International Association for Energy Economics | 17 Linking Energy Independence to Energy Security By Morgan Bazilian, Benjamin Sovacool, and Mackay Miller* Introduction Dramatic changes in oil and gas production in the United States have resurrected public interest in “energy independence” (see e.g., Houser and Mohan, 2012). 1 This interest came up very rapidly (as Figure 1 depicts) – the rhetoric only 5-7 years ago was dramatically different (see e.g., CFR, 2006). This at- traction likely stems in part from a connotation that “independence” equals resiliency and stability of en- ergy services without risk of volatility. However, both domestic energy issues and geopolitics are consider- ably more interrelated than this argument allows. In addition, the vocabulary used is often imprecise. We briefy explore aspects of the concept, and argue that although politically seductive, energy independence can distract from sound decision-making in the en- ergy sector. In reality, the global energy system is deeply interconnected. Not only is this true for oil markets, as an example, but when focusing on independence (or domestic supply/demand balances), it matters what the situation is in other countries and how it evolves. The case against relying on energy independence as a policy prescription tends to look at the end goals of energy policy, and describes resiliency and stability of energy services not as ends themselves, but rather as means of economic growth, innovation, and social well- being. History suggests that energy independence has persistent public and political appeal, and so the practi- cal challenge is to rigorously ground the exuberance it can generate. To that end, we contextualize energy in- dependence through the more robust concept of “energy security” and broader end goals of energy policy. Of Independence Some degree of enthusiasm is, though, warranted – increasing domestic supply and decreasing imports has numerous possible social and economic benefts. The past fve years have witnessed a sea change in the proven reserves and the production of oil, natural gas, and natural gas liquids in the United States. Largely as a consequence, there has been a marked shift in the import/export balance of these commodi- ties. In the United States, energy independence is commonly defned in terms of the degree of reliance on imports from outside North America, 2 and falling imports have made independence appear attainable. Often the thrust of the energy independence goal is pinned on removing our interests from the Middle East. 3 However, as O’Sullivan (2013) notes, “Interests other than energy, such as terrorism, nuclear proliferation, the security of Israel and the well-being of more than more than 300 million Arabs, will continue to be high on the U.S. agenda”. 4 Two signifcant reports underscore the popular conception of the term. The International Energy Agency (IEA) in its 2012 World Energy Outlook (IEA, 2012) noted that: “The United States will over- take Saudi Arabia as the world’s leading oil producer by about 2017 and will become a net oil exporter by 2030.” 5 In addition, the Citi Group published an infuential report in 2012 (Morse et al., 2012) with the provocative title, “Energy 2020: North America, the new Middle East?” On frst pass both appear to focus only on increases in supply, but in fact both acknowledge a signifcant portion of the balance is due to assumed decreases in demand. That subtlety is often missing from popular discourse, and belies the need for well-designed demand-side policy. Levi (2012a) argues that the notion of independence ignores realities of global markets in oil (the United States does not set that price), promotes com- placency in both domestic energy policy as well as foreign policy, and at the * Morgan Bazilian is with the Joint Institute for Strategic Energy Analysis, Colorado; Benjamin Sovacool is with the Institute for Energy & the Environment, Vermont Law School, Vermont and Mackay Miller is with the National Renewable Energy Laboratory, Colorado . . Morgan Bazilian may be reached at morgan.bazilian@jisea.org See footnotes at end of text. Figure 1: Google trends “interest over time” 2004 to present for the term “U.S. energy independence”. A clear spike occurs beginning in early 2012. Figure 2: Net Import Shares in Various Scenarios (EIA, 2013a)