WASHINGTON, D.C.— The 2014 edition of the U.S. Chamber of Commerce’s Institute for 21st Century Energy’s Index of U.S. Energy Security Risk continues to show positive trends for America’s energy security—thanks largely to increased oil and gas production—but warning signs remain. This year’s index is the fifth annual edition of the Energy Institute’s groundbreaking tool, which tracks 37 individual metrics in four primary areas from 1970-2014. As the index shows, America’s energy security risk dropped to 87.4 in 2013—the first time the score has been below 90 since 2004, and a 5 percent reduction in risk from 2012. “Much of America’s improved energy security over the past year can be attributed to increased oil and gas development, particularly from unconventional sources,” said Karen Harbert, president and CEO of the Energy Institute. “Given continued geopolitical uncertainty, rising U.S. oil and gas output couldn’t come at a better time, and has helped insulate our nation from instability. Yet, over the long term, there is still the potential for big risks, especially from the continued forced reduction of coal, which threatens America’s electricity reliability and diversity.” Of the 37 metrics studied in the report, 14 showed a decreased risk of 1 percent or more, 10 showed an increased risk of 1 percent or more, and 11 stayed the same as 2013 numbers. In particular, rapidly expanding oil and natural gas output drove large improvements in metrics related to energy expenditures, price volatility, and imports. The sub-indexes measuring geopolitical, economic, and reliability risks also showed improvement while the sub-index for environment remained essentially unchanged. Looking forward to 2040, the index shows rising risks related to crude oil prices and electricity reliability and diversity. For those reasons, after a continued period of declining risk over the next few years, risks will begin to climb again after 2018. “Our index found that risks related to electricity generation diversity will rise to an all-time high by 2040, due largely to planned federal regulations targeting coal plants,” said Steve Eule, vice president at the Energy Institute. “These concerns have recently been echoed by the North American Electric Reliability Corporation and by various states that are looking at EPA compliance issues and should sound alarm bells for policymakers as they consider regulatory proposals.” New in this year’s index is a “Side Case” section that examines 20 different representative scenarios from the Energy Information Administration’s Annual Energy Outlook, including scenarios covering oil and gas resources, electricity demand, carbon pricing, and accelerated closure of existing plants, among others. The Energy Institute input this data into the Energy Security Risk Index, and is able to demonstrate for each policy scenario the change in energy security risk between now and 2040, as well as its economic impact. The Index of Energy Security Risk also includes an interactive web tool that allows users to explore each year's data broken down by category. The full report and more information about how the index was computed 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.