National Security Consequences of U.S. Oil Dependency, a report by the Council on Foreign Relations Independent Task Force on Energy, concludes that the “lack of sustained attention to energy issues is undercutting U.S. foreign policy and U.S. national security.” The report goes on to examine how America’s dependence on imported oil—which currently comprises 60 percent of consumption— increasingly puts it into competition with other energy importers, notably the rapidly growing economies of China and India.

The task force was chaired jointly by James R. Schlesinger, a former secretary of defense and secretary of energy, and John Deutch, former director of Central Intelligence and undersecretary of energy, and drew from industry, academia, government, and NGOs. PESD Director David Victor directed the task force and FSI senior fellow by courtesy James Sweeney, director of Stanford’s new Precourt Institute for Energy Efficiency, served as a member.

The task force unanimously concluded that incentives are needed to slow and eventually reverse the growth in petroleum consumption, particularly in the transportation sector, but was unable to agree on which specific incentives—such as gasoline tax-funded energy technology R&D, more stringent and broadly applied Corporate Average Fuel Efficiency (CAFE) standards, and a cap-and-trade permit system for gasoline—would most effectively achieve this result.

The task force report included additional recommendations regarding the supply and consumption of energy including the following:

• Encourage oil supply from all sources
• Promote better management and governance of oil revenues
• Remove the protectionist tariff on imported ethanol
• Increase the efficiency of oil and gas consumption in the United States and elsewhere
• Switch from oil-derived products to alternatives such as biofuels
• Make the oil and gas infrastructure more efficient and secure
• Increase investment in energy technology R&D
• Promote the proper functioning and efficiency of energy markets
• Revitalize international institutions such as the International Energy Agency (IEA)

The report stressed that the U.S. government must reorganize to integrate energy issues with foreign policy to address the threats to national security created by energy dependence. The task force offered a number of recommendations to better promote energy issues in foreign policy deliberations as follows:

• Establish an energy security directorate at the National Security Council to lead an interagency process to influence the discussion and thinking of the NSC principals
• Fully inform and engage the secretary of energy on all foreign policy matters with an important energy aspect
• Include energy security issues in the terms of reference of all planning studies at the NSC, Defense, State, and the intelligence community

The task force restricted its inquiry to the challenges of managing U.S. and global dependence on imported oil and gas and did not address other important energy security issues such as nuclear proliferation and global warming.

During 2004-06, the Program on Energy & Sustainable Development undertook a study of the experience of independent power producers ("IPPs") in developing countries. As part of the study, the Program sponsored a series of country studies. These papers detail the basic contours of the IPP experience in each country and discuss the country factors identified in the research protocol. Additionally, each paper presents the universe of greenfield IPPs in the country, identifies the significant characteristics across which these projects vary, and selects a small number for individual examination.

This paper summarizes the experiences of the countries and projects that were part of the IPP study. Additionally, the paper provides a concise statement of project outcomes and a brief statement of the rationale underlying the analysis of each project. In doing so, the paper aims to gather in one place the disparate outcomes that are discussed in a long series of working papers, thereby providing a transparent and accessible document that will facilitate further study and critique of the original coding for the study, as well as of the analysis of projects and countries.

Nuclear energy is undergoing a renaissance driven by two very loosely coupled needs; the first for much more energy to support economic growth worldwide, and the second to mitigate global warming driven by the emission of greenhouse gases from fossil fuel. A new generation of power reactors has been developed that are safer, easier to operate, and purported to have lower capital costs. This, coupled with rising costs of fossil fuels and concerns about environmental pollution from fossil fuel power plants, has lead to an increase in orders for new plants, mainly from Asia, but beginning to impact North America and Europe as well.

India stands out in the IPP study as the second largest developing country market and features an evolving legal and regulatory regime created in the early 1990s specifically to promote investment in greenfield independent power projects.  India's electricity sector, which straddles state and federal jurisdictions, and India's experience with a diverse range of greenfield independent power producers have produced dramatic variation in investor strategies and outcomes, ranging from the disastrous Dabhol Power Project in Maharashtra to the modestly successful GVK project in Andhra Pradesh and Paguthan project in Gujarat.  The experience of host governments at the state level has also varied.  Given the political dynamics of the Indian power sector, discussed in detail below, it is hardly surprising that nowhere in India have politicians and state offtakers displayed truly lasting enthusiasm about IPP development.  In each of the four Indian states examined in detail in this paper (Andhra Pradesh, Gujarat, Tamil Nadu and Maharashtra), officials have openly and regularly criticized IPPs.