Oil Shockwave – An Oil Crisis Executive Simulation

On June 23, 2005, a group of nine former White House cabinet and senior national security officials convened to participate in a simulated working group of a White House cabinet.

Their task: to advise an American president as the nation grapples with an oil crisis over a seven-month period. As they enter the room, they are unaware of the circumstances or nature of the oil crisis.

The events that comprised Oil ShockWave, while fictional, were carefully designed to reflect real-world conditions and events. As moderator of the exercise, I was charged with maintaining the focus and relevance of the discussions to help ensure that current policy makers would find our work both informative and applicable. While not seeking to reach unanimous conclusions, most of the key findings and recommendations were embraced by a majority of participants.

Even among individuals who have spent years contending with security and energy issues, it was surprising to learn the extent to which seemingly small disruptions in world oil supplies could inflict serious economic damage and alter the global security environment. This report documents the methods, events, and findings of Oil ShockWave. Although the exercise produced a number of conclusions that merit careful consideration, two observations are particularly noteworthy:

First, the economic and national security risks of our dependence on oil—and especially on foreign oil—have reached unprecedented levels. The threat is real and urgent, requiring immediate and sustained attention at the highest levels of government.

Second, if we wait until a crisis occurs to act, the nation will have access to few, if any, effective short-term remedies. To protect ourselves, we must transcend the narrow interests that have historically stood in the way of a coherent oil security strategy and implement policies that will meaningfully address both the supply and demand aspects of our current oil dilemma.

I hope that those who read this report will join the effort to reduce America’s oil vulnerability. As Oil Shock- Wave demonstrates, it is an urgent task worthy of the nation’s best efforts.