With his new book Myths of the Oil Boom, Dr. Steve Yetiv builds upon his previous work, which is centered on energy security, U.S. foreign policy, and the Persian Gulf. Dr. Yetiv makes the argument that increasing U.S. oil production can only take America so far, because true energy security comes from reducing domestic consumption, which in turn attenuates exogenous shocks on U.S. energy imports, and subsequently the U.S. economy. The author disagrees with over optimism that increasing domestic production of oil will liberate the U.S. from its dependence on the Middle East and its need to project power in the Persian Gulf. Instead, he uses the term "synergistic strategy" to argue that the best solution is a reduction in domestic consumption concurrent with the increase in domestic production. Dr. Yetiv argues that if the U.S. fails to formulate a long-term strategy aimed at reducing its consumption, it will be forced to maintain its posture throughout the Persian Gulf in order to protect its ever vital shipping lanes.1 The book provides a comprehensive overview of the geopolitical landscape and the importance of the Middle East’s oil production in the future; "Oil Market Power" and foreign policy; and solutions to mitigate contemporary trends of consumption for a more energy efficient and secure future. This work is very easy to digest and difficult to refute.
There is a combination of environmental, geological, political, and economic factors that could hinder the oil boom. Delving into the geopolitical landscape surrounding Saudi Arabia’s increased oil production, Dr. Yetiv touches on OPEC’s ability to cooperate and reduce its production in equal measure to the projected increase in U.S. production. This is a concern given OPEC’s poor history of creating consensus, but if the organization were to practice better discipline in aggregate, it might offset the U.S. boom’s downward pressure on oil prices.2 There is much credibility to this claim, considering that the cost to produce shale oil is higher than that of a Saudi-produced barrel of oil. Meanwhile, other OPEC members require higher prices to receive economic benefit from their production. It is the proximity of this high "break even" price to the projected price of shale oil that reduces the chances of suppressing America’s oil boom. In essence, it is the oil boom’s effect of lowering oil prices that will benefit Americans, not the domestic production of oil itself. This further validates Dr. Yetiv’s claim that increased U.S. production alone is merely an additional buffer to exogenous shocks in the oil market.3
The book highlights the lifecycle of the oil boom and the future importance of the Middle East. The projected plateau of U.S. oil production is likely to bring the Middle East back into focus as the prominent region for global oil trade after 2025.4 Considering that many OPEC nations do not maintain an abundance of foreign reserves, understanding the life span of the shale boom is crucial. If it is short-lived, oil producing nations have a fighting chance of maintaining competitive prices, and then returning to high prices that best sustain their economies. If the boom lasts longer, the U.S. will continue to apply pressure on global oil prices further into the future.
Dr. Yetiv provides an interesting perspective on "Oil Market Power" and its complement to U.S. foreign policy. With the proliferation of terrorism and anti-American sentiment abroad, the U.S. may exercise a soft form of influence abroad by altering domestic consumption.5 Dr. Yetiv argues that while use of this tool has thus far been absent from U.S. foreign policy, the real payoff off lies in weakening adversaries by reducing the economic benefit they receive from U.S. consumption. Again, this hinges on a reduction in domestic oil consumption.
Though it is not a primary argument, it is worth reflecting on Dr. Yetiv’s claim that Saudi Arabia sees Washington as less strategically important than it has in the past. The reasoning for this claim is that Saudi Arabia is less dependent upon the U.S. after Saddam Hussein’s removal, and has concerns about possible Iranian backlash as a result of Riyadh cozying up with Washington.6 There is some room to debate this claim given Iran’s growing influence throughout the region and both the U.S. and Saudi Arabia’s shared interest in denying Iran a nuclear weapon. A nuclear Iran does pose a threat to the Saudi Kingdom and provokes the possibility of nuclear proliferation throughout the Gulf. The U.S.’ strategic importance has shifted from deterring an Iraqi ground invasion to enforcing the Nuclear Deal and continuing to ensure Iran does not use its naval forces to block or disrupt maritime activity transiting the Gulf. Additionally, Iran has increased its naval and Anti-Access/Area-Denial (A2/AD) capabilities to occlude the Gulf’s commercial artery: The Strait of Hormuz.7 Dr. Yetiv does, however, highlight the irreplaceability of the U.S. Navy’s forward deployed presence to ensure access to the strait, which subsequently reduces downstream costs of Saudi Arabia’s oil.
The book’s conclusion provides recommendations on how to reduce oil consumption to abate the grim world Dr. Yetiv envisions in 2040. This is where Dr. Yetiv introduces his "moonshot" program that induces consumption of electric and hybrid vehicles through government direction and incentives. Given the slow transition to cleaner modes of transportation, creating a U.S. fleet of hybrid and electric vehicles will not take place without a shift in cultural perception towards these alternatives. Furthermore, the transition will require necessary technological advancements to increase the range, as well as infrastructure to support the widespread use, of these alternatives.8
Students across disciplines will find this book engaging, given its political and economic focus. Virtually anyone who reads this book will find its cogent analysis valuable in explaining the impact current and future U.S. energy policy have on the average citizen and the world at large.
1 Steve Yetiv, Myths of the Oil Boom: America’s National Security in a Global Energy Market (New York: Oxford University Press, 2015), 7.
2 Ibid., 22.
3 Ibid., 85.
4 Ibid., 28.
5 Ibid., 107.
6 Ibid., 42.
7 Michael Connell, "Iran’s Military Doctrine" (unpublished document, United States Institute of Peace, Washington, D.C.: 2010), http://iranprimer.usip.org/sites/iranprimer.usip.org/files/Iran_s%20Military%20Doctrine.pdf.
8 Yetiv, 183