NATIONAL DEFENSE, OIL IMPORTS, AND BIO-ENERGY TECHNOLOGY

Terrorist disruptions of crude oil supplies anywhere in the world now pose a serious threat to the U.S. economy. Price shocks from terrorist acts could have a pervasive negative effect on producer costs and consumer behavior, with the potential to derail the current eco-nomic recovery. The authors pro-pose insulating U.S. energy prices from world price volatility by gradu-ally eliminating imports of crude oil from non-Western Hemisphere sources. 2004 Morgan Stanley.