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Energy exports: Economics, not ‘national security’

The foreign-policy and “defense” establishment is nothing if not nimble.

As recently as a few years ago, it terrorized the citizenry with visions of impending catastrophes due to inadequate “energy security.” Today, it seeks to employ the nation’s oil-and-gas fecundity as a non-lethal weapon.

Testifying before Congress last year, The Rapidan Group’s Robert McNally noted that “after the energy, geopolitical and economic convulsions of the 1970s, our confidence in our domestic abundance and control shifted to apprehension about dependence and vulnerability. For the past 40 years, our foreign and national security policy planning has prioritized preparing against supply interruptions and price spikes, protecting Middle East oil fields from hostile control, and protecting the supply lines between the region and global markets.”

McNally described an architecture that is enormously expensive — in both dollars and blood — and entirely unnecessary.

The “oil crises” of the ‘70s were the result of poor decisionmaking right here at home. Price controls, taxes, a byzantine allocation system and drilling restrictions all contributed. And fears of foreign cutoffs were unwarranted. The Arab oil embargo of 1973 failed, and hasn’t been tried again.

In today’s energy reality, D.C.’s empire-builders can no longer deny that our hydrocarbon horde is limitless. The fracking revolution, so derided by Hollywood ignoramuses, has slashed “dependence” on foreign petroleum and natural gas, and the U.S. has reclaimed its position as an energy exporter.

The Wall Street Journal reported that on New Year’s Eve, the “first freely traded cargo of U.S. oil” in decades left Corpus Christi bound for Bavaria. A second tanker followed, bringing crude from Houston to Marseilles. More recently, Switzerland-based Trafigura announced plans to ship U.S. petroleum to Israel.

Natural gas, chilled to a liquid at -260° F, is outbound, too. As documented by Bloomberg, the LNG tanker Asia Vision “left Cheniere Energy Inc.’s Sabine Pass export terminal in Louisiana on [Feb. 24] with the first cargo of U.S. shale gas … . The tanker, carrying 3 billion cubic feet, is bound for Brazil.”

No longer locked into selling solely to the domestic market, oil-and-gas producers can boost their viability in a low-price era by pursuing customers abroad. That means plenty of jobs “created or saved.”

Great news, but it’s not enough for America’s empire-builders.

Exhibit A: Carlos Pascual, a career diplomat who once served as ambassador to Mexico. Lifting the oil-export ban, he advised Congress, “would increase U.S. leverage in convincing international partners to adopt policies that mirror U.S. interests in Iran, Russia, free trade and even the environment.”

Arthur Herman, a senior fellow with the neocon-nutty Hudson Institute, concurs. He views the exporting of petroleum as a tool “to enhance the energy security of long-standing allies like Japan and Britain, as well as relatively new ones like India or, to choose another likely candidate, Poland.”

Stephen A. Cheney, retired brigadier general of the Marine Corps, isn’t interested in the economics of LNG: “Ultimately, the most important reason to expedite export [of natural gas] is that it will help the national security of the U.S. and its allies.”

U.S. Rep. Joaquin Castro (D-Texas) sees exports to Europe as an effective weapon to poke the bear. Dependence on the Motherland, he averred, hinders the continent’s “ability to take strong positions against Russia’s transgressions.”

That’s music to the ears of American Petroleum Institute President and CEO Jack Gerard, who argued that if U.S. exporters “commit to our European allies that we can supply much of that energy need, they’re going to be more courageous in their ability to push back on Russians.”

But don’t overlook the “pivot to Asia.” Japan, Taiwan and the Republic of Korea import nearly all of their crude and natural gas. With Texas, Wyoming, North Dakota and Oklahoma providing a big chunk of their hydrocarbon needs, there’s a greater chance that the three countries will continue to hold Washington’s coat in its confrontations with Beijing.

“Ordinary people,” libertarian foreign-policy expert Justin Raimondo observed, “have no place in the grand designs of ideologues … . Their place is that of extras in mob scenes, as backdrop for the dramas enacted by gods and heroes, the rulers and self-appointed vanguard parties charged with enforcing and implementing the grand blueprint.”

It’s an admonition for U.S. oil-and-gas workers to seriously ponder. Their livelihoods, it appears, are susceptible not to the global market alone, but the scheming of those with an unbounded definition of “national security.”

D. Dowd Muska writes about government, economics, and technology. He lives in Corrales, New Mexico. Connect with him at www.dowdmuska.com or follow him on Twitter @DowdMuska.

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