The Politics of Energy, Part 1

...The Politics of Energy, Part 1…

The United States is blessed with abundant energy resources and can be energy independent if it chooses. 

How should the United States use its energy resources in the face of very real threats to its survival?

For example, people who have adopted the view that climate change is an existential threat to mankind have decided that fossil fuels must be abandoned. This view has become a religion, and though the science actually refutes the idea that CO2 is an existential threat, it’s become the mantra for imposing anti-energy policies harming billions of people around the world. 

Climate alarmists are the real threat to America’s prosperity and economic strength, not CO2.

At the same time, there are countries seeking to diminish or destroy the United States. 

China has embarked on a plan, described in the book, The Hundred Year Marathon, by Michael Pillsbury, to replace the United States as the leading power in the world, 

China, with its junior partner Russia, represents the true existential threat to the United States. A few other countries, such as Iran, are active kibitzers who would benefit from the weakening or destruction of the United States. 

Shouldn’t the use of America’s natural resources be determined by policies that protect the United States?

A three step energy strategy would allow the United States to protect its interests and foster freedom around the world.

• The first, and most important need is for the United States to become energy independent again.
• The second step is to establish regulations that enable and promote the safe development and use of reliable energy resources.
• The third component of any energy strategy must to build the infrastructure that supports the development and production of energy resources.

These three steps will then allow the United States to use its resources to foster prosperity at home and support its international interests. This means supporting those countries allied with us, while preventing China and Russia from creating allies among unaligned countries. 

The importance of successfully thwarting China’s expansionist efforts was demonstrated by the near intrusion of China into the security structure of southeast pacific nations, e.g., the Solomon Islands. That threat has not disappeared. Neither has the threat of China’s Belt and Road Action Plan, known as the new silk road.

Securing our allies is made more difficult by their adoption of net-zero carbon policies, which are antithetical to their self interests, as well as ours.

The fact remains, the United States has the resources to successfully counter our enemies and support our allies, assuming the United States has the will and the wisdom to discard net-zero carbon climate policies and has the backbone to provide leadership for the free world.

What are these resources?

• Of most immediate importance to American interests are oil and natural gas.
• Coal, which is being displaced by cheaper natural gas for power generation, is crucial to the making of steel and for supplying cheap energy to foreign countries.
• Nuclear power for generating electricity could play an important role in America’s energy mix, but must reduce its costs to be competitive.

Oil

Conventional supplies are available in the Gulf of Mexico and in Alaska. 

• While proven Alaskan reserves are 2.4 billion barrels (BB), undiscovered and economically recoverable oil off shore could be 24 BB according to the Bureau of Ocean Energy Management. In addition, there is undiscovered oil in the National Petroleum Reserve. 

Unconventional supplies are available in several areas of the United States.

• The Permian Basin is the premier oil producing area in the United States and is estimated to have over 46 BB of technically recoverable oil. And there are other areas that contain substantial quantities of oil. For example, the USGS estimates there are over 4 BB of oil available in the Bakken.

One researcher, the head of analysis at Rystad Energy, estimates the United States has the largest recoverable oil reserves in the world. He ranks the top three countries as follows:

• US 264 BB
• Russia 256 BB
• Saudi Arabia 212 BB

Natural Gas

Large quantities of natural gas are associated with the production of oil. For example, its estimated the Permian Basin contains 261 Trillion cubic feet (Tcf) of natural gas.

Other basins such as the Bakken, as well as Alaska, have large quantities of natural gas, but the premier location for natural gas in the United States is Appalachia.

The Marcellus, Utica, and Burket/Geneseo shale formations in Appalachia hold over 3,700 Tcf of natural gas which is more natural gas than in the ten largest gas fields around the world, combined. The Marcellus alone holds twice as much natural gas as the South Pars North Dome field in the Persian Gulf, heretofore recognized as the largest natural gas field in the world.

Coal

According to the EIA, recoverable coal reserves would last around 470 years.

Russian Oil and Natural Gas

The disposition of Russian oil and natural gas will be an issue as the world resolves the trade in fossil fuels after the invasion of Ukraine.

The amount of Russian oil that went to Europe and other western countries was relatively modest, at around 3.5 MMbpd.  

This oil is likely being absorbed by China and non-aligned countries, such as India, at discounted prices, as the oil trade is realigned.

Natural gas, which has been exported by pipeline to Europe, is a different issue.

If Europe actually stops importing natural gas from Russia, most of the natural gas will be stranded in Russia. Other than China, there are few countries where pipelines can be used for transporting Russian natural gas. Finding new customers to replace Europe will require Russia to build LNG export terminals, which is technically difficult and take two or more years to construct.

While oil can be quickly fed into the word market, it will take several years for Russian natural gas, currently exported to Europe, to be available as LNG on the world market. 

This delay will create shortages that will put additional upward pressure on the price of LNG, which can only be offset by new LNG export capacity in the US, Qatar and Australia.

Climate Change Shackles US Energy

The United States is blessed with abundant resources, and may have the largest oil and natural gas reserves in the world. But these reserves are shackled, locked in place, by net-zero policies.

What stands in the way of the United States establishing the three step energy strategy for confronting its enemies and supporting its allies?

Part 2 examines current government policies, and how they need to change.

 

Let others know about this article by using this link in an email https://bit.ly/3J5OnTc 

. . .

 

 

 

(321)