Dynamic Simulation Model of the National Security Consequences from Energy Supply Disruptions

Abstract

Recent terrorist attacks in the United States have increased concerns about potential national security consequences from energy supply disruptions. The purpose of this Laboratory Directed Research & Development (LDRD) is to develop a high-level dynamic simulation model that would allow policy makers to explore the national security consequences of major US. energy supply disruptions, and to do so in a way that would integrate energy, economic and environmental components. The model allows exploration of potential combinations of demand-driven energy supplies that meet chosen policy objectives, including: Mitigating economic losses, measured in national economic output and employment levels, due to terrorist activity or forced outages of the type seen in California; Control of greenhouse gas levels and growth rates; and Moderating US. energy import requirements. This work has built upon the Sandia US. Energy and greenhouse Gas Model (USEGM) by integrating a macroeconomic input-output framework into the model, adding the capability to assess the potential economic impact of energy supply disruptions and the associated national security issues. The economic impacts of disruptions are measured in terms of lost US. output (e.g., GDP, sectoral output) and lost employment, and are assessed either at a broad sectoral level (3 sectors) or at a disaggregated level (52 sectors). In this version of the model, physical energy disruptions result in quantitative energy shortfalls, and energy prices are not permitted to rise to clear the markets.