Sovereign Energy Independence: Properly Understood and Effectively Achieved in the 21st Century by Spencer Abraham & Mark P. Mills

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Spencer Abraham is Chairman & CEO of The Abraham Group. He previously served as the tenth United States Secretary of Energy and before that as a United States Senator from Michigan.

Mark P. Mills is a Senior Fellow at the Manhattan Institute and CEO of the Digital Power Group.


 

"The geopolitical objective of “independence” is really about preventing one or a few players from being in a position to undermine or manipulate the marketplace, or from using energy as a political tool..."
 
 "At prices and scales commensurate with expected demand, non-hydrocarbon alterna- tives... cannot come close to meeting the scale of global economic requirements..."
 
"Energy policy in the early 21st century is, despite earlier expectations and great invest- ments, still fundamentally dependent on hydrocarbon realities..."
 
"There is no escaping the interconnectedness of global markets, trade, and the perva- sive role of energy in all aspects of domestic economies..."

 


Energy, like food, is a foundational requirement for civiliza- tion. The World Economic Forum’s 2012 Energy Vision Update begins with the observation: “Energy is the lifeblood of the global economy – a crucial input to nearly all of the goods and services of the modern world.” We disagree with the Forum in one respect. Energy is crucial not to “nearly all” but in fact to all goods and services.

Ensuring the availability of an economically sustainable and secure energy supply is one of the primary responsibilities of sovereign governments. Energy independence, properly understood, is a central component in achieving both supply and economic security. The policy options for pursuing “independence” depend on the realities of the day. In this paper we will argue that a clear understanding of the landscape is more important than clever policies, and that, in any case, there are precious few options in regards to the latter.

We begin by noting that two central features of the global energy landscape are the same now as they have been for decades, even centuries. These are the underlying character of both geopolitics and geophysics.

The animating forces in geopolitics have been the same for as long as there have been nation states. National goals, political systems, and social objectives vary widely, and always have. Differences can lead to both unintentional and intentional conflicts. Conflicts are ultimately resolved using the same three tools since time immemorial: business arrangements of mutual convenience, diplomacy, or war. Put simply, people have not changed.

Similarly, underlying geophysical realities of the planet remain constant. The asymmetric distribution of easily accessible high-grade resources is incontestably a fact that creates opportunities for economic or geopolitical advantage, or conflict. (purchase article...)