Editor's Note: This is Part One of a two-part series that explores US energy security. Part One examines the possibility and impact of a prolonged disruption of foreign oil imports to the US.

This past year, the Office of Director of National Intelligence presciently warned US lawmakers that the inevitable escalation of global competition between the world’s superpowers for dwindling strategic oil and gas reserves could devolve into the most important geo-strategic antagonism of the 21-Century, with horrific consequences for US homeland and national security.

The Intelligence Community analysts who arrived at this stark conclusion probably didn’t imagine though that the fictional confrontations they dreamed-up would so soon become so close to reality.

When the Kremlin sent troops en mass into the former Soviet state of Georgia ostensibly to support the Russian-aligned separatist region of South Ossetia, Western concerns about Russia’s true intentions in the region quickly turned to the Baku-Tbilisi-Ceyhan pipeline, an important crude conduit to the West the majority owners of which are US and British energy firms.

The massive Baku-Tbilisi-Ceyhan pipeline stretches across Georgia from Azerbijian through Turkey to the Mediterranean where roughly one million barrels a day of Caspian Sea crude are pumped into oil tankers bound for the US, Western Europe, and Israel.

Presently, Caspian-region energy resources are largely untapped. What is known is that the area holds about 50 billion barrels of proven oil reserves, about 270 trillion cubic feet of proven gas reserves, and an enormous potential for further substantial oil and gas finds.

Consequently, for its part, the US considers the pipeline to be a vital independent crude supplyline backup to what is likely to be increasingly unstable Middle East oil transportation.

Stating very matter of factly at the Georgian International Oil, Gas, and Energy Conference in 2003, Tedo Japaridze, then head of Georgia's National Security Council, said "if something bad happens in the Middle East, if Saudi Arabia crumbles, if energy channels get blocked, this Caspian energy will help define America's energy security."

"If the Russians control or absorb Georgia," Japaridze warned, "they could close down the entire south Caucasus and Central Asia, too ... They could make Georgia an energy bottleneck." 

In October 2002, the Moscow newspaper, Nezavisimaya Gazeta, wrote: "[Russian] weakening [of] Tbilisi will wreck plans to create an East-West energy corridor. Georgia plays a key role in exports of Caspian oil and natural gas direct to Western markets bypassing Russia ... If the Georgia outlet is blocked in the emergent East-West energy corridor, the only alternative to the Russian route will be the route through Afghanistan, Iran, and other countries that are less than appealing to Western markets."

The Baku-Tbilisi-Ceyhan pipeline therefore "was an important strategic foreign policy move [by the US] to link [Georgia and Azerbijian] to the West," HSToday.us was told by Paul Joyal, managing director of the Public Safety and Homeland Security Practice of Washington, DC-based National Strategies, Inc., and a principal advisor to the Baku-Tbilisi-Ceyhan pipeline consortium.

An expert on Russian and central Asian affairs, Joyal was a former staff member of the Senate Select Committee on Intelligence and served as expert advisor to the Security and Defense Committee of the Georgian Parliament and Chairman of the National Security Council and Minister of Defense.

The Georgian/Russian conflict has caused some security authorities to begin to worry that further hostilities could threaten American plans to gain access to even more of Central Asia’s energy resources. Indeed. Western energy companies, backed by their respective governments, have been drawing up plans to develop the Kashagan Field, a Caspian Sea reservoir estimated to contain more than ten billion barrels of crude. The group that's working to develop this field includes Exxon Mobil and ConocoPhillips, and their plan is to transport some of this new found oil through the Baku-Tbilisi-Ceyhan pipeline.

Russia, though, not surprisingly, opposes any Western pipeline that connects the Kashagan to the Baku-Tbilisi-Ceyhan artery, just as it vehemently objected to the BTC pipeline itself.

The Baku-Tbilisi-Ceyhan pipeline was deliberately constructed across the three pro-Western nations specifically to avoid crossing Russian territory and thus making it vulnerable to control or seizure by the Kremlin. Other oil and gas pipelines snaking across Russia that supply East and Western Europe have been turned on and off at whim by Moscow to enforce its increasingly strong-handed “near abroad” foreign policy.

