More and more we are discovering that our access to oil is guarded by our soldiers, airman, sailors and marines – and for good reason.
The U.S. economy is dependent on oil based fuels for virtually all of its transportation needs.
As a finite resource in high global demand, our access to oil and the requirement to keep its price low is critical for the U.S. economy.
As supplies thin, oil prices set on a global market will be increasingly influenced by the politics of a few oil rich nations. This will put increasing pressure on the U.S. to alter its foreign policy in reaction to nations that can threaten oil supplies.
Our reliance on oil has national security and budgetary implications as we are diverting our military forces to defend oil supplies.
This can be seen in the U.S.’s reaction to the latest saber-rattling emanating from Tehran.
In the wake of E.U. oil sanctions, Iran announced on July 2nd that it would consider proposed legislation to disrupt traffic in the Strait of Hormuz, a choke point through which one-fifth of the world’s oil is transported. A closing of the strait would significantly drive up global oil prices, temporarily crippling the global economy.
In response, the U.S. decided to quietly move military resources to the Persian Gulf. The U.S. has had a military presence in the Gulf since 1991, but the recent movement of ships and aircraft to the region is a clear reaction to Iran’s threat.
There are currently 50,000 U.S. troops and 30 U.S. ships, including two aircraft carriers in the Gulf region. In recent weeks the U.S. has deployed four mine countermeasures ships and over 20 fighter jets to the gulf while ordering an extra 200 Tomahawk cruise missiles to the region.
The show of force is a clear indication that the U.S. military is diverting valuable security resources to secure oil transportation.
The need for these costly operations could be mitigated if the U.S., especially the U.S. military, were to expand its liquid fuel options.
The Navy along with Department of Agriculture and Department of Energy has a set fourth an ambitious $510 million plan to directly invest in domestic biofuels companies. The plan is the first step in a long-term strategy to create a market for alternative fuels.
The joint departments plan to use the Defense Production Act (DPA), which allows for the military to directly invest in industries of strategic national security importance. In the 1980’s the Department of Defense used the DPA to invest in silicon carbide, semiconductors, microwave power tubes and superconducting wire. These investments created leading industries in Silicon Valley and elsewhere that put the U.S. at the forefront of the telecommunication wave.
A government investment in biofuels could put the U.S. at the forefront of the inevitable renewable energy wave.
With the ability to cut down on costly military operations that divert our national security resources, (and help create a potential billion-dollar industry) investing in biofules is an opportunity we cannot afford not to take.