Ukraine and the geopolitics of energy

Ukraine and the geopolitics of energy

It’s been several years since the topic of energy and national security has been front and center in the news.

The Arab Oil Embargo in 1973 made Americans aware of the power that energy-producing nations can have over our economy. When OPEC reacted to U.S. support of Israel during the Yom Kippur War by cutting off our oil supplies, the U.S. was thrown into a nightmare scenario of gasoline rationing, a stock market crash, and the worst recession we’d experienced since the Great Depression.

Dependence on foreign energy sources can have a disastrous effect on our national economy.

But this issue goes beyond economics. In August 1990, Iraq invaded Kuwait, precipitating the Gulf War (Operation Desert Storm). Cynics say we didn’t enter that war out of an altruistic desire to protect the rights of a sovereign state, but out of our own need to protect U.S. oil interests in the Middle East.

The U.S. had reacted to the 1970s crisis by increasing domestic production and fuel economy standards for cars, and our reliance on foreign oil dropped during the 1980s. But according to the U.S. Energy Information Administration, net imports of crude oil and petroleum were back up to 1970s levels by July 1990 (at 8,353 thousand barrels per day), and we were particularly vulnerable.

Flash forward to today and the situation in Ukraine. The current state of affairs there is complicated, driven by a multitude of issues, but one of those issues is certainly energy. Ukraine’s location makes it critical for Russia’s oil exports to Europe. According to an article posted today on The Guardian, without the pipelines running through Ukraine, Russia’s 30% share of Europe’s gasoline market is threatened. And Ukraine’s options are limited, since Russia supplies 50% of its gasoline.

Do American consumers realize the role that energy plays in national security? The answer is yes, but it’s lower down our list of concerns, and we have a really short memory. In Shelton’s 2007 Energy Pulse study, fielded during a U.S. troop surge in Iraq, we asked, “What’s the number one reason to participate in an energy conservation activity or buy an energy-efficient product or service?” Twelve percent of Americans responded, “To protect our nation’s economy and reduce our dependence on other countries.” In last year’s Energy Pulse, we asked the same question, and only 4% offered this response.

So not only has this issue decreased in importance as the economy has improved and the number of U.S. troops in Iraq and Afghanistan has declined, it’s also never been a top behavioral driver for American consumers (for comparison, 39% of 2013 respondents said their number one driver for energy conservation was “To save money”).

The good news is that a study released today by the U.S. Chamber of Commerce Institute for 21st Century Energy finds that increased domestic energy production has improved the U.S. energy security situation. In an international ranking of countries based on their energy security, the U.S. ranks sixth, climbing four places since 2002. And where is Ukraine on this list? Dead last.

Our hope is that increased access to shale oil and natural gas reserves (which some predict will shift the U.S. from being a net energy importer to exporter by 2020) will have a calming effect on geopolitics – and that access to cheaper domestic energy sources will not subvert focus on energy consumption reduction and the continued development of alternative energy sources.

About the Author

Lee Ann Head

Lee Ann Head

Lee Ann is a former contributor to Shelton Insights.

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Suzanne Shelton

President and CEO

Suzanne is the voice and the vision of Shelton Group. Drawing on her extensive experience in energy and the environment – and 25+ years in the marketing and advertising industry – Suzanne provides high-level strategic insights for our clients and guidance for our research and creative departments. She regularly speaks at conferences around the country, including Sustainable Brands, Fortune Brainstorm E and the International Builders’ Show, and serves as a guest columnist for publications like Fast Company, Green Builder and GreenBiz.com.

Susannah Enkema

VP Research & Insights

Susannah directs our research team and plays a key role in extracting the nuggets of information that pave the way for recommended marketing strategies and creative approaches. Susannah has nearly two decades of market research and strategy experience, including her role as president of SE Consulting, where she led the services for the likes of DIY Network and the makers of GORE-TEX®.

Matt Brass

VP Creative

Matt steers the creative department in concepting, designing and producing campaigns. He ensures sound strategy and deep insights inform everything his team develops, and works closely with the accounts department to ensure copy and designs will meet our clients’ goals. As a designer and filmmaker himself, he’s also a principal contributor to all of Shelton’s in-house photography and videography work.

Courtnay Hamachek

VP Operations

Courtnay oversees our day-to-day operations to keep us running smoothly and support our growth. She establishes project management systems and processes to help our teams anticipate bottlenecks, prevent process issues, and keep projects on time and on target. Courtnay has built extensive experience over 25 years in all aspects of marketing, from account services and project management to design and production.

Aaron Crecy

Digital Marketing Director

Aaron is responsible for planning, executing and measuring digital marketing strategies for Shelton Group and our clients, with an emphasis on inbound, content, SEO, social media, email and paid initiatives. He constantly researches and explores new tactics and strategies to improve digital campaign performance and results.

Aaron brings to the table more than 20 years of marketing leadership experience with premium consumer-facing brands. He came to Shelton Group by way of Malibu Boats, where, as Director of Global Marketing, he oversaw strategic marketing planning and execution for multiple product lines, with specific emphasis on social media and digital. Prior to that, he served as CMO for a leading daily fantasy sports operator, guiding it from startup to the industry’s third-ranked site.

Scot Case

Senior Consultant

A sustainability strategy consultant since 1993, Scot has served as non-profit leader, as a partner in an environmental marketing firm that he grew and sold, and as an executive in a multi-billion-dollar, international company. He has published dozens of articles and case studies, was co-author of the original “Sins of Greenwashing” study, testified before Congress, and been quoted on NPR, Good Morning America, CNN, The New York Times, Business Week, and the Wall Street Journal. Scot was also highlighted in an Emmy award-winning documentary on sustainable purchasing.

Casey Ward

VP Account Services

Casey manages our relationships, growth and development with a specific group of clients that includes Environmental Defense Fund, Cotton LEADS and CertainTeed Insulation. She provides leadership and support for the account team members who manage the day-to-day processes for these clients. She contributes to strategic direction for each client and guides our creative efforts to ensure everything we do builds toward meeting – or exceeding – the client’s goals. Her ability to simultaneously see the big picture and pay close attention to the details helps her champion her clients’ needs and identify new growth opportunities for them.