How Can the United States Address Energy Insecurity?

Recent events, ranging from conflict in the Middle East to damages from the Gulf Coast hurricanes, have brought renewed attention to the issue of energy security—an area of focus in RAND’s Environment, Energy, and Economic Development research program. Two key concerns are the susceptibility of the economy to the adverse consequences of significant energy supply disruptions and price spikes, and the economic and political implications of high payments for oil imports. Debate continues on how these concerns can be ameliorated through changes in energy demands and supplies.

Traditionally, the problems of high and unstable energy prices have been considered in light of actions by foreign producers and instability in the international oil market. However, the Gulf Coast hurricanes of 2005 also highlighted the vulnerability to natural events or terrorist actions of U.S. offshore domestic oil and gas production, as well as coastal refineries and facilities for natural-gas collection and processing. Infrastructure also is an important source of vulnerability, internationally, for supplies of refined petroleum products and liquefied natural gas.

Reduced intensity of energy demand through improved energy efficiency can serve both to moderate oil payments and limit exposure to market disturbances. However, debate continues about what balance of regulation and economic incentives is appropriate for raising current levels of energy efficiency. The threat of market disturbances can be moderated as well by the availability of the U.S. Strategic Petroleum Reserve and strategic stocks in other countries. But this option works only to the extent that the private sector has confidence that the stocks will be used in an effective and coordinated fashion to mitigate significant shocks.

In the longer term, these measures can be complemented by development of new global energy supply sources that are both economically cost-effective and socially and environmentally sound. A number of current efforts show promise, though significant challenges remain. For example, the United States has massive oil resources locked up in oil shale and tar sands, as well as coal resources that could be converted to liquid fuels using known technologies. The challenges here lie in these sources becoming economically competitive with oil and natural gas and producing them without unacceptable social impacts and environmental risks (such as increased CO2 emissions). Other potentially promising energy options could include biomass-based fuels; advanced nuclear power, if waste and proliferation issues can be satisfactorily resolved; and hydrogen to displace gasoline use in vehicles.

A balanced portfolio of energy investment and policies must contain a mixture of actions and time horizons. The greatest reductions in vulnerability will come with a diversity of investment in demand-side and supply-side strategies. The United States can benefit from increasing its own energy efficiency, but new energy supplies need to be developed at a global level.

READ MORE: In Search of Energy Security »

Recovering from the Gulf Coast Hurricanes: Lessons Learned from Past Floods

Devastating as Hurricane Katrina and its consequent flooding were in the Gulf Coast region, such natural disasters are not one-time events. As the region continues to recover from Katrina and the levee failures in New Orleans, and as it considers possible future natural disasters, one question is what lessons policymakers can learn from past devastating floods. As part of the RAND Gulf States Policy Institute, RAND Corporation researchers studied four floods that occurred since 1948—two inside and two outside the United States—in terms of the “cycle of restoration”: anticipation of a possible flood, the actuality of an event, and the aftermath.

The study made several general observations that span the cycle of restoration. First, responding to the lessons of history mitigates potential damage from floods, even when major floods are few and far between. Second, the critical concept of integrated water resource management policy—particularly the implication that flood control may include leaving otherwise valuable land unprotected to serve as a buffer—is necessary but may be difficult to accept. Third, clearly delineating roles and responsibilities for preparedness and response in advance produces better outcomes. Finally, the study found that in the aftermath of disaster—with its disruption of the status quo—it can be worthwhile to consider improvements to social and physical infrastructure that go beyond flood control.

READ MORE: Preparing for Future Floods: Analyzing Reconstruction Pathways from Past Floods Can Help »

Forthcoming Report

In collaboration with the Louisiana Coastal Protection and Restoration Authority, the U.S. Army Corps of Engineers (USACE) is developing a comprehensive plan for hurricane protection and coastal restoration. The RAND Gulf States Policy Institute, with researchers from RAND and the University of New Orleans, is helping USACE to develop a decision framework supporting the planning process, applying techniques developed at RAND for addressing deep uncertainty in policy problems, including Assumption-Based Planning and Robust Decisionmaking.

The RAND Environment, Energy, and Economic Development Program conducts research and analysis on environmental quality and regulation, energy resources and systems, water resources and systems, climate, agriculture, oceans, natural hazards and disasters, and economic development. To access our research, please visit our website at http://www.rand.org/ise/environ/.

The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world.

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