There is no magic wand which one could use to provide energy security. However, a key element in finding a solution is to understand the magnitude of the problem. Perhaps most fundamentally, we must integrate the energy, environmental and foreign policy tracks of our national security. For too long these have been separate, and the energy, environment and foreign policy worlds have hardly spoken to each other. But if we make energy security a top foreign policy priority, we can work for a world in which the interests of energy consumers and producers are increasingly aligned rather than torn apart. At the same time, energy and environmental initiatives can significantly advance our foreign policy interests.

After riding through the present crisis, the U.S. and other key energy states can go back to the lack of a serious energy security policy, which characterized the quarter century since the crises of the 1970s—the Yon Kippur war and ensuing embargo. Or we can respond to the wake-up calls of recent months.

The first point to understand is that today energy interdependence is a fact of life. The US imports more than half its energy from other countries today, and we can expect to import two-thirds by 2025. Americans depend on OPEC producers for over one-third of our energy, and the world depends on OPEC for over half.

Energy security is a critical element in foreign policy! Energy security requires access to sources of production, security of transportation, control of the facilities for processing the raw energy (oil, natural gas, coal, etc.) into useable forms—gasoline, electric power, petrochemicals, fertilizer, cement and metals, etc. and ultimate delivery to the end use consumer. In many cases the outsourcing of processing of energy into useful products resulted from the desire export the pollution, not reduce it and become Greener than thou. Failure in any step can lead to the downfall of the West. Here is why.

2. The ultimate fall of Japan in WW11 can in part be related to lack of energy resources. Some have commented that Japan would have fallen even without the dropping of the bomb.

4. The fall of the Berlin Wall can in part be laid to the success of Saudi Arabia in using oil as a weapon. By Saudi increasing oil production and thus lowering the price of oil, Russia ran out of money.

5. Prior to being selected to lead Russia; Putin wrote that a key element of his leadership would be the use of oil as a tool for geopolitical control. President Vladimir Putin seems determined to restore his country to the superpower status it held when he was a KGB officer. He hopes to accomplish this by turning Russia into an energy heavyweight, enriching the country's new elite in the process. Putin learned his lesson well from Russia's encounter on production levels with Saudi. Now Russia is an observer in the Organization of Islamic Conference (OIC) and the SCO, and also coordinating production with OPEC.

6. So, what are we doing? Making deals with some of the most unsavory characters this side of a Star Wars cantina to maintain energy Interdependence. Today, the actions of the West are occurring because we maintain the Policy of Interdependence in the supply of energy resources.

Energy interdependence requires the defense of not only the resource, it also leads to not using the best technology to maximize recovery in an environmentally sustainable manner AND requiring defense of the shipment of the oil to market. Oil production and processing and alternative fuels produced in the U.S. must meet U.S environmental standards; these strict requirements do not apply to foreign sources. Becoming more energy self-sufficient by increasing domestic production and conservation will reduce global pollution including reduction of Greenhouse gas.

Defending oil transportation routes under policies of energy Interdependence is even more difficult because it involves multiple countries and they are more susceptible to terrorist action. The amount of oil moved on the major transport routes exceeds the production of individual countries.

There are 5 transit choke points in the distribution of oil. It is not sufficient to have friendly relations with the exporting countries; we must also defend the transportation routes.

Bab el-Mandab – 3.2-3.3 million bbl/day -- the strait separating the continents of Asia (Yemen on the Arabian Peninsula) and Africa (Djibouti, north of Somalia on the Horn of Africa), connecting the Red Sea to the Indian Ocean (Gulf of Aden).

If China gets involved consider the Panama Canal and Trans-Panama Pipeline – 400,000 bbl/day and also Russian exports of oil and gas to Europe representing 30% of the gas and 30% from Algeria.

Understanding this is critical, not only from a defensive position but also as an offensive position against our potential enemies. Moving production and manufacturing offshore resulting from increased regulation and CO2 caps does not increase security and may cause increased global pollution.

1. Energy is imported to the U.S. not only in the form of oil. It is imported in the metals such as aluminum, steel, titanium, in the form of petrochemicals, fertilizer, etc. In many cases, we are dependent on these products imported from the same countries as our oil, which are not necessarily friendly to the U.S.

2. Some of our energy is imported in the form of gasoline. This will increase. Saudi Arabia has plans to increase their refining capacity from 4 MM BBL/day to 10 MM BBL/day, further making the West reliant on refined product. This is significant because it reduces flexibility of supply sources and potentially damages the global environment. The potential for oil refineries abroad that can serve the U.S. is so strong that Chevron Corp., though based in the car-happy state of California, is investing in a giant new oil refinery in India rather than try to build a new refinery at home. The companies have turned away from building new refineries at home because the numbers work better abroad, where costs and red-tape and environmental requirements are reduced. Purchasing refinery-processing services overseas also increases the U.S. foreign debt. Thus, transferring wealth abroad. Such actions fit the strategies set out by the Leftists for reducing the energy security and increasing foreign debt of the U.S.

