Chapter 13: Global Geopolitics of Energy

Energy policy is an amalgam of economic, political, military, and foreign policy concerns. The resulting impacts on business are pervasive and are best considered in a global context.

As a general proposition, a nation's energy security should be viewed in dunamic terms. Energy security is tuly achieved through actions that enhance an economy's ability to respond to supply shocks and the volatile prices changes associated with such shocks. Numberous actions can reduce a nation's vulnerability to aggressive energy geopolitical pressures

• Expansion of emergency stockpiles such as a strategic petroleum reserve
• Reliance on a greater variety of standard as well as nonconventional energy sources in order to reduce vulnerability to supply disruptions in any individual region or production category
• Developing the flexibility to switch quickly to alternative fuels
• Maintaining an effective economic stabilization mechanism, comprising rapid adjustments in monetary and fiscal policies that can help to cope with large and disruptive shifts in energy prices.

Identifying sensible policy options is far easier than translating them into proposals that generate public support.
A variety of suggesttions has been offered to foster the development of a comprehensive energy policy. The following is a representative sampling:

• Rely more heavily on the information approach to conserving energy.
• Procide temporary tax subsidies for the purchase of new hybrid fuel cell vehicles.
• Spend more government money on improved highway infrastructure to reduce the amount of gasoline that motorists use.
• Explore for and extract petroleum from a portion of the Alaska National Wildlife Reserve (ANWR)
• Eliminate or reform Corporate Average Fuel Efficiency (CAFE) standards that stipulate required minimum motor vehicle mileage in fuel usage.
• Government regulators should adopt "one stop" shopping when it comes to approving energy installations.
• Eliminate one of the most serious objections to nuclear power-where to store spent fuel.
• Promote maket forces in the consumption of energy
• Promote the construction of natural gas pipelines from the Arctic to the lower 48 states.
• Recognize the domestic weaknesses and fragility of some of the major energy exporting nations.

Developments elsewhere on thr globe have the potential to strongly influence U.S. energy conditions. The seriousness of the potential impacts of changes in energy availability on our society may encourage governmental leaders to develop foreign policies that improve American relationships with the major energy exporting nations and that enhance their lobg-term stability.

source: Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)