Simulated Oil Crisis Raises Eyebrows  

Posted by Big Gav

I feel unclean linking to them, but Fox has the only report I can find on the results of the recent oil crisis simulation.

A group of former officials from both parties and the intelligence community gathered in Washington Thursday to demonstrate how the world is flirting with disaster on energy. The message in the exercise: If consumers don't like spending $2 per gallon for gasoline, they will probably like $5 per gallon even less.

In a sobering reminder of the need for a long-term energy strategy, a nonpartisan group forming the National Commission on Energy Policy held a simulated National Security Council meeting to grapple with a frightening sequence of events.

In this exercise, Nigeria (search), the fifth-largest oil supplier to the United States, suffers violent political unrest in December 2005 and U.S. oil companies evacuate, pulling 600,000 barrels a day off the global market. "As many of you know, this unrest in Nigeria could have a significant impact on the supply and price of oil," said former CIA Director Robert Gates, one of the participants in the simulation.

At about the same time, a very hard winter prompts a large increase in demand. "The cold weather, that could add another 700,000 barrels a day to daily oil demand worldwide," said former Royal Dutch/Shell Group official David Frowd, another participant.

With those two events, the world suddenly develops a 2 million barrel per day shortfall. In the scenario, President Bush's advisers consider releasing oil from the Strategic Petroleum Reserve but decide the 90-day supply should be saved in case things get worse.

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5 comments

Took me a while to get over here, but...This sounds JUST LIKE that FX movie "Oil Storm". I'm not kidding.

I know I'm alone here, but that movie was kind of good.

Good point ianqui - as I haven't seen the movie it hadn't occurred to me - but from the reviews I've read you're spot on - the scenarios they go through are exactly the same.

Which I'm sure isn't a coincidence.

Thanks Stephen - thats a better write up of the exercise (but it hadn't made its way onto google News when I did my search unfortunately).

The United States would be all but powerless to protect the American economy in the face of a catastrophic disruption of oil markets, high-level participants in a war game concluded yesterday.

The exercise, called "Oil Shockwave" and played out in a Washington hotel ballroom, had real-life former top U.S. officials taking on the role of members of the president's Cabinet convening to respond to escalating energy crises, culminating in $5.32-a-gallon gasoline and a world wobbling into recession.

"The American people are going to pay a terrible price for not having had an energy strategy," said former CIA director Robert M. Gates, who took on the role of national security adviser. Stepping out of character, he added that "the scenarios portrayed were absolutely not alarmist; they're realistic."

The exercise began with ethnic unrest in Nigeria, leading to the collapse of the oil industry in that west African nation. Then al Qaeda launched crippling attacks on key energy facilities in Valdez, Alaska, and Saudi Arabia.

But the war game's participants -- including former CIA director R. James Woolsey, former Marine Corps commandant Gen. P.X. Kelley and former EPA administrator Carol Browner, soon realized the U.S. government had few options in the short term to prevent an economic crash in this country and worldwide.

Today's Sydney Morning Herald also printed part of the Post's report .

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