"Russia uses these pipelines for political purposes, shutting them down if they're upset with you," Joyal said, adding Russia's action in Georgia is the "beginning of a new and disturbing Russian foreign policy."

An August 13 Congressional Research Service (CRS) report pointed out that "some observers have raised concerns that Russia’s alleged attempts to bomb the Georgian sections of the Baku-Tbilisi-Ceyhan oil pipeline and the South Caucasus [gas] Pipeline were Russian attempts to disrupt Caspian energy pipelines that it does not control."

B. Lynn Pascoe, UN Undersecretary General for Political Affairs and former US Deputy Assistant Secretary of State for European and Eurasian Affairs, warned that "Georgia's importance to the West cannot be overstated ... Georgia is a fulcrum for East-West energy pipelines. A stable and democratic Georgia will have geo-strategic importance for our international relations far into the future."

Indeed, Georgia is "located at the strategic crossroads of Europe and Middle Asia, situated on the Caspian and Central Asian energy corridor," Joyal said.

US Secretary of State Condoleezza Rice said "we are determined to deny [Russia] their strategic objective," adding, "we are not going to allow Russia to draw a new line at those states that are not yet integrated into the trans-Atlantic structures."

Regional experts are worried that Russia's invasion of Georgia marks the beginning of inevitable clashes between the world’s superpowers this century over oil and gas - in this case, the valuable mineral resources of central Asia.

The recent CRS report states "Russia may have wanted to 'punish' the West ... for seeking to integrate Soviet successor states (which are viewed by Russia as part of its ["near abroad"] sphere of influence) into Western institutions such as the EU and NATO, and for developing oil and gas pipeline routes that bypass Russia."

Mot surprisingly, then, the CRS report notes US analyst Ronald Asmus pointed out that “despite everything we may have hoped for we are in a new geopolitical competition in the old Soviet spheres of influence. We may lose Georgia. We may lose the ... best chance for a democratic future in the Caucasus," and "The next target for Moscow will be Ukraine.”

Indeed, one Italian commentator asserted that Russia’s actions in Georgia represent the beginning of Russia’s efforts to roll back the Euro-Atlantic integration of Eastern European and Soviet successor states.

Superpower confrontations for energy resources in Central Asia has begun. Confrontations with China can't be far behind, especicially as China works to get a foothold in the Middle East for its long-term strategic crude needs. China especially has its sights on Saudi Arabia, the US’s biggest supplier. Beijing already is the leading developer of oil reserves in Sudan, where it's estimated to have locked down 40 percent of production, or six percent of China’s total oil consumption.

Clearly, China’s growing pursuit of Middle East, African, and Pacific Rim crude will have profound security implications for the US, more so if the US is forced to increase its reliance on Gulf region oil.

Not long ago, a simulated oil crisis was played out by surrogates of US government officials inside a mock White House situation room. The turmoil erupted in the Central Caucusus with a terrorist attack that forced the closure of the Baku-Tbilisi-Ceyhan pipeline. More than two million barrels of oil a day suddenly were unavailable to the West during peak winter demand. The crisis deepened when terrorists in the Persian Gulf targeted vital oil infrastructure and shipping. The world was plunged into unparalleled chaos.

The price of available crude shot up to $160 a barrel. Gasoline prices in the US soared to $5 a gallon. Overnight, government leaders were forced to begin considering fuel rationing and stockpile security in order to meet the needs of the military and domestic law enforcement and emergency services providers.

Retired US Army Gen. John Abizaid, former CENTCOM Combat Commander who was one of the participants in the simulation,  soberly said "this scenario could happen tomorrow; it could start tomorrow."

The “simulation made clear the importance of getting beyond sound bites and parochial interests and taking comprehensive action to limit our energy security vulnerabilities," said Robbie Diamond, founder and president of Securing America's Future Energy (SAFE), which along with Harvard Kennedy School’s Belfer Center for Science and International Affairs, created the widely acclaimed, and enormously disturbing, “Oil Shockwave" simulator.

"There are no short-term solutions; once a crisis occurs, America's hands are tied,” Diamond warned.

Oil Shockwave has been performed many times for audiences in the United States and around the world. And while it is "constantly being updated and refined to reflect the most current and realistic challenges," a primer by the exercise’s creators states, "the key findings have remained consistent over time: Oil dependence represents a grave national and economic security threat to the United States,” .

