THE FUTURE
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dependent on foreign oil with no end in sight. For example, in 1970
the United States imported approximately one third of the daily oil
requirement. Currently, the amount of imported oil is two thirds of
the daily requirement. The congressional rhetoric of energy independence continues but meaningful suggestions of how to address
this issue remain few and far between. The economy of the United
States feeds on oil and the country consumes far more oil than it
can produce.
Generally, the concept of energy independence for the United
States runs contrary to the trend of the internationalization of trade.
The government of the United States continues to reduce trade
barriers through policies such as the North American Free Trade
Agreement (NAFTA), the elimination of tariffs, as well as other free
trade agreements. As a result, the percentage of the U.S. economy
that comes from international trade is steadily rising.
Increased world trade is beneficial both economically and politically insofar as it is supposed to help establish amicable relations
between countries. Through mutually beneficial exchange, a great
deal of this increased interrelationship will, in theory, establish
opportunities for personal ties that make military war or other
forms of military action less likely. However, there are also contrary
cases where countries acquire the means to be more destructive,
if they so choose, through expanded economic opportunities. This
type of argument has been used with regard to Iran.
Economic interdependence also makes the domestic economy
more susceptible to disruptions in distant and unstable regions
of the globe, such as the Middle East, South America, and Africa.
In fact, in many countries with proven reserves, oil production
could be shut down by wars, strikes, and other political events,
thus reducing the flow of oil to the world market. If these events
occurred repeatedly, or in many different locations, they could constrain exploration and production, resulting in a peak despite the
existence of proven oil reserves. Using a measure of political risk
that assesses the likelihood that events such as civil wars, coups,
and labor strikes will occur in a magnitude sufficient to reduce a
country's gross domestic product (GDP) growth rate over the next
5 years, four countries (Iran, Iraq, Nigeria, and Venezuela) possess
proven oil reserves greater than 10 billion barrels and which countries contain almost one-third of worldwide oil reserves, face high
levels of political risk. In fact, countries with medium or high levels
of political risk contain 63% of proven worldwide oil reserves.
265
dependent on foreign oil with no end in sight. For example, in 1970
the United States imported approximately one third of the daily oil
requirement. Currently, the amount of imported oil is two thirds of
the daily requirement. The congressional rhetoric of energy independence continues but meaningful suggestions of how to address
this issue remain few and far between. The economy of the United
States feeds on oil and the country consumes far more oil than it
can produce.
Generally, the concept of energy independence for the United
States runs contrary to the trend of the internationalization of trade.
The government of the United States continues to reduce trade
barriers through policies such as the North American Free Trade
Agreement (NAFTA), the elimination of tariffs, as well as other free
trade agreements. As a result, the percentage of the U.S. economy
that comes from international trade is steadily rising.
Increased world trade is beneficial both economically and politically insofar as it is supposed to help establish amicable relations
between countries. Through mutually beneficial exchange, a great
deal of this increased interrelationship will, in theory, establish
opportunities for personal ties that make military war or other
forms of military action less likely. However, there are also contrary
cases where countries acquire the means to be more destructive,
if they so choose, through expanded economic opportunities. This
type of argument has been used with regard to Iran.
Economic interdependence also makes the domestic economy
more susceptible to disruptions in distant and unstable regions
of the globe, such as the Middle East, South America, and Africa.
In fact, in many countries with proven reserves, oil production
could be shut down by wars, strikes, and other political events,
thus reducing the flow of oil to the world market. If these events
occurred repeatedly, or in many different locations, they could constrain exploration and production, resulting in a peak despite the
existence of proven oil reserves. Using a measure of political risk
that assesses the likelihood that events such as civil wars, coups,
and labor strikes will occur in a magnitude sufficient to reduce a
country's gross domestic product (GDP) growth rate over the next
5 years, four countries (Iran, Iraq, Nigeria, and Venezuela) possess
proven oil reserves greater than 10 billion barrels and which countries contain almost one-third of worldwide oil reserves, face high
levels of political risk. In fact, countries with medium or high levels
of political risk contain 63% of proven worldwide oil reserves.