U.S. Energy Production – Politics vs. Strategy
U.S. energy policy is U.S. energy politics. The fight for energy-producing states this election season demonstrated this feature. President Trump made a calculated all-out blitz for these politically essential states in 2016 and 2020 by targeting his messaging of unrestricted energy production policies to critical constituents. [i] The Democrat Party, always in a more precarious political position due to a broader base, attempted to thread the needle, moving between abruptly ending the fossil fuel industry and gently progressing away. Finally, deciding on $2T in spending as a middle ground between its constituents.
This phenomenon deviates from U.S. energy policy’s historical role, where political leadership from both parties would equate energy policy with national security. President Nixon declared an emergency after the oil embargo and increased domestic production programmes. President Carter looked to secure supplies by removing pricing controls, establishing a strategic reserve, and initiated the U.S. military’s force increase in the Gulf region.[ii] The first war in Iraq was partially justified as preventing Saddam Hussein from controlling an even greater share of the global oil supply. Similarly, the reactivation of the fifth fleet and regional basing and partnerships stem from these strategic calculations. Even as recently as President Obama, achieving energy independence from international vagaries was a central talking point of his clean and renewable energy policies. Despite different political bases and inherent beliefs, each approached energy policy from the point of strategic national benefit.
When tackling climate change, America would be wise not to put policy goals before a strategic approach, as demonstrated in the U.S. removal of Saddam Hussain. Here, a rush to achieve a “safer world” through removing several threats and the spread of democracy, all in one swift policy, demonstrates that having a policy goal of global change without a feasible and sustainable strategy to reach that goal can invite catastrophe.
Fortunately, the U.S. energy-producing states’ current importance to any presidential bid, the 50/50 divided in domestic politics, and a split congress offer the opportunity to implement an energy strategy over an energy policy. This is due to the current political conditions preventing either side from implementing a strictly partisan policy. Furthermore, the diverse options under any multifaceted and long-term strategy allow political actors from all sides to claim a moral victory and deliver results to their constituents.
Climate change is real. Unfortunately, so is Chinese and Russian aggression. The kernel of this strategic dilemma is that most U.S. steps to reduce carbon use also reduces U.S. and global security. While climate change will continue to impose itself on the word with strategic repercussions, so will Russia and China. China’s ability to use threats about trade to compel the E.U. in times of stress was successful, as the E.U. backed down in its reporting on China’s response to COVID. China also produced similar threats to cut off medical and pharmaceutical supplies to the U.S. Furthermore, their use of salami tactics to control trade routes, energy sources, and commercial fishing in national territory and control pieces of Europe will continue independent of climate change.
Decarbonization will be costly to the U.S. Every effort to impose restrictions will decrease the strategic risk of climate change but will increase the strategic risk imposed by China and Russia due to reduced U.S. economic capacity, global economic influence, energy independence, and reduce the energy independence of its allies and partners. There is also no guarantee that enduring these costs will achieve the objectives of ending or significantly reducing global warming due to China’s continual expansion of coal power plants and occupation of oil and gas fields in the South China Sea for potential exploitation. Furthermore, projected growth across India and Asia could additionally counter any feasible reductions in the U.S.
Advantages of the Status Quo: In 2019, the U.S. attained a greater degree of energy independence as it transitioned from being a net importer to a net exporter of crude and refined petroleum products. This accomplishment provides an economic advantage in revenue derived through market share, integration of world-class U.S. corporations into economies around the world, sustains a robust and dynamic economy that absorbs millions of immigrants and develops everything from the P.C. to one of the first the COVID-19 vaccine, and fuels a military that maintains global security. It also provides a hedge in the event of a great power or sustained conflict. Similarly, U.S. production capacity secures European economies and militaries as it allows for an alternative to global supply chains and dependence on Russia’s energy exports.[iii] Since oil and gas trade in USD, current arrangements help solidify the USD’s strategic advantage as the reserve currency and global finance provider. This latter fact is beneficial for countering an economically ambitious China attempting to ensnare smaller countries, as revealed in Sri Lanka’s loss of Hambantota Port, by creating new trade routes and an alternate reserve currency and financing opportunities.
Advantages of Opportunity: While the U.S. does maintain a current strategic advantage in the extraction-based world, this does not mean that a future of transition is devoid of similar strategic opportunities. The U.S. possesses several inherent strategic advantages, which it can lever in the quest to develop an answer to these problems. These include its capacity for research and development through its universities, defence and federal government initiatives, and iconic inventors in their garages. It also includes its business culture, cutting edge firm practices, entrepreneurship, and its flexible and dynamic investing ecosystem. Therefore, any path towards decarbonization can maintain some of the current advantages if it applies these strengths.
