US Solution to Oil Crisis Simulation: Drill More

Oil burning in the Gulf of Mexico, 2010. Oil ShockWave focuses on when the US should tap emergency reserves. As the war gamers repeatedly noted, American leaders have been talking about weaning the nation off oil since the days of Richard Nixon. (Photo: Ann Heisenfelt/EPA)

US Solution to Oil Crisis Simulation: Drill More

Former White House officials take part in Oil ShockWave war game to determine US response to a terrorist attack on Saudi oil supplies

November 17, 2011: A helicopter gunship attack, possibly by al-Qaida militants, has disabled the world's largest crude processing facility in Saudi Arabia, turning the sky a bright fiery orange and knocking out a significant chunk of global oil supply.

In Washington, the national security team assembles to advise the president on how best to reassure the public and stop the US sliding back into recession. Their solution? Drill more American oil.

One month on, the crisis intensifies. Iran and Venezuela threaten to choke off oil supplies, pushing oil prices to $200 a barrel. The reaction once again: drill more American oil.

Oil ShockWave, a crisis war game, which took place on Wednesday in the Ritz-Carlton ballroom about a mile from the real White House, included George Bush's former national security adviser, a former Carter administration official and former Shell chief executive . Playing fictional cabinet officials, they acknowledged America had become hostage to its need for oil - and yet they couldn't quite seem to break away.

"We are reaping the harvest of our dependence on petroleum and the fact that the countries that produce it are either unstable or hostile to our interests," lamented Stephen Hadley, who reprised his real-life role as Bush's national security adviser. "How did we let this happen when we've known we've been dependent on oil for 20 years?"

As the scenario played out in front of over-sized monitors tuned to a fictional cable news network, the answer became abundantly clear.

The war games, sponsored by a campaign group, Securing America's Energy Future, have become a Washington fixture.

None of the participants were briefed on the war games in advance, the organisers said.

It staged the first simulation in 2005, hoping to push the White House and Congress to take strong action on energy reform. The group, which has links to Fed-Ex, is pushing for electrification of vehicles but also expanded US oil production in the short-term.

As the war gamers repeatedly noted, American leaders have been talking about weaning the nation off oil since the days of Richard Nixon.

"We have met the enemy and he is us," said Susan Schwab, a US trade representative under Bush who played an economic adviser for the war games.

Stuart Eizenstat, a former Carter and Clinton administration official who was playing treasury secretary, said he felt like he was in a bad reality show.

Immediately after the first shock, the attack on the fictional refinery, security and economic concerns crowded out ideas of moving beyond oil. Was Iran involved? Was this just the first of a run of attacks? Would America need to dip into its strategic reserves?

The fictional energy secretary, played by the former Shell chief executive, John Hofmeister, gave assurances about US domestic supply. Nobody called for an accelerated transition to renewable energies. Nobody mentioned climate change.

"The most powerful message that we have is that the United States of America has more oil than any other country in the world that we know of. We have simply been holding ourselves back from producing that oil," said Hofmeister. "I think it is time to really get the message to Congress that it is time to start producing."

Schwab thought the answer was importing more oil from Canada's tar sands.

Hadley split the difference. "Medium term, there is oil. We need to get it out of the ground. Longer term we need to diversify," he said.

But the escalating crisis, with the threats from Iran and Venezuela, forced a rethink. Without bold action, the president - who was not named for the exercise - would lose the next election, warned Ari Fleischer, who served as White House press secretary under Bush.

"The president has to do something bold. He has a real challenge to his leadership," Fleischer said.

"He either has to announce we are going to open up America to take every tract of land that was previously closed and open it up for drilling, or make America green and go in the direction of wind and solar," he said. "Anything else is just doodling in the margins of history. We need to put the president on track for something big."

In the end, however, Hadley opted for mid-size, or both, as he called it: open up new areas for oil drilling and promote new fuel saving technologies like electric cars. Doing both things at once could count as boldness, Hadley reasoned.

As a strategy it seemed suspiciously close to that Barack Obama has pursued for the last year or so: pushing for renewable energy, but steadily opening up new areas for drilling.

But would that work in an actual moment of crisis? Almost certainly not, Fleischer admitted afterwards. "Going for the middle won't work from the communications point of view. It doesn't motivate," he said. Crises require bold inspiring measures.

So where did that leave Obama, in a tough place admittedly, but not facing a cut-off in the global oil supply. Was this the right time to go bold and go green?

Not yet, said Fleischer. That would have to wait for a full-fledged crisis. Until then, Obama would have to continue his balancing act - and Fleischer didn't rate his prospects. "I think a lot of environmental issues are like religion. People have faith in their solution and they won't move in the other direction."

Democrats were unlikely to ever be enthusiastic about Obama's plans to open up new areas for drilling. As for Fleischer's fellow Republicans, he said: "I just don't think they are going to go for a solution that involves government" .

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