Secretary of Defense and former Director of Central Intelligence Robert Gates, a national security advisor to Oil Shockwave, said “the real lesson here [is that] it only requires a relatively small amount of oil to be taken out of the system to have huge economic and security implications.”

Three years ago, though, the National Commission on Energy Policy ominously warned that “the dependence of the US on oil creates serious national security vulnerabilities that, if exploited, could result in widespread economic dislocation and increased global instability.

“ … America's dependence on oil, particularly oil from unstable and undemocratic parts of the world, threatens national security and economic stability,” said Diamond and Graham Allison, director of the Belfer Center.

“Would Americans accept an emergency restriction on driving, rationing, or forced carpools?” Allison and Diamond posited. “Would we have to deplete our strategic stores, which are held in reserve largely for extreme contingencies, including military shortages? Would we be willing to send troops to secure oil facilities abroad? Would we have to bow to the demands of nations like Iran and Venezuela?”

“This is not just the stuff of Tom Clancy,” the two counseled, “these are scenarios we may have to one day face if we continue down our current path. None of them is palatable, and none is even guaranteed to work. Once the crisis occurs, it is already too late.”

“The economic and national security risks of our dependence on oil - and especially on foreign oil - have reached unprecedented levels. The threat is real and urgent, requiring immediate and sustained attention at the highest levels of government,” Gates said. “If we wait until a crisis occurs to act, the nation will have access to few, if any, effective short-term remedies. To protect ourselves, we must transcend the narrow interests that have historically stood in the way of a coherent oil security strategy and implement policies that will meaningfully address both the supply and demand aspects of our current oil dilemma.”

Gates said it’s his fervent wish that “those who read [the Oil Shockwave simulation] report will join the effort to reduce America’s oil vulnerability.”

In late July, famed Texas oilman T. Boone Pickens warned the Senate Committee on Homeland Security and Governmental Affairs that the most important threat to US security is the nation’s “escalating dependence on foreign oil” from geopolitically unstable countries and its consequent vulnerability to disruption by terrorists.

“It is a clear and growing threat to our national security,” Pickens sternly cautioned, noting that “most of the money that the world pays for oil goes into the hands of countries that are not our reliable allies. And some of that money is used right back against us in the War on Terror. And so, we are funding the people who are trying to wreak havoc on this country.”

Gal Luft, executive director of the independent Institute for the Analysis of Global Security (IAGS), a non-profit public educational organization focusing on energy security, put the problem in a bit harsher light for the Committee: “Ten years ago, Usama bin Laden set a target price for oil at $144 a barrel. At the time, crude oil prices stood at $12 a barrel and his figure, aimed to compensate the Muslims for what he called ‘the biggest theft in the history of the world,’ sounded delusional."

But "four years ago, just prior to the US elections, when oil prices stood at $38," Luft said, "bin Laden explained his economic warfare strategy: ‘We bled Russia for ten years until it went bankrupt and forced to withdraw in defeat. We are continuing the same policy to make America bleed profusely to the point of bankruptcy.’ ”

Echoing Pickens and many other security authorities, Luft said the US is spending billions more for imported oil than it is on homeland and national defense.

“And much of that money will flow into the coffers of those who wish us ill,” he said. “It has long been clear that our oil dependence forces us to pay for both sides of the war on terrorism,” but today “we are paying the other side more than we invest in our own defense.”

According to a study by the National Defense Council Foundation, as the cost of oil rises, the non-democratic governments of Middle East oil-producing nations increase their oil revenues “dramatically to the detriment of our national security,” Luft explained.

While Pickens, Luft, and other experts admit that America cannot drill its way out of the world’s energy crisis, they stress that it also cannot afford not to continue to pump as much Black Gold from beneath its territory as possible as a bridge to bringing alternative energy sources online, be they wind, solar, tidal, geothermal, nuclear, or something not yet discovered.

Secure supplies of oil for America are more crucial today than they’ve ever been, because both territorial and internal security is more precarious than it’s ever been. Any impairment in domestic supplies either as a result of shortages from disruptions in crude shipments, reductions in domestic production, or a terrorist attack on the continent’s most important market storage and distribution complex in Oklahoma (which HSToday.us earlier investigated), will have an impact on national defense and homeland security unlike anything the nation has confronted.

