When the going gets weird, the weird turn pro. - Hunter S. Thompson

19 December 2006

WSJ: As Threats to Oil Supply Grow, A General Says U.S. Isn't Ready

Three years into the sharpest spike in oil prices in a generation, policy makers and military leaders across the globe are grappling with the implications of fundamental change in energy geopolitics. One such leader is the new U.S. defense secretary, Robert Gates, who took part last year in a war game simulating disruptions to the oil trade. It concluded the U.S. had few short-term fixes if supplies were jolted.

Supply lines are longer and oil fields more numerous than a generation ago. New threats have emerged, from rebels in West Africa to terrorists targeting Saudi Arabia. With supply and demand tightly balanced, even small disruptions can cause big price swings, endangering economic growth. Nationalistic fossil-fuel powers such as Russia have shown willingness to brandish energy as a weapon. The war in Iraq has hammered the oil industry in the world's third-largest holder of conventional oil reserves.

In this new era, one of the central security assumptions of the 20th century -- that a powerful U.S. military can protect America's energy interests across the globe -- falls short.

As Threats to Oil Supply Grow, A General Says U.S. Isn't Ready (Wall Street Journal [subscription required], December 19, 2006)

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