WASHINGTON, D.C. — With the release of the 2011 edition of the U.S. Chamber’s Energy Institute Index of Energy Security Risk, there is now clear and compelling evidence that America is facing increasing threats to its energy security.
The Index, now in its second year, provides the first quantifiable measurement of energy security, based on 37 individual metrics in four primary areas—geopolitical, economic, reliability and environmental. For 2010, the energy security risk index score was 98.0—the fourth highest since 1970 and a 6.5 point increase from 2009’s revised score of 91.5.
“The Index of Energy Security Risk is a valuable tool which allows policymakers and the public to track our energy security based on objective, factual criteria,” said Karen Harbert, president and CEO of the Energy Institute. “Given the significant increase in energy security risk, the 2011 edition of the Index should send alarm bells through the halls of Congress and in the White House. Unless we take dramatic action to change the trajectory, America is headed toward an unprecedented level of sustained risk.”
The Index, which is updated annually, tracks changes in energy security risk beginning in 1970 and projects future risk through 2035. The 2011 edition of the Index incorporates the most current energy data from the U.S. Energy Information Administration and other federal agencies.
“As it turns out, last year’s decrease in energy security risk was short-lived,” said Stephen Eule, vice president at the Energy Institute. “As the economy picks up, the underlying weaknesses in our energy security posture are once again revealing themselves. In particular, higher energy prices and price volatility are contributed to increased risks. Development of domestic shale gas, however, is certainly a bright spot in an otherwise pretty gloomy outlook.”
Of the 37 metrics, 20 showed increased risk in 2010, 11 showed improvement, and six were unchanged. Eight of the top ten metrics showing the largest changes in score were related to energy prices, price volatility and expenditures.
In the future, the Index projects a sustained period of high risk all the way through 2035. These risks would be even higher if not for improvements made in energy efficiency, and the potential for shale gas to improve the security of natural gas supplies and lower energy costs.
“The Index clearly validates the recommendations that the Energy Institute has been making to the Administration, Congress, and the American people,” Harbert said. “We must maximize all of our domestic energy resources, make clean energy technologies more affordable, and eliminate regulatory barriers that are stalling urgently needed energy projects. Only by taking these actions will we reduce our energy risks and make the nation and economy more secure.”
The 2011 edition features some adjustments to the Index’s formula based on feedback from last year’s inaugural report. In addition, adjustments were made to some previous year’s scores based on updated data from government sources. Most notably, the 2009 score was adjusted from 83.7 to 91.5, largely because revised data that showed resurgence in high energy prices occurring more quickly than originally estimated.
The Index of Energy Security Risk includes an interactive web tool that allows users to explore each year’s data broken down by category. To read the full report, and learn more about how the Index was computed, visit the Chamber’s website. Highlights of the 2011 Index are available here.
The mission of the U.S. Chamber of Commerce’s Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.