Executive Briefings

Our Vulnerability? Petroleum-Dependent Transportation.

Our aim should not be total independence from foreign sources of petroleum. That is neither practical nor necessary in a world of interdependent economies. Instead, the objective should be developing a sufficient degree of resilience against disruptions in imports. Think of resilience as the ability to absorb a significant disruption, bigger than what could be managed by drawing down the strategic oil reserve. Increasing diversity in the sources of our energy can strengthen our resilience. Commercial, industrial and home users of oil can already use other sources of energy. By contrast, transportation is totally dependent on petroleum. This is the root cause of our vulnerability.
Source:  McKinsey Quarterly

Our aim should not be total independence from foreign sources of petroleum. That is neither practical nor necessary in a world of interdependent economies. Instead, the objective should be developing a sufficient degree of resilience against disruptions in imports. Think of resilience as the ability to absorb a significant disruption, bigger than what could be managed by drawing down the strategic oil reserve. Increasing diversity in the sources of our energy can strengthen our resilience. Commercial, industrial and home users of oil can already use other sources of energy. By contrast, transportation is totally dependent on petroleum. This is the root cause of our vulnerability.
Source:  McKinsey Quarterly