Political ideologues like House Speaker Nancy Pelosi who want to keep easily producible domestic oil reserves off limits because preventing new oil production is all about "saving the planet," are out of touch with the panoply of domestic security problems that will roil the federal government overnight from an abrupt disruption of foreign imports, security realists say.

Keeping known domestic reserves out of production, coupled to having no plan to deal with a catastrophic interruption, is forcing the US to compete for static global oil resources the competition for which will inevitably become increasingly hostile and, potentially more immediately threatening to the planet and its inhabitants, the security pragmatists point out.

In the event of a substantial decrease or complete shut down of America’s daily crude needs, the country will be reliant on immediately accessible internal and North American stockpiles and on-going domestic production, especially for territorial and homeland security purposes. This would likely involve the removal of unprecedented quantities of oil and fuels from the commercial marketplace, resulting in unprecedented civil unrest.

Even today, with fuel prices manageable for the majority, there is a depressed economic strata of society that cannot afford gas. Consequently, some have resorted to stealing fuel where ever and however they can. An illegal black market for gasoline has emerged that involves organized criminals who’ve engineered a variety of sophisticated methods for stealing large volumes of petrol in one fell swoop.

Should America suddenly be cut off from imported oil, some functions of the Department of Homeland Security like border and coastal patrolling, airport, and vital infrastructure security - not to mention policing by state and local law enforcement - will likely be curtailed, at least in the beginning, DHS and other officials told HSToday.us on background.

“This is a scenario we’re very aware of and have been looking into,” a DHS official hesitantly said, conceding, however, that the department does not have an overarching oil and fuel security contingency plan in the event of a sudden disruption of imports like the one “that’s been played out in Oil Shockwave.”

“If something were to happen tomorrow, we’d be scrambling,” the official said. “We’d be in line with the Defense Department and critical infrastructure needs - like you're local police and EMS. You want a mental picture; think of [the movies] "Escape From New York" and "Mad Max" and you've got a pretty good picture of what it's going to be like!"

If the crude spigot was turned off tomorrow, the US would have roughly 800 million barrels – perhaps a little more – in storage, maybe 10 to 50 million barrels in distribution pipelines, and what ever is in tankers in ports waiting to be unloaded. Already refined fuel would be what's in the ground at gas stations, in fuel distribution depots and fuel tanker trucks.

Potentially calamitous disruptions like those played out in Oil Shockwave simulations are possible because of the accelerating vulnerability of imported crude at a time when demand exceeds supply. OPEC today produces almost as much oil as it did 35 years ago, yet global demand has nearly doubled. This not only fosters hastened and dangerous superpowers competition, but it also makes an ideal target for jihad terrorist organizations like Al Qaeda, which has vowed to attack crude shipments to the West - notably to America - as a way to wreck its economy and disrupt its oil dependent infidel society.

According to data from the Energy Information Administration for domestic crude production, current annual production is about exactly the same as it was 60 years ago when the US produced more than it used.

Twenty-five years ago, more than half of the crude used by the US was produced domestically. Today, it's 25 percent, a 47 percent decline since 1970, largely attributable to legislative blockades to domestic production.

The US consumes a quarter of the world's oil, or 21 million barrels a day. By 2030, oil demand in the US is expected to grow by 30 percent - 27 million barrels per day.

"We have a long way to go to regain what has been lost over the last 30 years," said Alex Mills, president of the Texas Alliance of Energy Producers.

But until the US comes up with a realistic oil security contingency plan, it will continue to be a hair trigger away from a debilitating shortage, growing vulnerability, and weakened law enforcement and first responders.

Fortunately, the US and North America have substantial oil and natural gas reserves. Reserves that will become increasingly important as the bulk of the imported oil the US now relies on is put at greater and greater risk to disruption.

And as the volatility of this imported oil reaches critical mass and threatens homeland and national security functions, it will become incumbent upon the nation to begin to produce as much untapped domestic and North American reserves as is possible, authorities agree.

Just increasing domestic production by ten percent would go a long way to improving national oil security, said Michael Economides, a professor of engineering at the University of Houston in his keynote address to the 16th annual Williston Basin Petroleum Conference.

