WASHINGTON, May 18 (UPI) -- A coalition of former U.S. ambassadors called for a drastic reduction in the amount of foreign oil imported to help reduce the nation's trade deficit.
The Diplomatic Council on Energy Security, a bipartisan group launched Thursday, points out in its inaugural report that in 2011 the U.S. oil trade deficit increased to $327 billion -- 58 percent of the total trade deficit, the highest annual proportion ever.
In 2002, the oil trade deficit represented 25 percent of the country's total deficit.
"For a crystal-clear example of how our nation's dangerous dependence on petroleum hurts our economic security, look no further than oil's impact on the U.S. trade deficit," Ambassador Elizabeth Frawley Bagley, co-chairwoman of the DCES, said in a statement.
Related
Furthermore, the DCES "Oil and the Trade Deficit" report states that progressively higher oil prices have increased the cost of the net U.S. oil import burden in recent years, even as imported volumes declined.
"High and volatile oil prices have also resulted in vast wealth transfers and contributed to severe economic disruption -- including every American recession over the past four decades," Bagley said. "We have an opportunity to address this fundamental threat, but it will require a lasting and sustained commitment."
High and volatile oil prices have pushed the cost of petroleum "to levels that would have seemed unimaginable just over a decade ago," the report says.
This has contributed to a rapid expansion of the U.S. trade deficit, DCES says, making the nation "increasingly dependent on foreign capital inflows and building up an enormous financial liability to foreign entities."
"We have seen all too well over the past year how international events outside the control of the United States have driven oil prices higher and created less-than-optimal foreign policy solutions," said Ambassador Alfred Hoffman, Jr., a co-chairman of the DCES.
"When countries like Iran use oil as a weapon to rattle its saber in the Middle East, U.S. policymakers are forced to confront the hard truth that our reliance on the global oil market creates unwanted consequences for our national and economic security," he said.
In a related development, Japanese news agency Kyodo reported Wednesday that U.S. President Barack Obama is expected to seek support, during the Group of Eight Nations meeting in Camp David, Md., this weekend, for the release of strategic oil reserves.
Releases from the Strategic Petroleum Reserve are typically carried out in emergency situations but last June the White House approved the release of 30 million barrels of oil from the SPR in response to supply losses from Libya that officials said were threatening the economic recovery.
Prior to that, President George H.W. Bush tapped the SPR in 1991 during Operation Desert Storm and President George W. Bush also did in 2005 after Hurricane Katrina.
