, we're well positioned to make it worse."
The report also points out that measures such as building up the petroleum reserve won't solve all the problems caused by a sudden Mideast oil cutoff. They could, however, cushion its impact, allowing the US six months or so in which to weather a short-term crisis or adapt to a longer-term oil shortage.
The Strategic Petroleum Reserve (SPR) now holds only about a 13-day supply -- 20 percent of the 500 million barrels (bbl) originally planned for 1980. It is being filled at a rate of only 130,000 bbl a day, compared with 300,000 bbl prior to the Iranian revolution. Also, the reservoir capacity is limited. Present capacity of 250 million bbl is expected to rise to 400 million bbls in 1985 and 540 million bbls in 1986 as the government acquires more facilities (such as salt domes). This is to be compared with President Carter's goal of having 1 billion bbls stored by 1985 -- a goal set in 1977.
A variety of factors have slowed down the SPR, including concern that Saudi Arabia may be offended by too strong a stockpile buildup. The Harvard study, however, urges an aggressive SPR policy aimed at stockpiling several billion bbls. This, the team believes, could be done without offending the Saudis.
However, more than a government stockpile is needed, the Harvard researchers say. Equally important is the encouragement of private reserves (which now are the main buffer against loss of Iranian oil). Also, a preestablished plan to open up the stockpile as soon as a crisis arises is important. This would avert a sense of panic that might otherwise arise.
No brief news report can adequately reflect the complex analysis that has gone into this study or present the full scope of its recommendations. These need to be studied in detail to appreciate the Harvard group's message. The report, entitled "Energy Security," is being published by Ballinger Publishing Company and will be widely available.
However, as co-editor Nye noted at the press briefing, the most important goal of the study is to raise the warning outlined here and promote constructive thinking as to what should be done -- both within the new administration and Congress, and among the public.