4. Consider Urea. As we all know from our gardening experience, we have to apply nitrogen fertilizer to have good growth. The U.S. imports over 50% of the Urea used to support the food chain. We need these products even to grow the corn to make ethanol. Relying on bio-fuels from crops may jeopardize both the energy and the food supply. The food supply chain is subject to the foreign supply of nitrogen to grow crops.

Iran is the world's second-largest producer and exporter of crude oil, but its antiquated refineries are able to meet barely 60 percent of the domestic demand, according to Iranian government figures. Production stands at 10.5 million gallons a day, compared with daily demand standing at 18.5 million gallons. The situation in Iran is sufficiently severe that Iran is considering rationing. The government is also working on other schemes to cut gasoline use, including a program of switching cars to natural gas.

Even Iran recognized the issue of the vulnerability of Interdependence that the U.S. populous, Congress and the Administration have not yet adequately addressed.

Iran's economy relies heavily on oil export revenues, with such revenues representing around 80-90 percent of total export earnings and 40-50 percent of the government budget. Strong oil prices the past few years have boosted Iran's oil export revenues and helped Iran's economic situation. This has emboldened Iran in their support of the Hezbollah and their nuclear program. For 2005, Iran's real GDP increased by around 6.1 percent. Inflation is running at around 16 percent per year, though unofficial estimates place the figure at 40-50 percent. Iran's oil export revenues have increased steadily, from $32 billion in 2004, to $45.6 billion in 2005, with 2006 estimates at $46.9 billion.

Without both supply of oil and refinery capacity, the U.S. could face similar problems. As the oil producing countries shift to export of refined products, the flexibility of supply sources (Interdependence) will dry up. Consider the impact on the gasoline price following Katrina.

Yet even oil above $100 might be sustainable if households kept spending. If a family spends more on fuel, but the same amount overall, their consumption does not fall: wealth merely transfers to the oil producers. In 1973 consumers stopped buying Detroit gas-guzzlers and traveling abroad: the result was recession. But the difference in 1973 is that prices rose suddenly, and rose in response to a fall in oil supply. By contrast, current rises are driven by rapid growth in demand, primarily from China, while supply has risen not fallen. That does not have the same effect on consumer confidence.

The West could tolerate increased oil prices approaching $100/bbl resulting form increased demand, but it could not tolerate another energy shock. Such a shock would lead to hyperinflation and potentially a depression. This is precisely the risk of energy Interdependence to the West that must be avoided at all cost.

In my article, The Origins of the Next Great War are Visible, I discussed the role of Leftist/Marxist-Islamist Alliance on security. Ben Johnson in his article: The Fifth Column's Return to Iraq describes how some of participants are linked. This alliance, which includes environmental activist and antiwar elements, is instrumental in pushing the immediacy of the global warming agenda over the importance of energy security. Without energy security and financial solvency, the West cannot defend our freedoms and liberty. This is not to say that many supporters of initiatives relating to global warming are not for security of the West, many supporters have not investigated fully the organizations that they support, the potential results of their actions and their other agendas and related organizations. I encourage all readers to do the research themselves.

2. Attempting to maintain access to oil reserves has not improved our position in the developing countries. It has led to such strategies as attempting to cause “regime change.” The U.S. has not even been able to gain support from the ‘willing'.

3. So, what are we doing? Making deals with some of the most unsavory characters this side of a Star Wars cantina to maintain energy interdependence. With Iran entering the Shanghai Cooperation Organization (SCO), which some refer to as a counter force to NATO will control the vast majority of the world's natural gas reserves, as well as a significant portion of its oil reserves, not to mention potential control of the Strait of Hormuz. These moves are significant because they amount to an act of energy encirclement. Central Asia, the greatest remaining promised land for oil and gas development, is completely enveloped within the SCO, limiting hydrocarbon access to non-SCO nations.

Barely acknowledged by the Western media, military exercises organized by Russia, Kazakhstan, Kyrgyzstan and Tajikistan under the Collective Security Treaty Organization, (CSTO) were launched on the 24th of August. These war games, officially tagged as part of a counter terrorism program, are in direct response to US military threats in the region including the planned attacks against Iran.

The SCO has a close relationship to the CSTO. The structure of military alliances is crucial. In case of an attack on Iran, Russia and its CSTO allies will not remain neutral. In April, Iran was invited to become a full member of the Shanghai Cooperation Organization (SCO). So far no concrete timetable for Iran's accession to the SCO has been set. This enlargement of the SCO, which also includes observer status for Iran, India, Pakistan and Mongolia, counters US military and strategic objectives in the broader region. Moreover, China and Russia, which are partners in the SCO, also have a longstanding bilateral military cooperation agreement. In August 2005, China and Russia conducted joint military exercises.

