On September 11, 2001, we witnessed a catastrophic attack on our country, one that changed our outlook of the world in many ways. Americans realized for the first time that we did not live in a country that could escape the terrorist attacks that take place around the world.
We were not, and are still not living in a place immune to the terror some countries see on a daily basis. Despite the new realities we have seen since that fateful day, I have confidence in our government and know that since 9/11 many improvements have been made, and continue to be made, to make our country more secure.
Many have not realized the incredibly big impact that our oil dependency has on the security of our country. The attack on 9/11 by Islamic extremists should have been a wake-up call to the nation that our vital security interests are threatened by our increasing dependence on Middle East oil imports. I am sorry to say that our nation still slumbers.
And we should see that our national security is at risk, our foreign policy is shackled, and our diplomatic credibility in the Middle East undermined, so long as we buy from regimes that deny democracy and freedom.
Our nation currently relies on foreign oil for 55 percent of our energy requirements, and this dependence is expected to rise to 65 percent by 2020. Indeed, during the next 20 years, our energy demand is expected to increase more than 50 percent. The United States uses oil to supply about 40 percent of our energy needs. No one could question the fact that energy is absolutely indispensable to maintain our national security and our way of life.
America has become increasingly dependent on petroleum from Saudi Arabia, Iran, and Iraq. With about 250 billion barrels, Saudi Arabia has more proven oil reserves than any other country; that is, one-fourth of the world's oil reserves.
Iran and Iraq each control about 10 percent of the world's oil reserves, with large amounts of unexplored resource. The expectation is that the Persian Gulf must expand oil production by almost 80 percent during the next two decades to supply the world market. That region has the natural resources and technical capability to achieve that production, but what will it cost us?
On no one quality, on no one process, on no one country, on no one route, and on no one field must we be dependent. Safety and certainty in oil lie in variety and variety alone.
Diversity in supply and restraint in demand are the twin paths out of the crisis we face. Supply diversity can be achieved in two ways: by developing new international sources and by increasing domestic production.
Internationally, our nation is ignoring the opportunities that lie in the Caspian Basin and Russia. In the Caspian Sea area, oil reserves of up to 33 billion barrels have been found, a potential greater than U.S. reserves and double those of the North Sea. Estimates are made of another 233 billion barrels in Caspian reserves. These could add up to 25 percent of the world's proven reserves. Russia may have even higher reserves.
Today, America buys virtually no oil from either the Caspian states or Russia. Massive investments are required to bring these resources on line, which means reforms will be needed in the nations bordering the Caspian Sea and in Russia itself. Private capital investment requires political stability and the rule of law. Contracts must be honored, corruption must disappear, and the regulatory regime must be favorable to attract investors. The governments in the countries concerned must have the political will to make the changes necessary to attract investment. But American leaders can, and ought to, encourage reforms more vigorously than we have.
Consider the contributions of my home state of Montana. Fuel cell research is underway at our universities. This will yield new ways to power our homes and cars. New technologies can turn Montana's abundant agricultural crops into alternative fuels.
Access to federal lands should be a major goal of the domestic agenda. First on the list is opening the Arctic National Wildlife Refuge (ANWR), which would be a major improvement in energy position. This is not only an Alaska issue, it's an energy security issue.
Additionally, we must not overlook the great possibilities on federal land. There is a misconception that federal resources are being rapidly developed without regard to the land. The truth is that drilling activity continues to decline. Today, there are 30 percent fewer active drilling rigs than there were two years ago. The number two years ago was 80 percent less than the drilling activity 20 years before. And currently, the federal government is actively producing natural gas from only 5 percent of its mineral estate. It is estimated that 95 percent of undiscovered oil and 40 percent of undiscovered gas is located under the lands in the Inter-Mountain West.
Before 9/11, the U.S. Congress had the luxury of passing environmental laws that locked up huge areas on federal land and offshore. We could afford, some said, not to know what was "out there." The prevailing fear was that if we found oil or gas we might want to develop it. As it stands, less than 19 percent of the lower-48 Outer Continental Shelf (OCS) lands are available for development. This policy has led to absurd results. For example, our citizens in the Northeast are paying top dollar for Canadian natural gas taken from waters just to their north, while a moratorium exists on looking for the natural gas in similar continental shelf structures on the U.S. east coast. The National Academy of Sciences concluded that improved production technology and safety training of personnel have significantly reduced both blowout and operational spills on the OCS. The moratorium on OCS leasing is thus based on outdated facts and policy. I believe the environmental risks of transporting gas from the Middle East to our country are greater than bringing our OCS gas by submerged pipeline directly to shore.
Ladies and gentlemen, energy security is a complicated topic and I fully realize that my brief comments today only touch on a few aspects of the problem. I hope that you understand my conviction that we can no longer continue with business as usual on foreign oil imports. We must all realize the dangers that lie in our current energy dependencies, and we must work to make changes to create energy security for our country.
Since 9/11 we have come to live in a world with new threats and new opportunities. We have come to live in a world where a new reality has shown us that energy diversity is not simply a good idea, but it is essential to our national survival.