America’s Oil and Natural Gas Boom Continues To Reshape Foreign Policy

March 15, 2019 by HJ Mai
America’s Oil and Natural Gas Boom Continues To Reshape Foreign Policy
Mountains tower in the background as flames shoot from the flare stack of an oil production facility along Interstate 20 just west of Toyah, Texas on Nov. 1, 2018. (Ryan Michalesko/Dallas Morning News/TNS)

For decades, U.S. presidents have pursued energy policies aimed at reducing America’s dependence on foreign oil. The first commander in chief to achieve the goal of energy independence could be President Donald Trump, with the United States expected to become a net energy exporter next year. But in typical Trump fashion, that’s not enough. The new goal: energy dominance.

Spurred by America’s continuing oil and natural gas boom, the Trump administration is promoting the export of U.S. energy products all over the world, and along with it the country’s values and worldview. When the White House rolled out its new energy policy in June 2017, officials reiterated America’s need to become self-reliant.

“[An energy dominant America] means a secure nation, free from the geopolitical turmoil of other nations who seek to use energy as an economic weapon,” U.S. Energy Secretary Rick Perry said in 2017.

It’s a stance that can be traced across all administrations starting with President Richard Nixon during the Arab oil embargo in 1973. The main difference, however, is the focus of exporting energy and influence.

“An energy dominant America will export to markets around the world, increasing our global leadership and our influence,” Perry said.

The administration’s efforts have prompted billions of dollars in investments. Last month, Qatar Petroleum and ExxonMobil announced that they are investing in a $10 billion project to expand a liquified natural gas (LNG) export plant in Texas.

When Jean-Claude Junker, the president of the European Commission, traveled to Washington, D.C. last year in an attempt to ease trade tensions between the U.S. and the EU, he promised Trump that Europe would build more terminals to import LNG from the United States.

While it remains to be seen whether the EU will keep its promise, America’s energy boom has already had an impact on foreign policy.

“Policymakers from the State Department and other groups are much more outspoken these days about the leverage that they gain, or think they gain because of the rise of oil and gas production in the country,” Tim Boersma, a senior research scholar and director of global natural gas markets at Columbia University’s Center on Global Energy Policy, told The Well News.

While speaking to high level executives of the world’s largest energy companies and oil ministers in Houston on Thursday, U.S. Secretary of State Mike Pompeo said that America’s newfound shale and natural gas abundance would “strengthen our hand in foreign policy.”

As America’s dependency on foreign oil decreased, so did oil’s importance on foreign policy, Henry Nau, a professor of political science and international affairs at George Washington University, told The Well News.

Over the past several months, the U.S. has imposed strict sanctions on two of the world’s largest oil producers, Venezuela and Iran. Gone are the days when global oil prices dictated foreign U.S. engagement.

Despite the ongoing political and humanitarian crisis in Venezuela, which has the largest proven oil reserves in the world, the crude oil price has remained fairly consistent since November, ranging between $50 and $70 per barrel.

However, neither the state department nor the White House are in business of selling America’s fossil fuel resources, that’s up to markets and market actors.

“There can be a bit of a gap between on the one hand the rhetoric and on the other hand the actual influence that policymakers have on trade, which can be more somewhat more limited,” Boersma said.

On the other side of the Atlantic, the U.S. is trying to loosen Russia’s grip on Europe. Moscow is currently the largest exporter of oil and natural gas to the EU. Washington has publicly stated its opposition to the Russian NordStream 2 pipeline project and is still considering imposing sanctions to stop its construction.

“We don’t want our European allies hooked on Russian gas through the NordStream 2 project, any more than we ourselves want to be dependent on Venezuelan oil supplies,” Pompeo said.

The administration’s opposition of NordStream 2 is in line with its demand that allies should increase their defense spending, Nau said.

“Why should the U.S. protect Europe and station troops on the border with Russia, if its allies increase their dependency on Russian gas?” Nau asked.

America’s shale oil boom is barely 10 years old, and while nobody knows exactly how long it will last, it has and will shape U.S. foreign policy as long as the world economy depends on fossil fuels.

Nau, who served on President Ronald Reagan’s National Security Council, said: “Nobody should make the mistake and think oil is not important anymore, but it is less important than it used to be.”

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