Index of U.S. Energy Security Risk: Assessing America's Vulnerabilities in a Global Energy Market

Forward

Since the second edition of the annual Index of U.S. Energy Security Risk was released last spring, pundits have rediscovered what we at the Energy Institute already knew: the United States has the potential to be an energy superpower. So swift have been the changes in the U.S. energy outlook that some are beginning to entertain seriously the previously unimaginable idea that U.S. energy independence actually may be within reach.

Despite that optimism, however, this year’s Index shows stubbornly high risks for 2012 and into the future. A closer look at some of the individual metrics—such as those related to natural gas—is encouraging, but it is clear we must do better to achieve such a lofty goal.

While some aspects of the energy landscape look very promising, the current energy policy landscape is as inhospitable as it has been in a long time. It does not have to be this way. The U.S. is on the cusp of a domestic energy renaissance, but policy and regulatory uncertainty threatens to hold back U.S. energy exploration jeopardizing the investment and jobs that go with it. Consider the following:

Horizontal drilling and hydraulic fracturing in shale formations have combined to open up vast new areas to natural gas, gas liquids, and crude oil production. The “shale gale” in natural gas has already had a big and beneficial impact on our energy security and economy. The application of hydraulic fracturing to shale gas formations has created a glut of natural gas, changed the energy landscape and brought new jobs in formerly depressed areas of Pennsylvania, Ohio, and West Virginia—even New York has benefited with spillover jobs. These benefits can and should increase, but only if governments at every level act sensibly.