Energy is a modernnecessity. By harnessingenergy resourcesbeyond whattheir ownmuscles can generate,humans have dramaticallyextended and enriched theirdomains. Draft animals, slaves, andbiomass have given way to fossil fuelsas the primary energy sources,with nuclear and renewablesources also entering the mix.Illustratively, Fig. 1shows the great growth andchanging mix of U.S. ener-gy consumption by sourcefor the years 1635 to 2000.Abundant energy has significantlyimproved the quality of life inmany countries even as it hasspawned vexing environmentalproblems ranging from global cli-mate change to local water contam-ination. 16 | 0278-0079/05/$20.00©2005IEEE IEEE TECHNOLOGY AND SOCIETY MAGAZINE | SUMMER 2005Energy Securityas a Rationale for GovernmentalActionCLINTON J. ANDREWSEnergy Securityas a Rationale for GovernmentalAction© ILLUSTRATION WORKSPolitical leaders have paid closeattention to available energy sup-plies because of strong linksbetween growth in energy consump-tion and the economy. The crucialrole of fossil fuels in supportingmechanized warfare has furthersharpened the politicians’ focus.The uneven distribution of fossilfuel resources across the globe hasforced national leaders to treat ener-gy as a strategic commodity. Energy security, therefore, hasbeen a common rationale for gov-ernmental actions over the past cen-tury. I use Yergin’s definition: “Theobjective of energy security is toassure adequate, reliable supplies ofenergy at reasonable prices and inways that do not jeopardize majornational values and objectives” [2,p. 111]. In this article, a brief exam-ination of the histories of oil andelectricity confirms that unfetteredmarkets do not ensure adequateenergy security, that rationales forgovernmental intervention haveevolved over time, and that econom-ic and political interests have beeninextricably interlinked throughout. The energy security lens also hassignificant implications in the cur-rent policy debate over the “hydro-gen economy.”Brief History of OilLike many resource markets, themarket for petroleum suffers fromdramatic and persistent pricevolatility. Demand is unresponsiveto price in the short run, yet growthin supply is lumpy and capital-intensive, and hence it is difficult tobalance demand and supply. Naturalequilibrium is unlikely, so both con-sumers and producers seek externalinterventions that improve price sta-bility. When the oil era took off inthe late 19thcentury, “John D. Rock-efeller’s original solution to theproblem of price volatility was toestablish a monopoly” [3, p. 2].Gillespie and Henry [3, p. 3]identify five successive oil regimes:1) the Standard Oil monopoly, bro-ken up in 1911; 2) the Texas Rail-road Commission’s internationallyinfluential pro-rationing of produc-tion, starting in the 1930s; 3) thepartly contemporaneous Seven Sis-ters cartel consisting of Exxon,Shell, British Petroleum, Mobil,Chevron, Texaco, and Gulf, whichlasted into the 1970s; 4) the Organi-zation of Petroleum ExportingCounties (OPEC) that started in1960 but became effective onlybriefly during the 1970s-1980s; and5) the Saudi-American regimeunder whose twilight years we cur-rently are living. Politicians helped create and pre-serve these oil regimes at every turn[3], [4]. Rockefeller depended oncompliant, laissez-faire legislators forStandard Oil’s monopoly. The TexasRailroad Commission, by 1935 anelected body beholden to small inde-pendent oil producers, was able to usepro-rationing quotas to establish pricefloors that also benefited the interna-tional majors for over 40 years. TheSeven Sisters, although they relied onan interlocking set of private con-tracts to enforce stable market sharesand prices, also depended on Britishand American governmental inter-ventions to prevent producing coun-tries from nationalizing their oil.OPEC, conversely, depended on gov-ernmental enforcement of nationalproduction quotas. The Saudi-Ameri-can regime depends on the Saudiwillingness to be a swing producerand an American willingness to inter-vene militarily in a politically unsta-ble part of the world. Political interest in this economiccommodity is not merely cynical —it is also prudent. In oil consumingcountries, “shocks —interruptions,disruptions and manipulations ofsupply — can lead to sudden, sharpincreases in prices and can imposeheavy economic and political costs”[2, p. 122]. For example, two thirdsof U.S. oil consumption is currentlyfor transportation, and demand isextremely inelastic because fewready substitute fuels exist [5]. In oilproducing countries, petroleum salesmay represent the vast majority offoreign exchange earnings, so a dropin prices or quantities creates eco-nomic and political chaos.Table I summarizes recent oilexport and import dependence statis-tics for selected countries. Over thepast century, the United States hasgone from being the world’s predom-inant oil supplier to being its largestimporter. Much of the U.S. angst overenergy security in recent decadescomes from its change in status into asignificant net importer, as shown inFig. 2. Net imports grew from 0 to11.2 million barrels per day between1949 and 2003, with the nationimporting more than it producedfrom 1994 onward [5], [6]. U.S. netoil imports cost $122 billion in 2003and represented 23% of the nation’strade deficit [7]. Japan and mostEuropean countries have alwaysimported almost all of the oil theyconsumed, and they have long sinceadapted their economies and policies.China became a net importer in 1993,and imports grew to about 2 millionbarrels per day by 2002 [8]. Oil SecurityA number of changes to the global oilmarketplace since the severe shocksof 1973 have made oil markets muchmore secure and have allowed eco-nomic rather than political factors togovern most of the time. First, in1975, importing countries created theInternational Energy Agency (IEA),which developed a deterrent oil sup-ply allocation system for supply dis-ruptions. Second and more important,importing countries diversified awayIEEE TECHNOLOGY AND SOCIETY MAGAZINE | SUMMER 2005 | 17Unfettered markets do not ensureadequate energy security.from Middle Eastern oil towards oilelsewhere, and towards coal, naturalgas, and other fuels, while also great-ly increasing their energy efficiency.Third, importing countries developedstrategic petroleum reserves to carrythem through short-term supply dis-ruptions. Fourth and arguably mostimportant, the IEA developed aworldwide information