Energy Security: Always Fighting The Last War

Energy Security: Always Fighting The Last War

Share to Linkedin During the Gulf War, a pair of American soldiers stand in the turret of an M1A1 Abrams tank as, near ... [+] the border with Iraq, oil wells burn in the distance, Kuwait, March 20, 1991. (Photo by Allan Tannenbaum/Getty Images) [This is an excerpt from a lengthy research report in progress.] In 1986, my M. I. T. working paper "Fighting the Last War: Preparations for the Next Oil Crisis" I described various oil crises in the post-war era and how they each influenced the understanding of both what an oil crisis is and the appropriate responses, resulting in policies that were always backward-looking. Thus, the 1951 nationalization of BP's Iranian operations resulted in the shutdown of the Abadan refinery, one of the world's largest and a major source of oil products to Asia. This helped create the policy of 'refining at the consumer's doorstep,' that many industrial countries adopted. But the next disruption was unrelated to refining: the 1956 Suez Crisis shut down the short-haul route from the Arabian/Persian Gulf to Europe, in effect forcing a build in at-sea inventories that I estimated at twenty-five million barrels, a large amount at that time. This was one