Ten Senate Republicans recently stressed the national security importance of domestic reserves in a letter to President Bush urging him to issue an executive order mandating the US Geological Survey conduct a seismic survey of the reserves beneath the 1.5 million acre Arctic National Wildlife Refuge (ANWR).

"In times of fragile national security and economy, an accurate assessment of American energy resources is fundamental to the national interest," the letter states.

Yet, despite the clear and present danger to US security from a disruption of oil shipments, a majority in Congress are pursuing legislation and policies energy and security experts caution would decrease domestic production and amplify the nation’s reliance on increasingly unstable imported oil.

Among the various proposals to reduce fuel prices includes the pumping of up to 100 million barrels out of the Strategic Petroleum Reserve (SPR) and into the world oil market. Ultimately, though, this will do nothing more than temporarily lower gas prices.

Presumptive Democratic presidential candidate Barack Obama, who supports releasing oil from the SPR, acknowledged that it will only temporarily drive down gas prices, but his energy policy director, Heather Zichal, argued that  “the … Strategic Petroleum Reserve is there for [the] purpose to help Americans in times of [economic] crisis.”

Not true. The SPR was created to be an emergency repository in the event of a significant disruption of imported oil, not to relieve consumers from rising fuel prices and short-term political benefits for politicians - from either political party.

While the few times that crude has been sold from the 727 million barrel-capacity strategic reserve has resulted in a subsequent small drop in oil prices, the sell off ultimately was ordered in response to oil supply disruptions, which is what the SPR was designed for.

A little less than half of the eoughly 700 million barrels now in the SPR is “sweet” crude, according to the Department of Energy (DOE). And “you want to have light, sweet crude in the reserve for big emergencies," Sarah Emerson, managing director of Energy Security Analysis Inc., told Reuters, explaining that "a lot of refiners can take that and make diesel and gasoline quickly.”

"Everybody can use it right away. You don't have to be specially configured," added Rayola Dougher, senior economic advisor at the American Petroleum Institute (API). "So, if you're talking about taking a fourth of that out, that's conceivable it could have an impact" on the ability of the government to handle a supply problem, she said.

Brian Kennedy, spokesman for the Institute for Energy Research, said replacing the sweet crude Obama and the majority in Congress are in favor of siphoning off with dirtier “sour” crude fewer US refineries are able to use “doesn't make sense.”

The National Petrochemical and Refiners Association said the SPR should not be used "for anything other than a real supply emergency.”

Congress authorized the SPR in 1975 following the Arab oil embargo "to provide the President with a powerful response option should a disruption in commercial oil supplies threaten the US economy and to provide "a national defense fuel reserve."

The United States and 25 other nations that are members of the International Energy Agency agreed to maintain reserves of oil or petroleum products equaling 90 days of net imports and to release these reserves and reduce demand only during oil supply disruptions.

The Government Accountability Office (GAO) noted in 2006 that DOE "has added oil to the SPR in response to specific concerns about oil supply security. For example, when the Department of Energy acquired oil for the SPR after the Arab oil embargo ... and the Iranian revolution in 1979, the goal was to rapidly create a reserve large enough to be useful in case of a severe oil supply disruption. During the mid- to late-1990s when oil prices were relatively low, there were no significant oil security concerns and little oil was added to the SPR."

Following the uncertainty created by the 9/11 terrorist attacks, oil once again began to be added to the SPR "to maximize long-term protection against oil supply disruptions."

The Bush administration has asserted that its policy to keep the SPR topped off is a fundamental national security undertaking that's absolutely necessary to being prepared for crude imports being shut off or restricted.

Nevertheless, lawmakers - assuring voters frustrated over high pump prices that shutting off deliveries to the SPR would cause gas prices to appreciably drop - passed legislation that required the administration to stop filling the SPR. In response, Bush ordered the halt to any more crude being deposited into the reserve through the rest of the year.

Some of the legislators ironically had voted in 2005 to direct the Secretary of Energy to fill the SPR to its authorized 1 billion barrel capacity,

Disruption threats also recently prompted European Union states to re-review their strategic oil reserves policy.

