Office of Policy

Valuation of Energy Security for the United States

January 19, 2017

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Energy Security

For the last 40 years, energy security in the United States has focused on decreasing the Nation’s dependence on foreign oil. Policies have promoted the production of domestic oil resources, maintenance of the world’s largest strategic oil reserve, increased vehicle fuel efficiency standards, and a host of other oil-related actions and policies. The United States is now the world’s largest producer of crude oil and other liquids, and the largest producer of refined petroleum products. A net exporter of refined products and, for the first time in decades, the United States now produces more oil than it imports. In addition, the United States has become the world’s largest producer of natural gas. The dramatic growth in gas production has lowered U.S. natural gas prices and allowed the United States to begin exporting liquefied natural gas (LNG), which has increased the competitiveness and transparency of international LNG markets.

Meanwhile, the global economy has experienced a period of unique transformation. Energy security concerns facing the United States have evolved to encompass oil, natural gas, and electricity and have become significantly more complex. The world’s population has grown by almost 20 percent in the last 15 years alone, while global GDP grew by 120 percent.  In many parts of the world, mechanical and analog systems traditionally energized by oil-products, are being replaced with automated and networked systems that run on electricity. As a result, the number of devices connected to the Internet worldwide has grown from 400 million in 2001 to 25 billion in 2015. These changes have made electricity and natural gas, in addition to oil, key enablers of many facets of society and ensured that the modern world is completely dependent on energy.

In today’s connected world, threats that are intended to disrupt the energy systems and markets in one country can affect multiple countries, regions, and the global economy. Thus, energy security concerns now include fuel supply chains; electricity generation, transmission, and distribution; the functioning of energy markets; and the ability of the energy system to withstand shocks and disruptions. To effectively ensure energy security for the United States, a host of factors must be considered from both domestic and international perspectives, including: ensuring domestic access to energy, securing the electric grid, encouraging the development of global markets, and supporting alliances and partnerships that strengthen energy security.  

Report to Congress

Fully incorporating this new definition of energy security into policymaking requires that appropriate measures be adopted to allow the Federal Government to value energy security contributions. Building from the G-7’s seven principles, the Fixing America’s Surface Transportation (FAST) Act (Pub. L. No. 114-94, § 61005 (Dec. 4, 2015)) requires the Secretary of Energy, in collaboration with the Secretary of State, to develop a report that will do the following:

  • Evaluate and define United States energy security to reflect modern domestic and global energy markets and the collective needs of the United States and its allies and partners;
  • Identify transparent and uniform or coordinated procedures and criteria to ensure that energy-related actions that significantly affect the supply, distribution, or use of energy are evaluated with respect to their potential impact on energy security, including their impact on:
    • Consumers and the economy;
    • Energy supply diversity and resiliency;
    • Well-functioning and competitive energy markets;
    • United States trade balance; and
    • National security objectives; and
  • Include a recommended implementation strategy that identifies and aims to ensure that the procedures and criteria referred to in [the above bulleted point] are:
    • Evaluated consistently across the Federal Government; and
    • Weighed appropriately and balanced with environmental considerations required by Federal law.

This report presents an analysis of how energy-related policies and actions are valued, both qualitatively and quantitatively, with respect to their effect on energy security. The report does not attempt to assess the extent to which the United States and our allies and partners are energy secure, although it points out several instances where recent developments and policies have contributed to improved energy security. Instead, this report suggests how the United States can consistently value the benefits of policies and actions that increase energy security. This helps establish a baseline for future efforts to develop energy security implementation strategies related to the aforementioned categories. The report considers both the domestic and collective aspects of energy security. 

Download the Valuation of Energy Security for the United States Report