The conduct of the CSTO war games must be seen as a signal to Washington that an attack on Iran could lead to a much broader military conflict in which Russia and the member states of the CSTO could potentially be involved, siding with Iran and Syria. Also of significance is the structure of bilateral military cooperation agreements. Russia and China are the main suppliers of advanced weapons systems of Iran and Syria. Russia is contemplating the installation of a Navy base in Syria on the eastern Mediterranean coastline. In turn, the US and Israel have military cooperation agreements with Azerbaijan and Georgia.

In Azerbaijan, U.S. negotiators held their noses and struck a deal with a corrupt and brutal government to build a $3.6 billion pipeline that goes through Georgia to Turkey. Conventional wisdom has led the U.S. to be very keen on this pipeline because Russia, China and Iran can't touch it—or can they? With the SCO in place, the future for export may require concessions regarding the nuclear issue with Iran.

The U.S. is also making energy deals in Turkmenistan, a country where the leader is enforcing a personality cult that Kim Jong Il would envy. He's committed a long list of horrific crimes, including boiling at least one political opponent to death. But that hasn't stopped International Oil Companies from striking multi-million-dollar deals to develop Turkmenistan's rich Burun oil deposit and the Turkmen part of the Caspian Sea.

4. Interdependence has led to financing the very regimes that in some cases are funding terror and do not adhere to the basic concepts of human rights, let alone adhere even to the basic environmental standards. Attempting to develop energy interdependence in regions controlled by the SCO, for example hardly lead to a plan for security. The violations of human rights are overlooked in the name of ‘reality politics' and the need for oil. For every $5 increase in the price of oil, Iran gains $85 million a day for support of Hezbollah.

The California Chamber of Commerce said businesses would suffer from the proposed laws. Allan Zaremberg, the chief executive of the California Chamber of Commerce, said: “[The proposal, known as] AB32 will have a severely negative effect on the affordability and reliability of California's energy supply, jeopardising California's economy and our global competitiveness.” The manufacturing companies may make a dash for the borders, not only of California but potentially the United States.

As Scott Duke Harris has commented in the article The top tech hub—for now, California is already at a disadvantage when it comes to recruiting. Anecdotal evidence abounds on the burden of housing costs. One CEO, Guardino said, recently told him of having 17 out of 20 applicants reject job offers in part because of the Bay Area's high costs.

The various costs associated with doing business in Silicon Valley, Guardino said, rarely prompt companies to relocate to other regions. But it can have profound effects on where companies choose to expand their workforce. ``What happens most often is just a quiet decision that, as jobs are added, they're not added here,'' Guardino said.

On a positive note, the leadership group, which includes the Mercury News as a member, said California's environmental policies, such as a new effort to limit greenhouse gases, will help stimulate ``clean tech'' development in the years to come. SVLG member Barry Cinnamon, founder of Akeena Solar in Los Gatos, says the incentives encouraging solar production could also spur a new wave of manufacturing.

Although Green appears to be the color choice of the year, environmental taxes are appetizing but not a free lunch. Green taxes cause distortions, like any other taxes. A tax on carbon will reduce carbon emissions locally, but it will raise the price of goods and services and reduce real wages. Environmental taxes are not the equivlent of a perpetual motion machine, except for potentially the venture capital groups investing in “clean tech.” California, with the valley leading the way, is a magnet for “clean tech” investments such as alternative energy technologies including solar and biodiesel. According to the Cleantech Venture Network, California companies received $484 million of the $1.6 billion invested nationwide in clean tech.

“The valley ranked dead last in a comparison of 12 U.S. tech hubs on a matrix that gave equal weight to six ‘critical issues': unemployment rate, housing costs, traffic congestion costs, 8th-grade math achievement, electricity costs and state tax rates.” The CO2 cap legislation will do nothing to improve the ranking of Silicon Valley and the quality of life for the average person.

Perhaps most fundamentally, we must integrate the energy, environmental and foreign policy tracks of our national security. The actions may create some jobs but also destroy wealth. It is easy to invent policies that create lots of jobs—just make delivery trucks illegal and create work for human porters. Want to create jobs, hire people to shatter windows in homes and businesses and you would create a boon in the glass making industry. However, it wastes the skills and services of a labor force that could have produced things that people really wanted. Exporting our manufacturing, oil production and refining industries to the cabal of countries—members of the SCO and OPEC, etc. may reduce domestic CO2 emissions from the U.S. and the developed countries, but it will increase our foreign debt and make us more insecure. Such actions have a direct impact on Foreign Policy.

