A post-Cold War world requires a pro-supply energy policy
by Paul Dabbar, opinion contributor
During the post-Cold War era, global energy interdependence increased, particularly with Europe. European countries, especially Germany, believed that economic interdependence with Russia would prevent conflict, and believed in philosopher Immanuel Kant’s theory about “commercial peace”.
Kantsaid that the spirit of commerce sooner or later takes hold of every nation and is incompatible with war. So Germany increased its purchases of energy from Russia, in part to balance the growing sales of manufactured goods to Russia.
In the recent past, Europe further increased its energy import dependency. Decisions were made, primarily for perceived environmental reasons, to reduce domestic supply options, including shutting down natural gas production in the Netherlands and nuclear power in Germany.
While this was happening, the U.S. pursued an “all-the-above” energy strategy. U.S. energy innovators in a wide range of technologies achieved significant successes, including oil and gas unconventional drilling, wind, solar, electric vehicles and liquefied natural gas facilities. U.S. government policy also supported this, including policies such as lifting the crude oil export ban, facilitating approvals for oil and gas drilling and infrastructure and renewables tax credits. These supply-side drivers encouraged significant private capital investments. These combined led the U.S. to achieve energy net exporter status in 2019, while concurrently achieving energy price deflation and reducing emissions.
Recent U.S. policy moves have pivoted toward environmental topics, including restricting oil and gas production and transportation, causing a reversal of these accomplishments. These shifts have contributed to significant inflation, not only in direct energy products like gasoline but also in other areas that have energy input, like food.
During those policy shifts, advocates for these moves said little about the near-term national security implications for the U.S. and its allies. These new policies included a new Federal Energy Regulatory Commission policy that makes it even more challenging to build pipelines and liquefied natural gas infrastructure, announced only days before the Russian invasion of Ukraine. These shifts run contrary to U.S. policy statements that the U.S. stands ready to support more European energy needs as a result of the invasion.
Russia and China have decided the post-Cold War global system is not attractive to them, and Russia’s invasion of Ukraine is a sharp turn into a new era. Russia has been exporting over five million barrels per day of crude globally, and 13 billion cubic feet per day of gas to Europe. This Russian energy posture and the current U.S. energy posture deficiencies create significant economic and national security problems for democratic nations.
The democratic world should absorb that this shift beyond its comfortable post-Cold War structure has occurred. And amongst other significant national security shifts, the U.S. should look at an even stronger pro-supply energy policy than the previously successful all-the-above efforts. The U.S. should support new energy technology research and development and deployment at a faster pace. It needs to reform restrictions on new energy supply and transportation, both reversing recent moves, as well as going even farther to accelerate all-the-above energy supply. The U.S. government across all agencies should encourage and facilitate private sector investments for all-the-above sources. And the U.S. and its allies need to aggressively move forward with agreements and infrastructure to allow countries to diversify their exposure away from Russian energy.
Finally, one important aspect of an enhanced all-the-above energy strategy, including oil and gas, is a realization that the U.S. can concurrently increase energy availability, reduce costs and reduce emissions. They are not mutually exclusive, and that was proven during the previous decade. The U.S. should continue to expand renewables and electrification up to their current technology limitations, which will free up even more energy for export.
The U.S. should shift back to a pro-all-the-above energy policy, as the world pivots to a new post-Cold War reality.
PaulDabbar is a Distinguished Visiting fellow at Columbia University’s Center on Global Energy Policy and CEO and cofounder of Bohr Quantum Technology. He is a former undersecretary for Science at the U.S. Department of Energy.