energy – Medill National Security Zone http://nationalsecurityzone.medill.northwestern.edu A resource for covering national security issues Tue, 15 Mar 2016 22:20:28 +0000 en-US hourly 1 How the US energy boom shapes the world http://nationalsecurityzone.medill.northwestern.edu/blog/2015/08/03/how-the-us-energy-boom-shapes-the-world/ Mon, 03 Aug 2015 17:09:02 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=22863 The US has long used its economic prowess and military force to exert influence around the world. Now, a growing chorus of lawmakers, analysts, and industry insiders are pointing to another potential tool in the country’s foreign-policy toolbox: energy abundance. Continue reading ]]> Sen. Lisa Murkowski, R-Alaska, makes keynote remarks at the Atlantic Council on Thursday. (Mallory Hughes/Medill NSJI)

Sen. Lisa Murkowski, R-Alaska, makes keynote remarks at the Atlantic Council on Thursday. (Mallory Hughes/Medill NSJI)

WASHINGTON — The US has long used its economic prowess and military force to exert influence around the world. Now, a growing chorus of lawmakers, analysts, and industry insiders are pointing to another potential tool in the country’s foreign-policy toolbox: energy abundance.

US oil and gas production is booming, new wind and solar plants are coming online in record quantities, and enhanced efficiency measures are helping Americans use energy more wisely. It’s why some are pushing to overturn decades-old laws that were designed in an era of scarcity and uncertainty. But not everyone is on board – some worry that opening up US energy to outside markets exacerbate the environmental impact of fossil fuels and increase the country’s exposure to volatile global markets.

At the center of the debate are the laws that limit US oil and gas exports.

This week, Sens. Lisa Murkowski (R) of Alaska and Mark Warner (D) of Virginia called for lifting the current ban on crude oil exports as a way of modernizing US energy laws and maximizing the benefits of the nation’s energy abundance.

“I don’t think anyone could have predicted a decade ago that we would have access to as ample resources we do today,” Sen. Warner, said at the Atlantic Council on Thursday.

As co-chairs of the council’s Global Energy Center’s task force, the senators released a report focusing on the US energy boom and its impact on the US as a global leader.

It came just before the Senate Energy and Natural Resources Committee approved a bipartisan energy bill, cosponsored by Sen. Murkowski, the chairwoman of the committee, and ranking member, Maria Cantwell, (D) of Washington. The legislation would permit crude oil exports and speed up liquefied natural gas (LNG) exports.

“LNG exports, pipelines, regional perspectives, modernizing the strategic controlling reserves, improving the energy security of our closest allies,” Murkowski, said, “This is what we can do when we view energy as a strategic asset.”

The US produced nearly 14 million barrels of oil per day in 2014, compared to just 8 million barrels per day in 2005, according to the US Energy Information Administration. But it exported only 346,000 barrels per day because US policy prohibits crude oil exports except in limited cases.

“Collectively, these recommendations move the ball down the field as they provide the US with some economic leverage when negotiating with various partners around the world,” said James Koehler, an associate director at Berkeley Research Group and an energy finance, policy and markets expert.

If the US were to allow more energy exports, Mr. Koehler said, leverage at the negotiation table could be stronger.

“Because we have constraints on our energy supply and usage, we’re not able to use this tool as effectively as we can,” Sen. Warner said.

The 40-year-old ban on crude oil exports was put in place in the 1970s in the wake of the Arab oil embargo, which sent shockwaves through the global economy. The ban remains in place today, albeit slightly modified.

Warner added that it might be hard for the domestic energy industry to see the value of international trade. The implications of lifting the ban are uncertain, though some experts predict downward pressure on domestic prices if US oil begins to flow more freely across the globe.

“As commodities like oil are fungible, the WTI-Brent spread [which provide benchmarks on crude oil prices] will likely shrink and price impacts could be a more regional, short-term issue as we change some of our policies,” Koehler said. “But because gasoline is benchmarked off Brent, prices in the long term are likely to equalize based on market conditions and outlooks.”

Technological innovations in the American economy, and in the energy sector in particular, have advanced energy production and reduced greenhouse gas emissions, but there are still environmental challenges, especially at the local level.

“Increasing America’s energy outlook and at the same time not stepping back from our commitment to take on the very real threat of climate change are in no ways contradictory,” Warner said. “I think those can both get done.”

Lee Stewart, a member of Beyond Extreme Energy, a group dedicated to limiting permits for fossil fuels and promoting clean energy, is concerned with the environmental impacts that energy production, especially fracking, has on the local community.