Environmental Defense receives financial support from the Vira I. Heinz Endowment, the John D. & Catherine T. MacArthur Foundation, the Ford Foundation, the Turner Foundation, the Joyce Foundation, the Bauman Family Foundation, the Beldon Fund, the Blue Moon Fund, the Bullitt Foundation, the Geraldine R. Dodge Foundation, the Educational Foundation of America, the Energy Foundation, the Howard Heinz Endowment, the Heinz Family Foundation, the William and Flora Hewlett Foundation, the J.M. Kaplan Fund, the W.K. Kellogg Foundation, the Jessie Smith Noyes Foundation, the David and Lucile Packard Foundation, Pew Charitable Trusts, the Z. Smith Reynolds Foundation, the Scherman Foundation, and the Surdna Foundation.

Another organization providing funding to the Environmental Defense is the Open Society Institute. George Soros is Founder and Chairman of the OSI. According to Discoverthenetworks.org, since establishing the Open Society Institute, Soros has given away well over a billion dollars to leftwing causes. In an effort to ensure President Bush's defeat in 2004, he gave $5 million to MoveOn.org, a Web-based, grassroots political network that organizes “electronic advocacy groups” of online activists around specific issues; raises money for Democratic candidates through rock concerts and other entertainment events; strives to win young recruits through its appeal to the Internet-savvy MTV subculture; and generates partisan political ads. Prior to the 2004 election, MoveOn produced ads likening President Bush to Adolf Hitler.

If a single state or even a country imposes a carbon tax or CO2 caps without being joined by others, polluters will simply move elsewhere, causing damage to the economy without much benefit (if any) to the planet. Moving production offshore to countries without pollution controls increases the damage to the planet and endangers the security of the country with controls.

We cannot expect “Money to flow uphill” from the developing countries to the U.S and for the U.S. to pay for the oil we import to sustain our expected way–of-life. When the flow stops, we can expect a giant thud.

1. A program for energy independence was attempted following the “oil Embargo.” It was abandoned. The last year the US was independent of energy imports was 1949. The issue today is whether we can reduce our energy dependence. This should encourage us to revisit the issue.

2. The U.S. does not have to achieve complete independence to gain security and to ultimately lower the price of energy. The commitment will have an impact. Saudi did not wait for Russia to exceed their production, the vary threat of overproduction led to their action.

4. Since either increasing the price or lowering the price can be used as the oil weapon, we must look at ways to increase production and reduce volatility. However, it is not enough to lower consumption, we must indicate our willingness here in the U.S. to increase production in competition with the National Oil Companies (NOC) producers. We must also increase refinery capacity to secure supply. Increasing production must be a part of the plan combined with energy conservation. In fact, the energy industry doesn't need subsidies and incentives – it needs a moratorium on more regulatory incentives to future investment.

“Few [new refineries] are in the U.S. despite considerable expansion and upgrading of existing American refineries, oil companies haven't built a new refinery from scratch in the U.S. in 30 years.

The result is a growing dependence on foreign-produced fuel. Politicians of all stripes say the U.S. should rely less on foreign energy sources. Instead, it has twin addictions—not only to imported crude to feed its refineries, but to imported gasoline to meet demand beyond what those refineries can make.

8. Increasing taxes on the International Oil Companies—Exxon, Shell, BP, etc. (IOCs) and increasing regulations, nationalization, etc., will not increase production.

10. A primary restraint on company's decision to invest in new sources of alternative fuels is that the NOC producers will lower price by increasing production, thus making investments unattractive. It has been the goal of the NOC producers to cause volatility in the market combined with threats of increased production making alternative fuel investment unattractive. The increased production of NOC producers has in the past used low cost to cause addiction to their product. Of course, for the consumer, lower price and exporting pollution (“not in my backyard”) is what they want, even if it leads to energy insecurity. Energy interdependence leads to massive transfers of funds to the cabal of countries—the SCO, Venezuela and indirectly to Cuba. This in turn led to weapons transfer to these countries. Many companies benefit from this funds transfer, such as the money center banks to manage money, M&A and conduct IPOs, weapons suppliers from such as China, Russia, North Korea and construction companies.

It is suggested that the government establish a floor price for imported oil. Such a floor price would remove some of the volatility and increase competition in the alternative fuels industry and conservation. This can be done with a tax on oil imports to bring foreign oil only up to the production costs for domestic production. The tax would apply only when imported oil was less than a price established by congress. The floor would be set below current price. The tax would of course set the minimum price of product, and encourage conservation to start with. The companies would invest because they could be assured of a reasonable profit on new alternative sources and conservation. The alternative sources should include natural gas for example for the manufacture of Urea. The Taxes gained, if any, by the government should be used for research and development of new and alternative sources and development of processes for energy conservation and improved efficiency.

Increasing our energy independence will reduce pollution, increase the competitiveness of the US, increased economic activity, and most important our security. And it may lower energy prices.

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