Treat Decarbonization like Disarmament: To prevent a strategic nadir, the U.S. can treat decarbonization like disarmament. Agreements such as the Paris Climate Accords, on their own, will only hurt compliers while increasing relative gains of countries savvy or cynical enough to join and evade or ignore commitments. While Xi Jinping was producing statement after statement about reducing greenhouse emissions, his party brought more new coal plants into existence, nationally and internationally, than the accords can potentially overcome. Alternately, as U.S. efforts to decarbonize increase consumers’ and exporters’ costs, reduce U.S. multinational firms’ capacity, and reduce core industrial capability and small businesses vitality, America’s rivals continue to decrease energy production and consumption costs.
Therefore, as the Biden administration starts to adjust the Trump trade war, realigns relations with China, and builds U.S. manufacturing and the post-COVID economy, an opportunity exists to create agreements that can balance these concerns and embed reciprocal actions over blanket U.S. reductions.
Secure Supply Lines: Long-term movement away from carbon dependence requires a move towards reliance on rare earth elements. While the federal government has taken steps to increase its reserves of these elements, no efforts exist to secure continued supply, especially in a national emergency or sustained conflict. The fact that Russia and China together can possess or control up to 90% of global supply, depending on the specific element, adds another security challenge that requires a solution before relying on renewables.
Fortunately, the potential for new exploration exists in the U.S., Australia, Africa, and Latin America. Similarly, other Asian countries besides China can provide a low-cost option in making these materials usable. Malaysia being one, where China’s attempt to dominate its port facilities and transportation infrastructure demonstrates the need to secure these chains. Ambitious exploration and exploitation can reduce the costs of extraction and open new supplies. Part of securing this access, against China’s attempts, could include setting up ventures between U.S. and host nation companies to address the exploration, mining, extraction, and transportation required to bring these items to market while keeping the process partly in U.S. hands. As any return on investment would be long-term and risky, the U.S. Government would need to play a role in funding, guaranteeing profits, and technology exchange. This model could also deliver structured and spill-over entrepreneurial, technology, and educational benefits to local businesses and populations through additional loans, infrastructure development, educational opportunities, and access to both global and U.S. markets and companies. It could provide a local and grassroots development model and an alternate approach to China’s state-centered and state empowering One Belt One Road initiative. [iv]
Develop Comparative Advantages at Home: Within the U.S., opportunities exist that play to America’s strength and ensure that decarbonization supports U.S. economic advancement. As renewables and batteries depend on a significant amount of rare earth elements and minerals, the government can use U.S. universities to start programs that will create technology that can extract minerals with cheaper methods. The government can also promote STEM education in these fields through subsiding education. The importance of the production of these components to national security provides an opportunity to bring advanced manufacturing back to the U.S. Although, achieving this remains complicated as production in the U.S. is more expensive than in Asia. Still, the government should examine expenses, including the cost of not controlling production, including diplomatic and military, associated with securing overseas supplies and use them in a calculation on onshoring.[v]
In the U.S., the election cycle, which seemingly is an almost continuous street brawl these days, limits politicians’ ability to implement longer-term and incremental solutions. Instead, they must execute the immediate option to meet their short-term political demands. Although, as the President and Congress wade through a divided government and country, the opportunity exists to trade short-term paralysis for a long-term strategy and implement a far-sighted approach to battling climate change.
[i] Guliyev, Farid. “Trump’s ‘America first’ energy policy, contingency and the reconfiguration of the global energy order.” Energy Policy, vol. 140, May 2020.
[ii] Painter, David. “Oil and Geopolitics: The Oil Crisis of the 1970s and the Cold War.” Historical and Social Research, vol. 39, no. 4, 2014.
[iii] Henderson J., Mitrova T. (2020) Implications of the Global Energy Transition on Russia. In: Hafner M., Tagliapietra S. (eds) The Geopolitics of the Global Energy Transition. Lecture Notes in Energy, vol 73. Springer, Cham. https://doi.org/10.1007/978-3-030-39066-2_5.
[iv] According to ideas proposed during conversations between Benjamin Flosi, Christopher Tynan, and John Huntsman (https://securitystudies.org/) from September-November 2020.
[v] According to ideas proposed during conversations between Benjamin Flosi, Christopher Tynan, and John Huntsman (https://securitystudies.org/)from September-November 2020.
Benjamin Flosi is a first year Ph.D. student at King’s College London and a Copy Editor at Strife.