Mr. Stewart said the scientific case for keeping fossil fuels in the ground to combat climate change has been trumped in the minds of some legislators by the energy boom, which he argued only brings short-term gain and economic relief.

Matt Sagers, a managing director at IHS Energy who contributed to the report, said the issues are not black and white.

“There’s no question in the senator’s [Warner] mind that global warming is a serious problem,” he said. “On the other hand, US energy is a key part in where we’re going.”


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Economic calculations vs. national security strategy in the East Asian oil market http://nationalsecurityzone.medill.northwestern.edu/blog/2015/06/11/economic-calculations-vs-national-security-strategy-in-the-east-asian-oil-market/ Thu, 11 Jun 2015 15:26:32 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=22463 Continue reading ]]> WASHINGTON- Less than a year ago, brent crude oil, the international benchmark, was around $115 per barrel. Today, it’s $65.32 a barrel.

And the oil industry continues to be volatile due to unconventional oil production, geopolitical conflicts and oil sanctions on Iran, according to an April 2015 report by OPEC, the Organization of the Petroleum Exporting Countries. The major actors in East Asia- Japan, China, South Korea and ASEAN, which are all heavily dependent importers of oil from the Middle East, should temporarily ease the historic friction these nations harbor, for the sake of their economies.

“Asian policy elites are putting up this one-way firewall to politicians separating economic calculations on the one hand and national security strategy on the other,” said Van Jackson, a visiting fellow at Center for a New American Security.

For example, the relationship between Japan and South Korea has been tumultuous. In World War II, the Japanese government colonized the Korean peninsula and exploited South Korean women as comfort women, which the Japanese government currently minimizes, according to the Council of Foreign Relations records. The tense relationship continues today.

Despite the lack of trust, intensifying competition and historical rivalries, their paradoxical warm economic relationship and frigid geopolitical tensions allows for burgeoning trade relations. The multidimensional issues relating to energy include both economic and security, and are extremely complex and multi-faced.

Experts convened at the Atlantic Council last month to discuss new strategies to establish a stable oil infrastructure, despite uncertain global energy markets and unstable relationships.

Edward Chow, a senior fellow at the Center for Strategic and International Studies, said East Asian countries avoid collaborating with neighboring states that also need oil, and instead pivot toward the Middle East to buttress their economies.

However, their dependence on imported oil became a concern when the oil market in the Middle East quivered from civil unrest.

Without their market, Asian countries would struggle in producing enough energy.

In order to address oil volatility, Jackson argued that these nations shouldn’t solely depend on the Middle Eastern oil market. Instead, they should yield historic tensions as bygones for the sake of economic prosperity.

Last year, China passed the United States as the largest net oil importer in the world, heavily importing from the Middle East, according to the U.S. Energy Information Administration. Japan is the third largest net importer of oil globally, behind the United States and China, and has limited domestic energy after its Fukushima plant incident.

“Japan and Korea have both made explicit their intention to diversify away from Middle East imports in favor of U.S. imports to the extent that they can,” Jackson said. “So the U.S. is the supplier of choice for both Japan and Korea, and they’ve put their money where their mouth is to some extent.”

However, Asia’s demand for oil is so high that optimistic projections of U.S. export capacity may not be capable of eliminating their dependence on Middle East oil, he said.

Experts agreed that there needed to be an interconnected regional energy infrastructure among Asian countries.

The reason this hasn’t occurred is because geopolitics and historical tensions trump market incentives and collective interests.

“My concern is that whatever optimism there is on the horizon,” arising in Japan and Korea energy security, “that optimism is taking place within a context of Asian nationalism, pervasive mistrust, and strategic and military competition,” Jackson said.

As oil prices have marginally rebounded this year, both countries’ energy strategy plans encourage their respective companies to increase energy exploration and development projects around the world, according to the EIA.

“Japan and Korea are more of a litmus test for what is possible for the entire region,” Jackson said. “If Japan and Korea can’t cooperate for a common energy problem that they have, I don’t know what hope there is for the region.”

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Natural gas for national security? http://nationalsecurityzone.medill.northwestern.edu/blog/2010/06/07/natural-gas-for-national-security/ Mon, 07 Jun 2010 21:17:44 +0000 http://medillnsj.org/?p=2228 Continue reading ]]> WASHINGTON–National security is T. Boone Pickens’ primary reason for coming up with a plan to end America’s dependence on foreign oil, specifically oil from the Organization of the Petroleum Exporting Countries.

