Energy security is the ability of households, businesses, and government to accommodate disruptions in supply in energy markets. This survey considers the economic dimensions of energy security and political and other noneconomic security concerns and discusses policy approaches that could enhance US energy security. A number of points emerge. First, energy security is enhanced by reducing consumption, not imports. A policy to eliminate oil imports, for example, will not enhance US energy security, whereas policies to reduce energy consumption can improve energy security. Second, energy security is distinct from considerations of energy externalities. Energy security taxes are appealing on political grounds but are more difficult to justify on economic grounds. Finally, the contrasting concerns over energy security between policy makers and economists are striking. The article notes some possible reasons for these differing views and suggests possible research opportunities in this area.


Article metrics loading...

Loading full text...

Full text loading...


Literature Cited

  1. Adelman MA. 1980. The clumsy cartel. Energy J. 1:43–52 [Google Scholar]
  2. Alam MM. 2013. Coping with blackouts: power outages and firm choices. Work. Pap., Dep. Econ., Yale Univ. https://sites.google.com/site/muneezamalam/research
  3. Alcott H, Collard-Wexler A, O'Connell SD. 2014. How do electricity shortages affect productivity? Evidence from India. NBER Work. Pap. 19977
  4. Alhajji AF, Huettner D. 2000. OPEC and world crude oil markets from 1973 to 1994: cartel, oligopoly, or competitive?. Energy J. 21:31–60 [Google Scholar]
  5. Anderson CW, Santos JR, Haimes YY. 2007. A risk-based input-output methodology for measuring the effects of the August 2003 Northeast blackout. Econ. Syst. Res. 19:183–204 [Google Scholar]
  6. Anderson PL, Geckil IK. 2003. Northeast blackout likely to reduce US earnings by $6.4 billion. Work. Pap. 2003-2, Anderson Econ. Group, Lansing, Mich
  7. Andrews A, Pirog R. 2012. The strategic petroleum reserve: authorization, operation, and drawdown policy. Rep. R42460, Congr. Res. Serv., Washington, DC
  8. Bohi DR, Toman MA. 1993. Energy security: externalities and policies. Energy Policy 21::1093–109 [Google Scholar]
  9. BP 2013. BP statistical review of world energy June 2013. bp.com/statisticalreview
  10. Broadman HG, Hogan WW. 1988. The numbers say yes. Energy J. 9:7–30 [Google Scholar]
  11. Bureau of Economic Analysis (BEA) 2013. Fixed assets. http://bea.gov/iTable/index_FA.cfm
  12. Coase R. 1960. The problem of social cost. J. Law Econ. 3:1–44 [Google Scholar]
  13. Congressional Budget Office (CBO) 2012. Energy Security in the United States. Washington, DC: CBO
  14. Considine TJ. 2006. Is the strategic petroleum reserve our ace in the hole?. Energy J. 27:91–112 [Google Scholar]
  15. Department of Homeland Security 2012. ICS-CERT Monthly Monitor. Washington, DC: Dep. Homel. Secur
  16. Departments of Homeland Security and Energy 2010. Energy Sector-Specific Plan: an annex to the National Infrastructure Protection Plan. Rep., Dep. Homel. Secur./Energy, Washington, DC
  17. Deutch J, Schlesinger J. 2006. National security consequences of US oil dependency. Task Force Rep. 58, Counc. Foreign Relat., Washington, DC
  18. DiSavino S. 2013. Ten years after NE blackout, US power grid smarter, sturdier. Reuters, Aug. 12. http://www.reuters.com/article/2013/08/12/blackout-anniversary-idUSL2N0GD00V20130812
  19. Energy Information Administration 2013a. Cushing, OK WTI spot price FOB. http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=RWTC&f=D
  20. Energy Information Administration 2013b. Monthly energy review, November 2013. Rep., Energy Inf. Admin. http://www.eia.gov/totalenergy/data/monthly/archive/00351311.pdf
  21. Fisher-Vanden K, Mansur ET, Wang Q. 2012. Costly blackouts? Measuring productivity and environmental effects of electricity shortages. NBER Work. Pap. 17741
  22. Gillingham K, Newell RG, Palmer K. 2009. Energy efficiency economics and policy. Annu. Rev. Resour. Econ. 1:597–619 [Google Scholar]
  23. Hamilton JD. 2008. Oil and the macroeconomy. The New Palgrave Dictionary of Economics Online Durlauf SN, Blume LE. Basingstoke, UK: Palgrave Macmillan http://www.dictionaryofeconomics.com/dictionary [Google Scholar]
  24. Hamilton JD. 2009. Causes and consequences of the oil shock of 2007–08. Brookings Pap. Econ. Act. 2009:215–83 [Google Scholar]
  25. Hayashi M, Hughes L. 2013. The policy responses to the Fukushima nuclear accident and their effect on Japanese energy security. Energy Policy 59:86–101 [Google Scholar]
  26. Holt M, Andrews A. 2012. Nuclear power plant security and vulnerabilities. Rep. RL34331, Congr. Res. Serv., Washington, DC
