Oil Risk Insurance: Choosing the Best Buy
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This article was written in response to the 1988 report by the Government Accountability Office that argues for supply-side insurance to hedge against oil risks. Amory Lovins argues that the best way to prevent surprises to oil price and supply is to wring more work from the energy that is already in use. He argues that energy efficiency measures can transform risks into opportunities, costs into savings, environmental damage into benefits, insecurity into lasting security, and political disputes into win-win situations. Lovins shows that instead of considering insurance on the supply of oil, a better solution is to stop wasting oil and use energy more efficiently.