The U.S. imports 12 millions barrels of oil a day and five million come from OPEC, and the oil tycoon believes that makes the United States essentially a financier of terrorism that emanates from oil-producing countries in the Persian Gulf and elsewhere.

“We are paying for the Taliban by purchasing oil from OPEC,” Pickens said. “That’s the oil that I am focused on.”

Pickens, founder and chairman of BP Capital Management, spoke at a town hall meeting at the National Defense University in Washington on May 19. He spoke to a crowded room about the “Pickens Plan,” and focused on the importance of converting the nation’s fleet of 18-wheelers from diesel to natural gas.

In 1970, the nation imported 24 percent of the oil it used. Today, it imports more than 65 percent, according to Pickens. Fifty-seven percent of all oil consumed in the U.S. is imported and 70 percent of all oil consumed in the U.S. is used for transportation, according to the U.S. Energy Information Administration.

In his speech at the NDU, Pickens alluded to an April 15 Wall Street Journal article by the former director of the Central Intelligence Agency, R. James Woolsey, stating it as a good description of why our dependence on oil is a security issue.

Woolsey writes:

“Oil profits enhance the ability of dictators and autocrats to dominate their people. This is one reason that eight of the top nine oil exporters (Norway is the exception) are dictatorships or autocratic kingdoms, as are virtually all of the 22 states that depend on oil and gas for at least two-thirds of their exports.”

Richard Andres, energy security policy chair at the National Defense University, also said in an interview that countries that are most dependent on oil for income are often dictatorships. His concern is the enormous amount of money we are sending to these countries. In 2008, the U.S. spent $475 billion on foreign oil.

“Many of those countries are very vocal about their disagreements with the U.S. and are using the money to fund military– often indirectly to fund terrorists groups,” Andres said. “By relying on foreign oil, the U.S. is supporting both sides on the war on terror.”

Pickens described how his plan to convert the eight million 18-wheelers, buses, delivery trucks and utility vehicles to run off of natural gas would cut the nation’s dependence on OPEC oil in half. Nearly 33 percent of every barrel of oil we import is used by 18-wheelers moving goods across the country.

“Any vehicle which returns to the “barn” each night where refueling is a simple matter, should be replaced by vehicles running on clean, cheap, domestic natural gas rather than imported gasoline or diesel fuel,” Pickens states on his website PickensPlan.org.

Some question Pickens’ motives, since he is the founder and largest shareholder of Clean Energy Fuels Corp., the biggest provider of natural gas for transportation needs in the U.S.

The Pickens plan is a part of the Senate climate bill introduced by Sen. John Kerry, D-Mass., and Joe Lieberman, I-Conn., earlier this month and Pickens said his part of the plan has bipartisan support.

North American has at least a 120-year supply of natural gas and that supply is growing, according to a June 2008 study by Navigant Consulting.

“The only way to solve the problem is to get on your own resources. It’s the only way. Either that or quit driving,” Pickens said. “I like wind, solar, but they don’t move vehicles.”

He explained that he would like to see more electric cars on the road as well, but he is pushing for 18-wheelers because they are too large to run off current battery technology.

Ron Bengtson, the founder of American Energy Independence, said that the Pickens Plan will not deliver since personal vehicles will not be able to run off natural gas. You can get an automobile converted to run off natural gas, he said, but currently there are no filling stations.

“What we really need in place is not to shift from gas to natural gas,” Bengston said, “but to have existing gas engines run on alcohol fuels.” He added that there are many other options besides corn ethanol, such as methanol.

Andres said that the military is already taking steps to run off of alternative fuels. He said that the military has certified all aircraft in the Air Force and half of the Navy fleet to run off of alternative fuels.

“No one has the money to be first mover in industry to take on new expensive fuel or alternative technology,” Andres said. “But if the military can start those industries moving, the prices will drop radically once the technology is ready.”

Andres supports Pickens’ idea to convert 18-wheelers and other heavy vehicles to natural gas. He also said algae biofuel is very promising as an alternative fuel.

Pickens criticized Barack Obama and other U.S. presidents in the past 40 years for not coming up with a solid plan to end our dependence of foreign oil, warning that China already has a plan. Pickens has spent millions of his own dollars promoting his plan.

“I am really truly inspired by Pickens on his own, trying to push through something that in the end is good for the country,” Andres said. “This requires a visionary, someone outside the beltway who is not worried about getting re-elected.”

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