  27. International Energy Agency (IEA) 2013. Energy Prices and Taxes, Third Quarter 2013. Paris: IEA
  28. ISO New England 2013. 2013 Regional Electricity Outlook. Holyoke, MA: ISO-NE
  29. Joskow P, Tirole J. 2005. Merchant transmission investment. J. Ind. Econ. 53:233–64 [Google Scholar]
  30. Kennedy B. 2014.Ukraine's crisis highlights Europe's dependence on Russian energy. CBS MoneyWatch, March 4. http://www.cbsnews.com/news/does-russian-oil-trump-possible-european-sanctions/, accessed May 19, 2014
  31. Kilian L. 2008. The economic effects of energy price shocks. J. Econ. Lit. 46:871–909 [Google Scholar]
  32. Kilian L. 2009. Not all oil price shocks are alike: disentangling demand and supply shocks in the crude oil market. Am. Econ. Rev. 99:1053–69 [Google Scholar]
  33. Kobayashi BH. 2005. An economic analysis of the private and social costs of the provision of cybersecurity and other public security goods. Rep. 05-11, George Mason Univ. Sch. Law
  34. Leahy E, Devitt C, Lyons S, Tol RSJ. 2012. The cost of natural gas shortages in Ireland. Energy Policy 46:153–69 [Google Scholar]
  35. McPhail LL, Babcock BA. 2012. Impact of US biofuel policy on US corn and gasoline price variability. Energy 37:505–13 [Google Scholar]
  36. Mercatus Energy Advisors 2012. The state of airline fuel hedging & risk management in 2012. Rep., Mercatus Energy Advis., Houston, Tex.
  37. Metcalf GE. 2006. Energy conservation in the United States: understanding its role in climate policy. Rep. 138, Joint Progr. Sci. Policy Glob. Change, MIT, Cambridge, Mass
  38. Metcalf GE. 2007. Federal tax policy toward energy. Tax Policy Econ. 21:145–84 [Google Scholar]
  39. Metcalf GE. 2008. An empirical analysis of energy intensity and its determinants at the state level. Energy J. 29:1–26 [Google Scholar]
  40. Metcalf GE. 2010a. Financing a national transmission grid: What are the issues? Rep. CEPE-5, Manhattan Inst., New York
  41. Metcalf GE. 2010b. Investment in energy infrastructure and the tax code. Tax Policy Econ. 24:1–33 [Google Scholar]
  42. Nakano J. 2013. Japan gears up its quest for the “best energy mix.” Comment., Cent. Strateg. Int. Stud., Washington, DC
  43. National Research Council 2009. Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use Washington, DC: Natl. Acad. Press [Google Scholar]
  44. Nixon R. 1973. Address to the nation about policies to deal with the energy shortages. American Presidency Project Wolley J, Peters G. http://www.presidency.ucsb.edu/ws/index.php?pid=4034&st=&st1=#axzz2iAXThp4e [Google Scholar]
  45. Nordhaus WD. 2007. Who's afraid of a big bad oil shock?. Brookings Pap. Econ. Act. 2007:219–38 [Google Scholar]
  46. North American Electric Reliability Council (NERC) 2012. 2012 Long-Term Reliability Assessment. Atlanta, GA: NERC
  47. Nuclear Regulatory Commission 2009. Protection of digital computer and communications systems and networks. 10 CFR § 73.54
  48. Office of the President 2003. Critical infrastructure identification, prioritization, and protection. Homel. Secur. Pres. Dir. 7, Off. Fed. Reg.,Washington, DC
  49. Office of the President 2013. Critical infrastructure security and resilience. Pres. Policy Dir. 21, Off. Press Secr., White House, Washington, DC
  50. Pan I. 2013. WTI spread to Brent crude reaches widest level since June. Market Realist, Oct. 16
  51. Parfomak PW, Vann A. 2009. Liquefied natural gas (LNG) import terminals: siting, safety, and regulation. Rep. RL32205, Congr. Res. Serv., Washington, DC
  52. Pigou AC. 1932. The Economics of Welfare London: Macmillan [Google Scholar]
  53. Ratner M, Belkin P, Nichol J, Woehrel S. 2013. Europe's energy security: options and challenges to natural gas supply diversification. Rep. R42405, Congr. Res. Serv., Washington, DC
  54. Schurr SH, Netschert BC. 1960. Energy in the American Economy, 1850–1975 Baltimore, MD: Johns Hopkins Univ. Press [Google Scholar]
  55. Smith JL. 2009. World oil: market or mayhem?. J. Econ. Perspect. 23:145–64 [Google Scholar]
  56. Sovacool BK. 2011. Evaluating energy security in the Asia Pacific: towards a more comprehensive approach. Energy Policy 39:7472–79 [Google Scholar]
  57. Sovacool BK. 2013. An international assessment of energy security performance. Ecol. Econ. 88:148–58 [Google Scholar]
  58. Sovacool BK, Mukherjee I. 2011. Conceptualizing and measuring energy security: a synthesized approach. Energy 36:5343–55 [Google Scholar]
  59. Toman MA. 1993. The economics of energy security: theory, evidence, policy. Handbook of Natural Resource and Energy Economics Kneese AV, Sweeney JL. 1167–218 Amsterdam: Elsevier [Google Scholar]
  60. Yergin D. 2006. Ensuring energy security. Foreign Aff 85:269–82 [Google Scholar]

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error