US energy security is at its strongest point in 2 decades, the latest edition of the US Chamber of Commerce’s Index of US Energy Security Risk found.
The index employs 37 different energy security metrics in four major risk areas: geopolitical, economic, reliability, and environmental. A lower index score indicates a lower level of risk, it explained.
The seventh annual edition of the index covers 1970-2040 and incorporates the latest historical data and forecast models. In 2015—the most recent year available—risk dropped 3 points, to 78, the lowest level since 1996, the US Chamber said on Dec. 14.
“It is not a coincidence that American energy security has shown vast improvements at the same time that America’s innovative energy industry was able to ramp up oil and gas production,” said Karen A. Harbert, president of the Chamber’s Institute for 21st Century Energy, which produces the annual report.
Measurements related to oil and gas—such as imports, import expenditures, and oil prices—and to efficiency showed the biggest improvements, she said. Despite slumping prices, domestic crude oil output still increased by more than 7%, although that was off the pace of previous years. Natural gas production achieved a record peak, with a 5% increase in 2015, Harbert said.
There were warning signs despite the overall good news, she continued. Crude oil price volatility rose significantly, driven by the desire of some large producing countries to capture greater market share by driving prices down sharply. Rapid price shifts in either direction can create unstable market conditions that increase energy security risks, Harbert said.
In addition, electricity capacity margins—the amount of unused power capacity—have declined, increasing the vulnerability of America’s electric grid in the event of a disruption, she warned.
“The greatest threats to America’s energy security are largely components that we control,” said Harbert. “A continued regulatory assault on American energy production could lead to less diversity and reliability. And perhaps the biggest threat of all is the ‘keep it in the ground’ movement, which if actually implemented, would erase the gains made in recent years and bring us back to an era of dependence on foreign sources of oil.”
Looking ahead, the index projected energy security to average 78.3 points from 2016-40, with some softening of production increases due to prices. However, improvements are expected in energy efficiency and in transportation-related metrics, the US Chamber said.
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