US foreign policy – 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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Kerry makes national-security pitch for trade deals http://nationalsecurityzone.medill.northwestern.edu/blog/2015/04/23/kerry-makes-national-security-pitch-for-trade-deals/ Thu, 23 Apr 2015 20:21:58 +0000 http://nationalsecurityzone.medill.northwestern.edu/site/?p=21573 Continue reading ]]> U.S. Secretary of State John Kerry (File Photo by Jennifer-Leigh Oprihory/MEDILL)

U.S. Secretary of State John Kerry (File Photo by Jennifer-Leigh Oprihory/MEDILL)

WASHINGTON — Secretary of State John Kerry placed the issue of U.S. trade agreements firmly in a national security context Thursday, saying two pending trade deals demonstrate how U.S. economic and national security interests are one and the same.

“In our era, the economic and security realms are absolutely integrated,” he told a room full of analysts and policymakers at an Atlantic Council event, making the case for the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, two sweeping trade deals being negotiated by the U.S. Trade Representative.

The Trans-Pacific Partnership would set rules for the U.S. and 11 Asian countries, which notably exclude China, by far the biggest economic force in the region.

“The idea is to put pressure on China and write the rules before they have a chance to write them first,” said Garrett Workman, associate director of global business and economics and Atlantic Council.

But many economists and Washington insiders see the move to couch these economic issues in a national security context as a way to make them more palatable to the mounting domestic forces that oppose them.

“They need to make this a national security argument,” said Dan Ikenson, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, “because the economic argument is falling on deaf ears in the Congress and in the more traditionally resistant arms of the Democratic Party.”

Perhaps the most resistant is organized labor, which has long fought the TPP and similar trade agreements that have come before, such as the North American Free Trade Agreement, which was passed during the Clinton administration to open trade with Mexico and Canada.

“When these kinds of agreements fail to make their case on economic grounds,” said Thea Mei Lee, a deputy chief of staff at the AFL-CIO, the largest federation of unions in the U.S., “the leadership tends to invoke these sorts of amorphous national security issues.”

Labor isn’t the only point of friction for the TPP, which is in its final stages of negotiation internationally but still has to make it through Congress once the trading partners have settled on the terms. The American dairy industry, which is being pressured to accept more dairy imports from abroad, is trying to offset this breach into their market share by exporting their own product to other countries.

“If Canada opens its dairy market to some extent and if the U.S. gets a good package from Japan, then the U.S. could lower its barriers to New Zealand,” said Michael Smart, vice president of Rock Creek Global Advisors, a consulting firm that works on trade.

Negotiators have many such wrinkles to iron out in the coming weeks, and the Obama administration will likely have to account for many more when the TPP comes before Congress, which is likely to happen in September or October.

But some participants foresee a longer timeline for the agreement.

Moderating a panel before Kerry delivered his address, Frederick Kempe, the president and chief executive of the Atlantic Council, set the tone for the discussion by telling an anecdote.

“I asked a someone who worked on NAFTA what it takes to get one of these things done,” he said. “The reply was, ‘You have no idea what you’re getting into.’”


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