It will come as a shock to most, but no U.S. presidential candidate—nor any agency at local, state or federal level, has developed a contingency plan in the event of a protracted oil cut-off. It is not even being discussed. Government agencies and officials in the U.S. have prepared for hurricanes, anthrax, terrorism, and every other disaster, but not the one threatened daily—a protracted oil stoppage, whether caused by terrorism, Iranian intervention in the Persian Gulf.
It is like seeing a hurricane developing without a disaster plan or evacuation route. America’s allies have oil shortage interruption contingency plans, but the U.S. does not.
The crude realities: America uses approximately 19 to 20 million barrels of oil per day, almost half of which is imported. If the US loses just 1 million barrels per day, or suffers the type of damage sustained from Hurricane Katrina, the government will open the Strategic Petroleum Reserve, which offers a mere 6 to 8 week supply of unrefined crude oil. If the U.S. loses 1.5 million barrels per day, or approximately 7.5 percent, Washington will ask our allies in the 28-member International Energy Agency to open their SPRs and otherwise assist. If the U.S. loses lose 2 million barrels per day, or ten percent for a protracted period of time, government crisis monitors say the chaos will be so catastrophic they cannot even model it. One government oil crisis source told me, “We cannot put a price tag on it. If it happens, just cash in your 401k.”
Exactly how could America be subjected to a protracted oil interruption, that is, a 10 percent shortfall lasting longer than several weeks? It will not come from hurricane action in the Gulf of Mexico, or even major refinery accidents or other oil infrastructure damage. Such damage would be repaired within days and the temporary losses absorbed by the half million barrel per day global cushion available.
However, if one, two, or all of three of the vital chokepoints are hit by terrorists flying hijacked jumbo jets or shut down by Iranian military action—the Abqaiq processing plant in eastern Saudi Arabia, the Ras Tanura terminal on the Saudi Arabian coast, or the two-mile per sea lane Strait of Hormuz—as much as 40 percent of all seaborne oil will be stopped, as much as 18 percent of all global supply will be interrupted, and more than 10 percent of the U.S. supply will be cut off. Estimates on the U.S. shortfall suggest the percentage lost could be far higher. Repeat attacks, and the difficulty of anti-mine operations in a hostile environment, could prolong the crisis for many months—which is exactly what Al Qaeda and the Iranian regime have promised. Yet there is no government plan.
The best experts predict that if we suffer as much as a ten percent shortfall for any period of time, let alone twenty percent, it will be a neighbor-against-neighbor “Mad Max scenario” as food shortages swell and a storm of economic collapse surges across the country. Indeed, experts have been warning about this looming calamity for years. But the U.S. government and its presidential candidates refuse to even consider the possibility or develop a contingency plan. Even if a secret plan exists, who would execute such a monumental undertaking? No one knows about it.
Yet American allies have developed oil contingency legislation and other administrative plans that will permit their nations to survive a stoppage. These measures include severe vehicle traffic reductions, enabling fast alternative fuel production, mass vehicle fuel retrofitting, as well as rush public transit enhancement and mandated changes in driving habits. Unquestionably, for America to survive such a catastrophe will require a very painful, multi-layered program of immediate-term, short-term, mid-term and long-term fixes that will change American society and transform it off oil. Currently, the U.S. has no real alternative fuel delivery or retrofitting infrastructure. Lawmakers, mayors, governors, and candidates have not developed such a plan during the half decade the interruption has been looming.
The notion that Saudi Arabia can make up the shortfall from an Iranian disruption is impossible. Saudi oil disembarks from Ras Tanura and it too must pass through the narrow two-mile wide sea lanes of the Strait. The trans-Arabian Petroline that terminates at Yanbu can carry only a few million barrels per day, and a rush project to double its capacity would require an estimated $600 million and some two years of construction and chemical changes; this pre-supposes Iran would not simply attack the line with a barrage of medium range missiles from its Red Sea forward ports.
For America to have prepared intelligently for a Persian Gulf oil interruption would have required a decade of planning. To absorb the hit from a sudden oil stoppage as is now once again threatened, will be very painful indeed.