Saudi Oil Attacks A Wake-Up Call For U.S. Energy Security

by Steve Bucci: Saudi Arabia recently announced that its long-awaited initial public offering for Saudi Aramco, the state-owned oil company, will take place in December. The IPO — eagerly anticipated by investors — has experienced multiple delays, including volatile oil prices and, more recently, the attacks on Aramco oil production sites by Iran. Aramco Chairman Yasser al-Rumayyan alluded to those attacks, telling CNBC “that the company was a safe bet for investors despite some concerns over the security of Saudi oil infrastructure.”

Setting aside any Wall Street implications, the September attacks were a violent reminder of the nexus between energy, geopolitics, and international relations. The United States — now the world’s leading energy exporter and Iran’s most significant nemesis in the short term — must, in the long term, look inward to assess energy preparedness and security.

If anything can be gleaned, it should be that the stakes continue to rise in what Senate Energy Chairwoman Lisa Murkowski of Alaska described as a “teachable moment.” For the U.S. not to consider itself a target risks leaving energy assets and future prosperity vulnerable.

Increasing global demand and fossil fuel industry innovations have spurred the U.S. on a historic run of energy production thanks in large part to natural gas replacing coal as the country’s leading resource for electricity generation.

The U.S. Energy Information Administration has reported that the U.S. is set to become a net energy exporter in 2020, underscoring “large increases in crude oil, natural gas, and natural gas plant liquids production.” Quite the turnaround from a decade ago when the U.S. was dependent on others to provide a large part of its energy needs.

The domestic resurgence can be credited to investment in areas that previous administrations shunned, such as Texas’ Permian Basin, the current darling of the oil and natural gas industry. As Forbes reported in April, the Permian Basin has overtaken the Aramco Ghawar site to claim the title of top oil producer. This growth has been matched, and in some instances exceeded, by Permian natural gas production. Since 2011, U.S. natural gas production has increased fourfold, from 100 million to 400 million cubic feet per day. In the same time frame, development of the Marcellus and Utica shale reserves along the East Coast has spiked output from 1.5 trillion to over 7 trillion cubic feet produced annually to bolster total energy production.

We are working to secure the cyber component of the energy sector. As energy distribution systems embrace smart-grid technologies, vulnerabilities to cyber-warfare tactics may increase, as the Department of Energy noted in a recent annual review.

“There have been no reported targeted cyber-attacks carried out against utilities in the U.S. that have resulted in permanent or long-term damage to power system operations thus far.”

That does not mean it could not happen, so vigilance is required, and has been forthcoming. However, the Aramco attacks show the world that traditional sabotage tactics and other kinetic attack methods are not out of style, and other countries’ assets are less secure.

Diversification Is Key
The U.S. can ready itself for any potential outages and maintain critical reserves by further diversifying its energy and infrastructure portfolio. Specifically, an “all of the above” strategy that integrates energy sources, from wind and solar to hydro and fossil fuels to maximize the grid, is the key to resiliency and reliability.

But many of the 2020 Democratic presidential candidates neglect the importance of this concept. Some have gone as far as to call for: a ban on the development of all fossil fuels, rolling back further use of fracking, and closing down highly useful (and safe) means. To that end, it must be asked: Where would the U.S. be without these resources? And what would the world look like without the U.S. as a leading energy player?

Progress toward a world-leading grid starts by advancing energy infrastructure projects such as Lines 3 and 5 in Minnesota and Michigan, respectively. Both of these projects seek to update and modernize older pipelines — reinforcing safety and efficiency in the process. Optimization projects such as those for the Keystone and Dakota Access pipelines will increase transport volumes to accommodate for record domestic energy production.

These are just a few examples as to how American policymakers can further support energy development, investment in infrastructure, and American jobs. The future hinges on energy, and the U.S. must never concede its strategic advantages to the likes of China, Iran and Russia. Our leaders should be wary of the consequences of doing so, and must soundly reject advocates of such regressive policies.
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Steve Bucci, who served America for three decades as an Army Special Forces officer and top Pentagon official, is a visiting research fellow at the Heritage Foundation. Article shared by Issues & Insights.

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