Energy boom: Good for U.S., but issues remain
America is approaching the 10th anniversary of the U.S. energy boom, which has transformed global energy and politics. The combined technologies of fracking and horizontal drilling have made it the world’s top producer of oil and natural gas, and the boom has cut foreign oil imports by more than half.
But what does the boom mean for U.S. security and power? That question is vital given possible American decline, rising challengers like China, climate change and a Trump administration that is unexcited about a green future.
The boom has increased U.S. power in several ways.
First, it has helped bolster America’s economy by boosting GDP, shoring up the national manufacturing base, generating jobs and drawing foreign investment. The boom has also helped lower oil and natural gas prices. That has moderated inflation, decreased the urgency of interest rates hikes by the Federal Reserve and given citizens more spending money.
Second, lower oil prices have also hurt the national budgets of upstart, energyrich countries such as Russia. That’s good because Russia is Exhibit A for global mischief. Moscow has regularly manipulated energy exports to coerce European countries. Rising American natural gas exports to Europe may help check such coercion. Qatar, the world’s top liquid natural gas producer, has also diverted exports to America to global markets, including Europe.
Third, over the past decade, the boom has enhanced America’s image as an innovative, can-do country. Such perceptions of power matter in world affairs, especially given talk of American decline.
Fourth, the boom gives America homegrown energy in the event of a major global crisis that disrupts foreign oil deliveries. Compare that to China which is scrambling for resources from the South China Sea to Africa. That gives America an underestimated edge over China in the hardscrabble game of global influence.
Fifth, other countries want American energy technology, which can yield Washington leverage. For example, Washington could help arrange for China to get such technology to exploit its gigantic shale gas reserves in exchange for enhanced Chinese cooperation on North Korea or other issues. America’s leadership needs to learn how to use energy to generate global cooperation.
Yet, while the U.S. boom has certain benefits, they are often exaggerated. For example, despite President Trump’s clash with Iran, he still wants to reduce the U.S. role in the Middle East, believing like many others that the boom can help free Washington of its policing role in the Persian Gulf. The boom makes that more likely, but even if America imported no oil, Persian Gulf oil disruptions would still spook global oil markets, pushing up oil prices for all Americans. And, historically, the weaker America is in the Persian Gulf, the higher the chance of an oil price spike.
But far more important, beyond the environmental hazards of fracking, the boom is distracting America from going green — from seriously developing alternatives to oil and coal. Sure, cheap natural gas is offsetting dirtier coal use, which is important, but the Trump administration appears to believe that fossil fuels are the best energy path to national power, failing to understand how going green is even more crucial to long-term security than producing more fossil fuels. Why so? Going green would help mitigate climate change, which most scholars see as one of the biggest global threats. Decreasing the use of oil would also make Washington less likely to go to war in the Middle East; would help stem oil-funding for terrorist groups; and would make us less vulnerable to oil price spikes because we would be using less oil in the first place. Such spikes have been associated with most recessions in the past 45 years.
Going green would also help the United States do something Trump should like: exploit the multi-trillion dollar clean energy economy of the 21st century. Just in the past year, numerous countries including France, Britain, China and even oil-rich Norway have said that they aim to eliminate the gas-powered engine in the coming decades. China is now leading the world in the development of alternative energies and even electric vehicle technology. Does the United States want to yield this gigantic market to Beijing, with all of the spin-off technological benefits and jobs? It’s not too late to change course.
The energy boom has boosted U.S. global power and serviced global energy demand, which is important because the world will remain dependent on fossil fuels for a long time. But America also needs to prepare for a greener future as well.