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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach

School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies

Cornell University

16 East 34th Street, 4th floor---------------------- Stuart Basefsky

New York, NY 10016 -------------------------------Director, IWS News Bureau

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Congressional Budget Office (CBO)

 

ENERGY SECURITY IN THE UNITED STATES [9 May 2012]

http://www.cbo.gov/sites/default/files/cbofiles/attachments/05-09-EnergySecurity.pdf

[full-text, 38 pages]

 

InfoGraphic

http://www.cbo.gov/publication/43232

or

http://www.cbo.gov/sites/default/files/cbofiles/attachments/43232-infographic-EnergySecurity.pdf

[full-text, 5 pages]

 

Contents

CBO

Summary iv

Energy Security and Its Economic Significance 1

What Is Energy Security? 1

Economic Effects of Disruptions in the Supply of Energy 1

Potential Effects of Disruptions in Key Energy Markets 4

Oil 4

Box 1. Oil Independence and the Worldwide Oil Market 9

Natural Gas 10

Coal 12

Nuclear Power 13

Renewable Sources 13

What Role Can the Government Play in Enhancing Energy Security? 14

Energy Security for Electricity 14

Regional Generation, Spare Capacity, and Flexibility 15

Box 2. Disruptions in the Delivery of Electricity 18

Electricity Pricing and Demand 18

Energy Security for Transportation 19

Box 3. Reduced Vulnerability to High Heating Costs 20

Refinery Capacity 21

Consumer Demand for Oil 21

Policy Options to Dampen the Effects of Disruptions in Oil Supplies 22

Lists of Tables and Figures 29

About This Document 30

 

[excerpt]

Energy use is pervasive throughout the U.S. economy. Households and businesses use energy from oil, natural gas, coal, nuclear power, and renewable sources (such as wind and the sun) to generate electricity, provide transportation, and heat and cool buildings. In 2010, energy consumption represented 8.4 percent of U.S. gross domestic product.

 

Disruptions in the supply of commodities used to produce energy tend to raise energy prices, imposing an increased burden on U.S. households and businesses. Disruptions can also reduce the nation’s economic output and thus people’s income. This paper examines energy security in the United States—that is, the ability of U.S. households and businesses to accommodate disruptions of supply in energy markets—and actions that the government could take to reduce the effects of such disruptions.

 

The vulnerability of the U.S. economy to disruptions in the supply of a particular energy source depends on the importance of that energy source to the economy. More than 80 percent of the energy consumed in the United States comes from oil, natural gas, or coal. For each source, several factors determine how vulnerable the nation is to a disruption in its supply:

 

The extent to which disruptions occurring anywhere in the world affect energy costs in the United States,

The likelihood of disruptions and the ability of energy suppliers to respond to disruptions if they occur, and

The ability of energy consumers (including electricity producers, oil refiners, households, and businesses) to shift to other, less expensive sources of energy.

Consumers and the economy are more vulnerable to disruptions in oil markets than they are to disruptions in other energy markets, as shown by a comparison of the two largest energy-consuming sectors of the U.S. economy—transportation and electricity. In particular, transportation is almost exclusively dependent on oil supplied in a global market in which disruptions can cause large price changes. Moreover, consumers have few easy and inexpensive options for switching to other fuels or reducing consumption of transportation fuels. In contrast, electricity can be produced from several sources of energy, all of which are less prone to disruptions, and consumers have more options for reducing demand for electricity.

 

 

 

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