America should rethink overhauling energy export policy in favour of ‘drill, baby, drill’ simply to flex muscle against Russia over Crimean play.
Can boosting U.S. energy exports help declaw the prowling Russian bear?
In the weeks following President Vladimir Putin’s military expansion into Ukraine’s Crimean region, manipulating U.S. energy sources – the full spectrum of oil, natural gas and coal, in addition to alternative energy – has been thrown about as a possible way to demonstrate American resolve in standing up to foreign aggression overseas.
Enter energy. Veteran New York Times columnist Thomas Friedman wondered aloud last week why the U.S. was not going after Russian oil and gas interests, the “twin pillars” of Putin’s “regime,” if America is interested in having Putin take them seriously.
Europe is reliant on Russia for 30 per cent of its natural gas and may, with good reason, fear Putin could order Gazprom, one of the world’s largest natural gas companies based in Moscow, to slow the flow of gas to a trickle should European leaders react too harshly in condemning his actions on the Black Sea.
Friedman suggests a slew of remedies to free Europe from the clutches of Russian gas dependency – and, in an opportunistic wrinkle, make the continent more dependent on booming U.S. energy resources – including a gasoline tax, a carbon tax and a national renewable energy portfolio standard. “You want to frighten Putin? Just announce those steps,” he said, but doubts Congress will ever rise to the challenge.
House of Representatives Speaker John Boehner followed Friedman’s lead in taking to the pages of the Wall Street Journal Thursday to say the United States was imposing economic sanctions on itself, “sentencing consumers in the U.S. and abroad to higher prices and slower growth while ceding the international energy marketplace to countries such as Russia, Venezuela and Iran.”
The answer is to boost U.S. exports of liquefied natural gas, Boehner said, in addition to approving the Keystone XL pipeline, putting an end to the slow death of coal production and burning for electricity generation and asking President Barack Obama to end the decades old ban on exporting crude oil via executive order. “America not only has a right to develop and market its natural resources,” Boehner wrote. “In the face of rising danger, it has an obligation to do so.”
This week, an editorial from the Charleston Daily Mail, deep in the heart of America’s coal mining region in West Virginia, enthusiastically embraced the new dogma that processing and exporting fossil fuels is not only good for American business but instrumental in securing a more peaceful world. As Boehner tells it, the U.S. has an obligation to sell liquefied natural gas and crude oil abroad: failure to do so would be downright undemocratic, he seems to suggest.
And West Virginia is here to help, the editorial proclaims, given the state and its neighbours are sitting on more than 141 trillion cubic feet of natural gas in the Marcellus shale deposit. “Surely some natural gas from West Virginia and other sources in the United States can be sold and shipped to Europe to end the Russian monopoly,” they posit.
Much hand-wringing has taken place in the West following the arrival of masked Russian troops in Simferopol over what, if anything, Western governments can accomplish to punish Putin’s aggression. And the “soft power of exporting energy,” the Daily Mail writes, “would be far more effective than the current timid diplomacy displayed by Europe and Washington.”
So “drill, baby, drill,” they conclude, “and make the world a safer and more peaceful place.”
But cooler heads should prevail and throw cold water on anyone suggesting urgency on overhauling domestic American energy issues as a result of immediate global events.
Lifting the crude oil embargo in place since 1975 would be a tide-shifting move for the U.S., cementing a fundamental shift over the past decade towards energy independence through hydraulic fracturing in formal state policy. Keystone, as contentious a continental energy project as any, may not be “game over for the climate” as NASA’s James Hansen suggested, but it will have long-lasting upstream environmental impacts. And it is still under White House consideration.
Likewise with coal. The Daily Mail states West Virginia rakes in $7 billion in coal exports annually, much of it – 25 per cent of all U.S. coal exports, in fact – making their way to China, South Korea, India and Japan. But U.S. coal consumption has flatlined around 120 million tonnes burned annually for the past few years, according to the U.S. Energy Information Administration.
Despite 288 of the country’s 1,191 coal generation stations closing or being slated for closure since 2011, coal use is soaring in other parts of the world, increasing fears that whatever carbon dioxide is offset by coal plant closures in the U.S. will be more than offset elsewhere.
There is an opportunity for U.S. energy to play a positive role in lessening Europe’s dependence on Russian oil and gas in the long term, but it should not come at the expense of local and continent-wide concerns over the environmental concerns regarding fossil fuel extraction and fracking. And it certainly cannot happen on a timeline speedy enough to make a difference in the current geopolitical crisis in the Ukraine.
Friedman points out that any investment in liquefying natural gas for foreign sale must be “extracted at the highest environmental standards” in order to be reasonably considered as justification for boosting export volumes.
But even if the measures he proposed are not put in place before Putin’s play in the Crimea pans out, liberating U.S energy is a worthwhile idea to consider on its own, in its own time, leaving the country, as Friedman wrote, “stronger, with cleaner air, less oil dependence and more innovation.”