Talks about a sobering scenario, called Oil Shock Wave played out at the National Summit on Energy Security that simulated a cabinet level crisis meeting following an oil supply disruption that illustrated the profound dependence of our society to imported crude oil and all the vulnerabilities that result from that unhealthy dependence.

by Jim Greenberger, Executive Director, National Alliance for Advanced Technology Batteries (NAATBatt), a not-for-profit trade association of companies involved in the manufacture of large format advanced batteries for automotive and grid-connected energy storage applications. Connect with Jim on Linkedin.

A few weeks ago, I attended the National Summit on Energy Security in Washington, D.C., produced by Securing America’s Energy Future (SAFE) and the Electrification Coalition. The Summit featured a program called Oil Shock Wave, which simulated a meeting of the U.S. Cabinet following a series of events in the Middle East threatening to disrupt petroleum supplies. The simulated Cabinet members (including such former high government officials as Ari Fleischer, Stuart Eizenstat, John Negroponte and Susan Schwab) grappled in real time with unfolding events in the Middle East, their impact on the financial markets, and America’s options in responding to them.

The Oil Shock Wave program was excellent, if predictably sobering. It underlined in dramatic fashion the extreme vulnerability of the American economy to oil supply disruptions and the uncomfortable plausibility of events that would lead to such disruptions.

More importantly, the simulation demonstrated the role of crisis in government decision making. The steps necessary to reduce American dependence on imported petroleum were well known to the Cabinet members prior to the simulated crisis, just as they are well known to the readers of this column. It was interesting to see how, as the simulated crisis escalated, the short term political considerations that kept those steps from being taken fell away and let the simulated Cabinet take action.

Of course, by the time the Cabinet took action, it was already too late. The extreme economic damage of the disruptions was already unavoidable; the Cabinet’s actions simply served to lessen future vulnerability. To paraphrase one of the participants, a crisis makes choices easy but reduces the number of choices you have to make.

It is hard to identify the lessons of the Oil Shock Wave simulation. That the federal government is dysfunctionally deadlocked by short term politics and seems only to make important decisions in times of crisis is not news. Neither is the extreme vulnerability of the American economy to petroleum supply disruption. It was tempting to take a pessimistic lesson away from the program.

Related post: “Unpredictable Oil Prices are Hurting Everyone“, argues that the global economy needs a better market regulating mechanism that can help manage energy price swings so they become less damaging to the world’s economies.

But what the simulation really showed was the importance of the Big Idea. Big Ideas are fundamental changes that societies must make to survive or to thrive. Doing what is necessary to break our dangerous dependence on imported petroleum is certainly one such Big Idea.

A crisis can motivate a Big Idea. But there are other ways to motivate a Big Idea. Courage by political leaders is one. Desperation and courage are, after all, close cousins. We need to demand courage from our political leaders on the subject of energy policy. The American people will recognize courage when they see it, and they will follow. We must reassure our political leaders of that fact, if they cannot see that wisdom themselves.

The alternative to courage is a poor one, both for the country and for its leaders. An energy policy driven by crisis and desperation will be expensive and potentially catastrophic. And when the desperation comes, the American people will not forgive those who have driven them to it.

Related post: “Energy Issues Could Help Define the 2012 Republican Primary“, looks at how energy and environmental issues, and the candidate stances on them, will play a large role in the 2012 presidential election.

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