National Defense, Oil Imports, and Bio-Energy Technology

20 Pages Posted: 3 Jun 2004

See all articles by Robert M. Ames

Robert M. Ames

Yale Graduates Energy Study Group

Anthony Corridore

Yale Graduates Energy Study Group

Paul W. MacAvoy

Yale School of Management (Deceased); Yale University, Yale Graduates Energy Study Group (Deceased)

Abstract

Terrorist disruptions of crude oil supplies anywhere in the world now pose a serious threat to the U.S. economy. Price shocks from terrorist acts could have a pervasive negative effect on producer costs and consumer behavior, with the potential to derail the current economic recovery. The authors propose insulating U.S. energy prices from world price volatility by gradually eliminating imports of crude oil from non-Western Hemisphere sources.

The U.S. now operates with half of its crude supply from offshore sources. As much as half of these imports could be replaced by expanded production from projects that have been shelved for political reasons or because prices are currently too low. The remainder could come from an extensive and currently untapped supply of crude oil substitutes, particularly bio-energy sources such as ethanol from corn and switchgrass. These sources would be much less vulnerable to terrorist disruption.

The authors also estimate that the costs of pursuing a strategy of eliminating imports would not be nearly as large as conventional wisdom suggests. Even though crude prices would be somewhat higher than current levels, they would also be much more stable, and this price stability would help promote a stronger and more secure economy in the long run.

Keywords: Oil, National Defense, Terrorism, Bio-Energy

Suggested Citation

Ames, Robert M. and Corridore, Anthony and MacAvoy, Paul W., National Defense, Oil Imports, and Bio-Energy Technology. Available at SSRN: https://ssrn.com/abstract=554664

Robert M. Ames

Yale Graduates Energy Study Group ( email )

New Haven, CT 06520
United States

Anthony Corridore

Yale Graduates Energy Study Group

New Haven, CT 06520
United States

Paul W. MacAvoy (Contact Author)

Yale School of Management (Deceased)

Yale University, Yale Graduates Energy Study Group (Deceased)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
403
Abstract Views
4,800
rank
87,945
PlumX Metrics