Energy Policy and National Security

The impact of U.S. energy production and consumption policies on national security. Since the early 20th century, the U.S. economy has been fueled mainly by petroleum products. By the late 1920s, automobiles had largely replaced the horse and oil-fired engines supplanted steam engines in most U.S. industries. At that time, the United States produced enough oil to meet its domestic demands. In the 1930s, American oil companies were awarded a concession to drill for oil in Saudi Arabia, where vast deposits had been discovered in the previous decade.

Following World War II, it became clear that the U.S. economy was growing beyond the nation's ability to fuel it. Foreign oil sources, particularly in the Middle East, were becoming vitally important to the United States at the very moment that France and Great Britain were withdrawing from the Middle East as part of the larger process of decolonization. This left the United States as the dominant Western power in the region and led to close cooperation with Saudi Arabia.

U.S. Middle East policy since that time has focused on ensuring an unimpeded flow of oil to the United States. The necessity of maintaining a steady supply of energy from the region has been complicated by a history of political crises and conflicts, which have posed increasingly severe challenges to U.S. national security.

Middle East Oil Shocks

U.S. support for the nation of Israel has been at the root of many of the difficulties the United States has encountered in the Middle East. After Israel's founding in 1948, the United States soon became the primary guarantor of the country's existence against repeated Arab aggression. Between 1948 and 1973, the Israelis fought three wars with their Arab neighbors. The U.S. role in the third of those wars led to an oil embargo against the United States in 1973.

The 1973 Yom Kippur War pitted Israel against a coalition of Egypt and Syria. Although the United States took no active role in the conflict, it and its Western European allies supported Israel. In response, the Organization of Petroleum Exporting Countries (OPEC)—a group of the world's leading oil producers—announced it would no longer ship oil to the United States and Western Europe. The member states, most of which were Arab nations, also agreed to a fourfold increase in oil prices. This produced an economic crisis in the United States, where 6% of the world's population consumed one-third of the world's energy.

The impact of the embargo was immediate. The price of gasoline in the United States rose by nearly [Page 235]50% and gas rationing was instituted. Long lines for gasoline became a symbol of the era. Concern for energy consumption led to the implementation of a 55-mile-per-hour speed limit on the nation's highways, the imposition of daylight savings time, renewed interest in alternative energy sources such as solar power, and a new market for fuel-efficient automobiles.

The effect on relations between the United States and its allies was also dramatic. Western Europe, which was even more dependent on Middle Eastern oil as a percentage of its supply than the United States, began to question the wisdom of unconditional support for Israel. Since the 1970s, the United States has often disagreed with Europe about Arab-Israeli issues. The embargo also demonstrated the power of oil-producing nations to alter the behavior of the United States and other advanced industrial nations. Although the embargo was lifted in 1974, the impact on the U.S. economy continued throughout the 1970s, resulting in severe price inflation.

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