During the World War II era, America imported roughly one percent of its oil. Our nation's domestic oil bounty sufficiently fueled our military prowess, and that of our allies, as it vanquished the enemies of freedom in two separate theaters.
While America's military remains the envy of the world today, our energy security has weakened. America now imports 50% of its crude requirements and faces an oil dependence crisis that threatens both our national security and our economy.
Despite America's record-level production of oil, which is pushing imports lower and should be encouraged and expanded, our transportation sector's near-full reliance on this single fuel leaves our nation vulnerable to high and volatile prices. Annually, Americans sustain a direct transfer of wealth, in excess of $300 billion, to pay other nations for our oil dependence. To make matters worse, the global market that sets these prices is not a free market-rather, it is manipulated by foreign, state-owned corporations in countries whose values differ markedly from our own.
National oil companies, many within the Organization of the Petroleum Exporting Countries (OPEC), own more than 80% of the world's oil reserves. While energy companies in free societies, such as the United States, answer to shareholders and boards of directors, these national companies ultimately answer to their government leadership. These leaders, be they kings, dictators, religious zealots, etc., guard their ownership of oil carefully and use it as a political tool to maintain control and as a powerful weapon to implement foreign policy.
The OPEC oil embargo of 1973 is a perfect example of this principle. Leaders of major oil producing countries in the Middle East acknowledged that they could not influence American policy with rational thought. What they could do, however, was take advantage of our economic vulnerabilities and our total dependence on oil. In this style of combat, their weapon of choice was obvious: they used their oil supplies to bludgeon the U.S., triggering rationing and shortages of gasoline for Americans. And in 1973 we imported only 26% of our national crude oil requirement; almost half the amount that we import today.
Without action to reduce our dependence on oil, the United States will remain vulnerable to oil supply shocks, high oil prices, and the events and forces that cause them. Mitigating this vulnerability will require both supply and demand-side policies. We must take advantage of America's shale oil and gas bonanza in order to grow jobs, improve the efficiency of our energy consumption, and diversify the fuel sources of our transportation sector.Reducing overreliance on oil as the transportation sector's primary fuel will, in turn, reduce our economy's exposure to the global oil market. Electric and natural gas vehicles are making huge strides that the U.S. should encourage from a standpoint of improving our national security.
Of course, not all arguments for developing a diverse transportation sector come from a national security standpoint; there are also massive economic gains to be had. In 2012, Americans spent over $900 billion on petroleum products. Indeed, that year, the average U.S. household spent $2,912 on gasoline alone-more than any other point in our nation's history. In 2002, the figure was just in excess of $1,200. Diversifying the fuel base will provide consumers with an alternative, and send a strong signal that ever-escalating gasoline prices are unacceptable.
America has at its fingertips the technology to break the oil monopoly and help consumers take advantage of the domestic, abundant, and affordable energy sources with which our nation has been blessed. Through timely and decisive actions, we can tackle one of the greatest economic and security threats facing our nation today.
Editor's Note: General James T. Conway (Ret.), 34th Commandant of the U.S. Marine Corps and co-Chairman of the Energy Security Leadership Council of Securing America's Future Energy.