According to Yahoo news, a crisis simulation exercise has found that “Oil Dependence Creates Severe National Security and Economic Risks”. However at least one sponsor of the simulation knew that already. Is this simulation or a publicity stunt?
A scenario involving (accodring to Yahoo) simultaneous problems in Nigeria, Alaska and Saudi Arabia, which sent the oil price to over $150 per barrel, was considered by a panel of distinguished experts, including
Robert M. Gates, former Director of Central Intelligence;
Richard N. Haass, formerly at the Department of
General P.X. Kelley, USMC (Ret.), former Commandant of the Marine Corps,
Don Nickles, former U.S. Senator;
Carol Browner, formerly at Environmental Protection Agency;
Gene B. Sperling, former National Economic Advisor;
Linda Stuntz, former Deputy Secretary of Energy;
Frank Kramer, former Assistant Secretary of Defense for International
Security Affairs, and;
R. James Woolsey, former Director of Central Intelligence.
Senator Richard Lugar (R-IN)
Seantor Joe Lieberman (D-CT)
They concluded that the scenario would lead to “widespread economic dislocation and increased global instability”.
Yes. I doubt if anyone would disagree with that!
The simulation was sponsored by the National Commission on Energy Policy and SAFE. SAFE describes itself as “committed to reducing Americas dependence on oil in order to improve our national security and strengthen the economy, while increasing U.S. exports, protecting the environment, and creating U.S. jobs.” (Their website gives a good account of how the simulation was run, and says something about the information they used.)
However, I am always suspicious about a simulation which proves something that the simulator is already committed to arguing. Would you believe a simulation by the tobacco companies which showed that moderate use of tobacco was good for you?
The combination of three crises in three major oil producing areas is, to say the least, maximal. (If you were shot in the head and the heart and the lungs, well, youd expect to be quite poorly for a while.)
The title of the simulation, “Oil Shockwave”, clearly signals what results were expected from the distinguished panel!
Nobody from an oil company was included in the panel – not even somebody recently retired from an oil company – although you might expect someone with that background to have a good understanding of the oil logistics issues.
Im not necessarily arguing with the assumptions made or the conclusions drawn. I just object to somebody dressing up a pre-conceived view as a “simulation”. Simulation is a good technique but should be done honestly.