U.S. CHAMBER OF COMMERCE

2012 Index of U.S. Energy Security Risk

2012 Index of U.S. Energy Security Risk

Table 1. U.S. Energy Security Risks from 1970 to 2011:
Highest, Lowest and 30-Year (1970-1999) Average Index Scores

Indexes of U.S Energy Security Risk 2011 Score 1980 Baseline Score Highest Risk Lowest Risk 30-Year Average Year (1970-1999)
Year Index Score Year Index Score
Total Composite Index 101.3 100 2011 101.3 1992 75.2 84.2
Sub-Indexes:
Geopolitical 101.6 100 2008 103.1 1998 73.0 83.2
Economic 102.1 100 2008 102.1 1998 61.4 73.8
Reliability 112.7 100 2011 112.7 1992 75.2 86.1
Environmental 101.3 100 1973 110.7 2009 87.7 99.3

Index of U.S. Energy Security Risk: 2011

Since falling nearly ten points in the recession year of 2009, U.S. energy security risks have risen for two years in a row. Following a 7.4 point rise in 2010, the overall index rose another 3.8 points in 2011 to a record high of 101.3. Before 2011, only the years 1980 and 2008 had scores in the triple digits. Since 2005, risk scores have been as high as, or higher than, they were during the "Arab oil embargo" and Iran revolution and hostage crisis of the mid 1970s to early 1980s.

Of the 37 metrics used in the Index, 13 showed an increase in risk in 2011, 21 showed a decrease in risk, and three showed no change. Even though the number of metrics showing increased risk was comparatively small, these metrics generally showed the largest changes in risk scores. Leading the way were the indexes for crude oil prices and oil and natural gas import expenditures, which jumped 31.1 points and 28.0 points, respectively. Even though crude price volatility was little changed from 2010, it was still very high, a mere 0.1 points off the record high.

While those metrics showing declining risk were more numerous, with one exception the changes also were more modest. Most of the energy use metrics, which have been showing generally steady progress over the years, continued to show improvement in 2011, especially productivity per mile traveled in the transportation sector.

The metric measuring the security of natural gas imports showed the largest improvement of all the metrics in 2011. Its risk score fell 31.3 points in 2011, and since 2007, scores for this metric have plunged 91.3 points, a dramatic turnaround. From just 2% of production in 2000, shale gas accounted for just over one-third of overall natural gas production in 2011. Before the shale gas revolution, projections were indicating greater volumes of natural gas imports. EIA’s most recent AEO 2012 projection, however, shows the United States becoming a net exporter of natural gas imports instead of an importer.

After increasing more than 3% in 2010, emissions of carbon dioxide from energy fell 2.4% in 2011 to a level about where they were in the mid-1990s, leading to a 17.4 point drop in the risk index for total carbon dioxide emissions from energy.

Though there was some fuel switching, most of this decrease is related to improvements in the energy intensity of the economy and relatively mild weather in 2011, which lowered the demand for electricity and some fuels.

The electric power sector improved in two areas in 2011. The diversity of electricity generating capacity increased with the addition of renewable capacity, primarily wind, and capacity margins increased. As a result, the risk index scores for capacity diversity fell by 8.3 points while that for capacity margins fell by 13.0 points.