Congressional Briefing Book

Table of Contents | iii table of contents

Introduction...... iv

Part.I:.Fundamentals.of.the.Global.Oil.Market...... 1 Global.Oil.Consumption...... 4 Global.Oil.Production...... 7 Oil.Prices ...... 11 The.Role.of.OPEC.Spare.Capacity.in.Oil.Prices...... 12 Global.Oil.Reserves...... 14 Defining.Big.Oil...... 15

Part.II:.U .S ..Oil.Dependence...... 17 U .S ..Oil.Consumption...... 20 U .S ..Oil.Production...... 22 Economic.Costs.of.U .S ..Oil.Dependence ...... 27 National.Security.Costs.of.U .S ..Oil.Dependence...... 30

Part.III:.The.Role.of.Public.Policy...... 33 Oil.Intensity.and.Vehicle.Efficiency...... 34 Domestic.Oil.Production...... 38 Research.and.Development...... 41

Part.IV:.Perspectives.on.Alternative.Vehicle.Technologies...... 43 Natural.Gas.Vehicles...... 44 Biofuels...... 46 Electric.Drive.Vehicles...... 48

Media.Clips:.Recent.Press.on.Energy.Security...... 51 iv | About the Organization

Securing America’s Future Energy (SAFE) is a non- partisan, not-for-profit organization founded in 2004 for a single reason: to safeguard our nation’s economic and national security by reducing America’s dependence on oil.

We believe that America’s dependence on oil is one of the single greatest threats to the nation’s long-term security and prosperity. The path forward must enlist a combination of approaches. There is no single solution; to achieve our goal requires a lasting and sustained commitment.

In 2006, SAFE joined with General P.X. Kelley (Ret.), 28th Commandant of the U.S. Marine Corps, and Frederick W. Smith, Chairman, President, and CEO of FedEx Corporation, to form the Leadership Council (ESLC), a group of business and military leaders committed to reducing U.S. oil dependence. SAFE and the ESLC published several ground-breaking policy documents during the next two years, including Recommendations to the Nation on Reducing U.S. Oil Dependence and A National Strategy for Energy Security. The strength of these policy arguments, combined with the ESLC’s dedication to the goal of energy security, helped the Council play a major role in the drafting and passage of the Energy Independence and Security Act of 2007, which contained the first improved fuel- economy standards in a generation.

In 2009, SAFE brought together a group of business leaders representing the entire value chain of the electrified transportation sector to form the Electrification Coalition (EC), a nonpartisan, not-for-profit organization committed to promoting policies that accelerate the commercialization of plug-in electric vehicles (PEVs). That same year, the EC published its first major report, the Electrification Roadmap, a detailed plan designed to facilitate a transformation of the U.S. light-duty vehicle fleet from one dependent on to one largely powered by electricity.

SAFE and its partner organizations believe the costs of our oil dependence extend well beyond the price of gasoline. Every U.S. recession in the past 40 years has been associated with an oil price spike, while more than $1.4 trillion in U.S. wealth has been transferred abroad since 2007. Oil dependence also constrains U.S. foreign policy and limits our options with hostile governments in a number of oil-exporting states.

SAFE has laid out an ambitious plan to advance energy security in the United States. Our approach focuses on expanded domestic production of oil and natural gas, improvements in fuel efficiency, and a long-term shift in the transportation sector toward electrification of light-duty vehicles and natural gas for heavy-duty trucks. Breaking oil’s stranglehold on our economy would represent a substantial strategic and economic victory for the country, and we believe this goal is within reach. Energy Security Leadership Council | v

co-chairs

General P.X. Kelley, U.S. Marine Corps (Ret.) Frederick W. Smith 28th commandant