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U.S. Energy Security Risks Said Getting Worse

America's energy security risk is bad and getting worse under current policy and regulatory framework, according to a report by the U.S. Chamber of Commerce's Institute for 21st Century Energy.

In the third annual edition of its Index of Energy Security Risk, the institute analyzed 37 individual metrics in four primary areas -- geopolitical, economic, reliability and environmental -- and concluded that the risk index score for 2011 was 101.3, which was nearly four points higher than a year before and the highest since 1970.

That score "is the clearest indication yet that America's energy security is on the wrong track," according to the institute's CEO Karen Harbert. "High oil prices, price volatility, and a continued lack of progress on infrastructure have all combined to elevate our energy security risk to the highest it has been in over forty years."

Of the 37 metrics, 13 showed increased risk in 2011, 21 showed a decrease in risk and three showed little change. The overall increase was caused by the large margins in the metrics that had increases, the institute said. Geopolitical energy security risks rose by 5.3 points, economic risks rose by 8.6 points, reliability risks rose by 1.1 points, and environmental risks decreased by 2.9 points.

Under the current policy scenario, the index is projected to average 95.5 points through 2035, almost two points higher than expected based on last year's projections (see NGI, Aug. 8, 2011).

"The index shows that America needs to undertake a course correction on energy, and we have the resources to do it," Harbert said. "Increasing American energy production will go a long way to balance the global energy market and lower our risk profile."

One bright spot in America's energy picture is natural gas from the country's shale plays, which contributed to improved scores in a number of metrics, including natural gas imports, the institute said.

"One of the big stories in this year's index is the impact that shale is already having on our energy security," said Stephen Eule, vice president at the institute. "Natural gas, along with coal, has helped keep electricity prices low, and the ever-increasing supply of gas thanks to advances in technology will give America a competitive advantage for many years to come."

Perhaps the most immediate threat to energy security is cybersecurity. The Department of Homeland Security in May reported that since last December there has been an "active series" of cyber attacks on gas pipeline companies' computer networks (see NGI, May 14).

Last month Telvent, a Canadian firm whose software systems and services are used to remotely manage more than half of the oil and gas pipelines in North America and Latin America, confirmed a security breach involving the project files of some of its customers (see NGI, Oct. 1). News of the Telvent breach came just days after Dell's SecureWorks Counter Threat Unit issued an alert warning of a sustained cyber espionage campaign directed at companies in the energy sector.

And it followed on the heels of Federal Energy Regulatory Commission Chairman Jon Wellinghoff's announcement to create an office at the agency that will focus on cyber and physical security risks to energy facilities under its jurisdiction, such as interstate natural gas pipelines, gas storage and electric transmission facilities (see NGI, Sept. 24). Wellinghoff recently expressed his exasperation with the lack of a federal system for reporting threats to energy infrastructure (see NGI, Sept. 10).

Taking matters into his own hands after Congress failed to pass the Cybersecurity Act of 2012 this summer, President Obama reportedly is preparing an executive order aimed at protecting critical national infrastructure, including power plants, and natural gas and crude pipelines, from cyber attacks (see NGI, Sept. 17).

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