The most important benefit that could emerge from the U.S. domestic oil and gas boom may be the one least recognized so far: increased international peace and security.
The U.S. energy production expansion, which sounds like the result of federal policy, has been almost an entirely a state-initiated phenomenon. Indeed, in recent years, the federal government has denied, delayed, deferred, or slow-walked almost every effort to boost U.S. energy production, even as it claims credit for the current surge.
The state-led energy production effort has turned the U.S. into the largest producer of natural gas, and oil may not be far behind. While the U.S. ranks third and rising among the top 10 major oil and gas-producing countries, or at least three of them – Russia, Iran, and China, plus Venezuela (13th) – are totalitarian regimes. This fact creates serious problems for the U.S. and its allies, as well as for non-aligned countries that don’t want to be beholden to the whims and foreign policies of dictators.
The U.S. does not use energy as a bargaining tool to get what it wants from other countries. However, Russia, Iran, Venezuela, and to a lesser extent China do use “energy diplomacy” as a tool to buy regime support and funnel cash to nefarious efforts, including terrorism, political suppression, and international unrest.
Russia provides about a third of the European Union’s (EU’s) oil and gas needs and is entering the Asian markets. For decades, Russia provided energy at significantly below-market prices to financial basket cases like Cuba and the Soviet Bloc countries of Eastern Europe, which helped to keep those surrogates dependent while hiding the failure of their socialist economies.
But for at least a decade, Russia has been charging above-market prices and has even disrupted supplies in the dead of winter to nearby countries that did not have alternate energy purchasing options. That pricing strategy helped fund Russian engagement in international mischief and made Russian President Vladimir Putin more popular at home than he might have been.
Iran also has used energy as a bludgeon, even threatening to stop oil shipments through the Strait of Hormuz if Israel or the U.S. ever raises a hand against it.
The late Venezuelan strongman President Hugo Chavez used his oil money to prop up Cuba and to funnel cash to other socialist regimes and terrorists.
Many energy-dependent countries would like to be free of this oil and gas stranglehold to pursue their own foreign policy interests and alignments. The U.S.—that is, the states—can make that happen.
Creating surplus energy in the U.S. depresses the price both here and in other places and provides more options to the “energy captives” to break the energy stranglehold.
Energy surpluses allowed some EU countries to demand that Gazprom, which handles virtually all of Russia’s natural gas exports, cut some prices by about 20 percent—and reduced Putin’s bottom line.
This shift is not necessarily permanent; it depends on continued U.S. production and the ability to export some of that energy. Coal is easy; the bigger challenge is natural gas.
The U.S. must move forward with plans that will turn cheap and abundant natural gas into liquefied natural gas (LNG) for export. Private sector companies are pushing forward to make it happen—if only our federal government will allow it.
Securing an adequate domestic supply of energy is a national security priority; our economic and foreign policies should not be guided by the fear that an energy-exporting strongman will cut off our energy supplies.
Energy other options for energy-dependent countries would reduce the potential of outside domination, help dry up the coffers of countries that would harm the U.S. and its allies and dramatically increase U.S. manufacturing and exports.
If Russia, Iran, China, and Venezuela have no energy monopoly over their neighbors, they would have very little control and even less money. The states have the power to make that happen by implementing pro-energy producing policies. Washington will not take the lead, so states must. Producing and exporting U.S. energy may be the closest thing we’ve seen to a real “peace movement.”
Dr. Merrill Matthews is a resident scholar at the Institute for Policy Innovation in Dallas, Texas, and serves as the Policy Level Private Sector Chair for the Task Force on International Relations/Federalism Working Group.