Destroying Oil as a Strategic Commodity
At the GEOINT Symposium in Nashville, Tennessee, former
director of the Central Intelligence Agency (CIA) Jim Woolsey gave a
chilling account of the implications for national security related to
the United States' dependence on foreign oil. He described the
vulnerabilities of a resource located far from our shores, highlighting
how consumer habits could have dramatic geopolitical consequences. He
then offered a solution to the crisis by suggesting a way to remove oil
as a strategic commodity.
Woolsey's assessment of the problem is similar to what we have heard
from T. Boone Pickens, the oil businessman-turned wind power advocate.
We spend in the range of $350 - $700 billion per year for oil,
depending on the price per barrel. The reality is that the U.S. and
other oil importers like China and India are engaging in the biggest
transfer of wealth in history. The result is that the U.S. is either
directly or indirectly providing funds to support countries that may
not have our best interests at heart. "Oil tends to be produced by
countries that are either run by autocrats or dictators. (One
exception: Norway). So, one of the things we are doing with this money
is contributing to the support of dictators. Putin [Russia] and Chavez
[Venezuela] are a bit quieter with oil at $65 per barrel," said
Woolsey. "[However], a national energy policy that depends on oil is
probably one of the stupider policies ever done. Even at $65 per
barrel, we still have one of the biggest transfers of wealth the world
has ever seen."
Woolsey believes that the answer is electricity derived from sources
such as coal, nuclear, wind or geothermal, which can also be cheaper to
produce. But, there are issues. "The energy system we have to produce
electricity in the U.S. is stressed. It's the sort of highway system we
would have had if Eisenhower had never built the interstate highway
system," said Woolsey. Reflecting on how people view power plants
being built near them, Woolsey said, "We've gone well beyond NIMBE (Not
In My Backyard Ever) to BANANA (Build Absolutely Nothing Anywhere Near
Anything (or Anyone)." The electric grid is also exposed. Woolsey
pointed out that terrorists are using the Internet and geospatial tools
to locate and map the vulnerable spots. And when they find those
exposed assets, it's not too difficult to target the critical links,
especially when the important assets are sometimes marked with large
signs that read "TRANSFORMER."
In explaining how a small, random incident can have a ripple effect
across our national electric grid system, Woolsey recounted the story
of a tree branch falling during an ice storm in Cleveland a few years
ago, which brought down the entire system across the eastern U.S. and
Canada. Woolsey said that the Federal Energy Regulatory Commission
(FERC) is responsible for the reliability of the system but nobody is
responsible for the security of the electrical grid. "[What's] the
heart of the problem with respect to the electric grid? Terrorists are
a heck of a lot smarter than a tree branch," he said. "But in spite of
its exposure to terrorism, it is a system to which we have access.
Unlike oil, which is controlled by other countries, the U.S. has
control of it."
What can we do about the problem? Woolsey sees electricity produced
from coal as the answer, as long as we can sequester the CO2 and make
improvements in the efficiency of renewable energy resources. "But
those are problems we can work on here... We have to lead an
international effort to make changes, [do it] relatively quickly and
improve CO2 emissions," he said. But he also admitted that it's
difficult to replace oil, which operates in a pricing system that
encourages Saudi Arabia and others to turn on the pumps and drive the
price down when demand drops. "This has left people with the feeling
that we can't do anything about this because it gets trashed with low
oil prices," said Woolsey.
There are some developments now that could spell change and he offered
the analogy of "salt." Woolsey said, "For thousands of years,
salt was a strategic commodity. If you had a salt mine, you were
important. Today, are we salt dependent? Nobody cares! Salt, with the
coming of the electric grid, was destroyed as a strategic commodity. It
ended because refrigeration and freezing was a better way. We need to
do that to oil. We need to move as quickly as possible to destroy oil
as a strategic commodity. We need to do to it like we did it to salt."
Woolsey owns a Prius that he converted to run entirely on batteries,
and he is a firm believer in improvements being made in lithium ion
battery technology. "Anything you heard three or four months ago is out
of date," he said. Money is pouring into battery development even by
car manufacturers. "You can plug in overnight for about 50 cents." He
solved the charging challenge for his car by going to Home Depot and
buying a 50-foot power cord. "How difficult is that?" he asked. We
have, he believes, all the necessary technology to do many things now.
Woolsey says he plugs in his car overnight when there is excess
capacity on the electric grid, thus reducing some of the stress that
occurs during peak hours. "If we can get ourselves organized and
utilize things that have already been developed, we can do something
quite remarkable and relatively quickly to replace oil... We have the
opportunity...We don't need an Apollo project; no Manhattan project is
needed ...to break oil's monopoly."
Woolsey shared with his audience the fact that he had made these same
comments at an international conference. Afterward, one individual from
an oil-producing nation came up to him and said, "Jim, you're going to
destroy my country." Woolsey replied, "We don't want to destroy you; we
just think you should get real work."
Published Thursday, November 6th, 2008