Americans are literally paying for our country’s reliance on imported oil. Global oil prices reached another record high yesterday, and prices rose dramatically at the pump. But relatively few Americans are aware of a potential hidden cost: dependence on foreign oil has broader ramifications for our foreign policy and energy security.

Several forces complicate the picture: the drop in the value of the dollar overseas, the rising energy needs around the world, unfriendly regimes using energy resources for geopolitical gain, and the preponderance of other global crises – such as food shortages now experienced in several countries -- that are linked to transportation costs.

Clearly, the world faces increasing competition for the fossil fuels that drive global industry, transport, and economic growth. Rising powers such as China, India, and Brazil have a growing appetite for energy. To satisfy their thirst for oil, some are looking to buy energy from regimes that the United States finds problematic. China, for example, has been supporting the oil industries of Iran, Sudan, and Burma. Such energy deals can undermine the international community’s influence on these countries in matters ranging from nuclear proliferation to genocide to political freedom.

In addition, many sources of fossil fuels on the world market are in parts of the world that are either unstable or politically unfriendly to the United States. This provides leverage for those who control these energy supplies, enabling them to challenge U.S. foreign policy objectives.

We have seen examples of this in recent years: Russia cutting off gas supplies to the Caucasus, the ever more brazen rhetorical attacks against the United States by Venezuelan President Hugo Chavez, and the flow of petrodollars from the Middle East supporting extremism -- sometimes even terrorism.

Finally, the linkages between energy security and other international security challenges, whether it be global warming or the current food crisis, have prompted many to take look at alternative energy sources. But as the food crisis has shown, picking “winners” can have unintended consequences. When you see energy companies competing with food companies for corn on the commodities exchange, U.S. policy objectives to promote both energy security and food security can become compromised. Whatever alternatives we pursue, in order to sustain them we will need to avoid creating competition among global priorities.

These are just some of the challenges that we face when examining energy security policies. I look forward to hearing the testimonies of our three distinguished witnesses about what we can do in the foreign policy realm to address these issues