Military

Today, the Committee holds a hearing on "Oil Diplomacy: The Facts and Myths Behind Foreign Oil Dependency." The national security of the United States depends on the reliable supply of energy to support our needs. Fluctuating oil prices and instability in the Middle East once again are prompting calls for energy independence for the United States.

The enticing prospect of freedom from the whims of foreign rulers has been held by every President since the 1973 Arab oil boycott. Our energy security is also directly linked with the voracity of OPEC’s demands. OPEC — the Organization of Petroleum Exporting Countries —

conspires to fix prices and restrict the supply of crude oil to the world market in order to maximize profits. We must devise alternate sources of energy and supplies to confront this threat. Yet, barring radical changes in our lifestyles, the economy, and technology, our domestic resources alone will continue to fall short of this goal.

As Americans, we count on energy to protect our security, to fuel our cars, to provide heat, air conditioning and light for our homes, to manufacture goods, and to transport supplies. In all of these needs, we, as consumers, pay the price for fluctuations in the global energy market.

Gas prices are largely determined by the price of crude oil, which has fluctuated greatly in recent months. Recently, prices at the pump were as high as $1.73 per gallon for regular unleaded gasoline in Hawaii. Currently in Chicago, the same type of gas sells on average for $1.58 per gallon. The U.S. Department of Energy reports that this summer’s gas prices are expected to reach the third highest on record.

The United States imports fifty nine percent (52%) of the oil it uses, and as an oil importing nation, our energy security is inextricably linked with the political and economic security of our suppliers. Currently, the riskiest factors include: instability in the Middle East and Venezuela; Iran’s recent call to all Arab and Muslim nations to use oil as a weapon against the United States; and Iraq’s recent suspension of oil exports to the U.S., currently amounting to one million barrels of oil per day.

U.S. energy security is not only affected by our imports, but our domestic supplies are an important part of the equation as well. We must examine why domestic production has been falling over the past two decades. Are regulations so overbearing that they place the energy security of the United States in jeopardy? By increasing our domestic production of energy — in both fuel types and efficiency — we ensure our survival in the event of a catastrophic disruption of world oil supplies. I believe this may be accomplished through new technology, which is much more environmentally sound than in years past. I am pleased that the President’s National Energy Plan calls for an increase in the Strategic Petroleum Reserve as a means to address an imminent disruption in supplies, and as a national defense reserve.

Is energy independence possible or advisable? Is diversification of suppliers and types of fuel the answer to the United States’ national energy security? Even if energy independence is not feasible in the short term, greater energy security certainly is. I believe that the means of achieving that lies close at hand, in our own hemisphere – and I would like to suggest, here and now, the creation of the North American Energy Alliance.

Contrary to popular belief, a surprisingly large amount of our imported energy — from oil and natural gas to electricity — comes to us not from the volatile Middle East, but from the Western Hemisphere, primarily Canada and Mexico, with other Latin American countries accounting for much of the rest.

Canada is already our largest source of imported oil, including crude oil and refined petroleum. It also supplies 93% of our natural gas imports. Electricity from Canada comprises a significant portion of the U.S. supply and is projected to grow strongly over the next few years. Our imports of energy from Mexico are at a much lower level, but Mexico’s potential export capacity is enormous, especially in the area of petroleum.

Thus, many of the pieces needed for our energy security are already in place, waiting to be assembled. There is no reason why we cannot work with our North American friends in the immediate future to share expertise and investment in creating an integrated energy market. With the adoption of a common vision of energy security, a commitment to removing the obstacles that hinder the development of the continent’s vast energy resources, and the creation of an integrated energy infrastructure, energy resources can be used for common good between Canada, Mexico and the United States. This North American Energy Alliance would provide our three nations with energy security. Maybe in just five years time, we would be in a much better position than we are in today.

Additionally as exciting, looking further afield, other countries in our hemisphere supply significant amounts of energy to the United States, including Venezuela, Colombia, Ecuador, and Trinidad. There is also tremendous potential for diversification in areas of Africa (which already accounts for 13% of U.S. imports), Russia, and the Caspian Region.

In a century likely to contain many unpleasant surprises and new challenges, the importance of U.S. energy security will only increase. In achieving energy security through diversification, however, we must be mindful of a few things. We must assist emerging energy suppliers in cultivating a responsible natural resource development program which supports sound economic and social development for the betterment of the population. This mutually beneficial partnership will enhance our energy security while providing sorely needed revenues for healthcare, education, and infrastructure abroad.

We have a fine lineup of witnesses, and I believe that they will illuminate all of these issues for us. We look forward to their testimony.