"The risk of supply disruptions is increasing. Supply is more and more concentrated in a handful of countries, many of which are exposed to high geopolitical risks," the European Commission stated earlier this year in a policy document asking EU member states, non-governmental organizations, and industry representatives to suggest how the bloc should deal with energy reserves in the future.

The EU's realistic stance comes as British North Sea production is declining, German oil and gas production has dropped ten percent, and Western Europe overall is nearly dependent on foreign oil and natural gas, a not insignificant amount of which Russia has effective physical control of.

Big picture national security experts and analysts say politicians must stop focusing only on temporarily bringing down fuel prices and begin addressing the realities of the long-term security problems posed by increasing reliance on foreign oil. They note that because these imports are progressively more susceptible to disruption, crude prices are only going to continue to fluctuate at above $100 a barrel – and potentially much, much higher depending on the severity of disruptions.

Irrespective of whether the production of fossil fuels has peaked, the demands of newly industrializing nations’ like China and India will only spur greater and greater competition for the black gold, and, as geopolitically volatile regimes and terrorism bring about tragic disruptions.

“In the years to come,” America’s “dependence on the Middle East” will become even more integrated into national security policy and consequent concerns about terrorism because this dependence “is projected to increase by leaps and bounds. The reason is that reserves outside of the Middle East are being depleted at a much faster rate than those in the region,” Luft explained.

Luft deftly warned the Senate Committee on Foreign Relations Subcommittee on Near Eastern and South Asian Affairs two years ago that “these projections require that we take a sober long term look at the impact of our growing dependence on our strategic posture in the Middle East.”

“As long as the US remains dependent on oil to the degree that it does today, its dependence on the Middle East will grow,” Luft warned.

An IAGS assessment concluded that this will require the US keeping an “increasing American military presence in the region to ensure our access to the remaining oil. This will mean further US embroilment in Middle East conflicts [and] more anti-American sentiment …”

“Oil security has traditionally been viewed in strictly military terms, mainly in regard to Western access to Middle Eastern supplies. The view has now taken hold that threats to the internal stability of countries in the region are as important,” wrote Etienne Swanepoel, a partner at Webber Wentzel, a leading South African law firm, in a recent op-ed.

“Some geopolitical strategists predict that failing states may become endemic across the greater Middle East in coming years. Their replacements are likely to be fiercely anti-Western. With increased demand in India and China, Western countries are likely to be regarded as less important consumers,” Swanepoel wrote. “Hence, from the Middle East's perspective, Western countries may become geopolitically less relevant … Large-scale failure across the region would affect 70 percent of the world's oil reserves.”

China, for example, is attempting to gain a foothold in the Middle East for long-term strategic crude supply agreements. China especially has its sights on Saudi Arabia, where a quarter of the world’s reserves come from, and which is the US’s biggest supplier of oil. Beijing already is the leading developer of oil reserves in Sudan, and currently possesses 40 percent of the African country’s local production, which amounts to six percent of China’s total oil consumption.

China’s growing pursuit of Middle East, African, and Pacific Rim crude will have profound security implications for the US, more so if the US is forced to increase its reliance on Gulf region oil.

Continuing, Swanepoel warned that “if prices were to recede to the levels of the past 25 years, regional instability would likely become institutionalized. If so, oil security would materially deteriorate, particularly considering concerns about short supplies in the future. Would such an outcome not be far worse than paying $100, or even $130, for a barrel of oil?”

In June, lawmakers passed a measure to include a National Intelligence Assessment on the strategic implications of high oil and energy prices for American security in the House Fiscal Year 2009 Intelligence Authorization bill.

The high-level intelligence analysis would assess “the national security implications of continued dependence on international energy supplies,” “the national security implications of potential use of energy resources as leverage against the United States by Venezuela, Iran, or other potential adversaries of the United States as a result of increased energy prices,” and “the likelihood that increased energy prices will directly or indirectly increase financial support for terrorist organizations.”

“This is intelligence the American people actually can use,” said House Intelligence Committee member, Rep. Pete Hoekstra. “The reality is our dependence on foreign oil and high energy prices are financing some of the national security threats against our nation. For the future of American security, we must focus on increasing domestic oil and energy production, conservation, and developing alternative sources of power.”

Editor's Note: Part Two of this series will appear in "The Kimery Report" next week and will investigate legislative proposals that would weaken domestic oil and gas production.