This week in Washington, the U.S. Chamber of Commerce released a first annual report called the International Index of Energy Security Risk. The report compares the relative energy security of countries around the world, with some interesting and unexpected insights.
While there have been previous studies of U.S. energy security, this is the first time several factors have been used to analyze the safety of the nation’s energy security. Those factors include known reserves of oil, gas, coal and other minerals – and a lot more. Energy security may also depend on a country’s natural potential for wind, solar, biomass or hydropower. And perhaps for the first time, the study factors in the population’s level of energy consumption.
Based on those criteria, the most energy secure country (among the top 25 energy users) is Mexico, which came as a surprise to the report’s authors. Mexico is rich in natural resources, produces huge quantities of oil and gas, and its people consume comparatively less energy per capita than many other large developed countries. At the bottom of the list are Ukraine, Brazil, Netherlands, South Korea and Thailand, all of which consume heavily but produce little.
The report may be somewhat interesting to statisticians, but it is vitally important to national leaders for whom these trends inform policy decisions. The United States ranked 7th in energy security despite at least three decades of policy intended to promote energy independence and security.
Several Energy Information Administration chiefs and other U.S. Department of Energy officials from both the Obama and Bush Administrations attended the unveiling of this report, a clear indication of the bipartisan concern this issue represents.
A number of Dawson & Associates clients – including those in the energy business and those whose business depends on reasonable energy costs – follow trends that affect energy policy, and we help them do so. This report is a new tool and is being heavily circulated in Congress and among numerous federal and state agencies. To access the report, please click here.
The bottom line: Policy-makers in the natural resources agencies and committees are already talking about how to move the U.S. higher on the list in next year’s report. We are following those discussions closely so our clients can anticipate important policy changes.
by Greg Walcher, Senior Associate