Putin’s gift to America’s energy independence

The U.S. should seize this opportunity to step up energy production that will supply Europe, create millions of jobs, and billions in taxes and royalties, and ensure national security.

The ongoing crisis in the Ukraine stirred much public interest, and great lessons can be learned from Peter Glover‘s March 7 Breitbart.com article  –“Putin’s Real Great Game:  Energy Imperialism.”  Russia’s annexation of the Crimea and threats to the rest of Ukraine after Glover’s article makes it more important.

Energy supply has been a major player in world events since the start of World War II.  German expansion was auned toward the East, with the objective of gaining control over  U. S. S. R. Caucasus oil resources.  In June 1941, the United States, Britain, and the Netherlands embargoed oil to Japan because of aggression against China.  Japan had a 1-year oil supply and had the choice of giving in to these nations’ demands or securing oil sources in Southeast Asia.  The result was the December 7 attack on Pearl Harbor, simultaneous attacks on the Philippines and British Malaya, followed by attacks on the Dutch East Indies.  Within months, Japan had secured its oil resources and a brutal war left millions dead.

A later disturbance for the United States is the October 1973 Oil Embargoby the Organization of Arab Petroleum Exporting Countries, which disrupted oil supply and caused increased costs of gasoline, electricity, and natural gas.  The United States suffered economic malaise until the early 1980s.  Starting with President Nixon in 1973, a rallying cry for “Energy Independence” was proposed by all presidents without success.  Conflicts between proponents of increasing energy production and environmental groups protesting environmental degradation stalled development of America’s vast resources of fossil fuels–coal, oil, and natural gas.

The U. S. lacks pawns to be a leader in the foreign policy chess game–insufficient oil and natural gas production.  Years of neglect in pushing fossil fuel production left the country unable to assist allies in times of emergency.

Russia provides substantial natural gas, oil, and coal to Europe that gives it leverage in the Ukraine Crises due to Europe’s fear of energy supply cutoff.  The European Union has assisted in its servitude by resisting natural gas production by fracking and shutting down and curtailing future use of nuclear power plants.

The Ukraine Crisis is an example of future events until the United States develops fossil fuel energy production superiority.  The Ukraine Crisis–just as the 1973 Oil Embargo– is a great gift to stop the environmental movement’s eliminating fossil fuel production and insistence on relying on solar, wind, ethanol from corn, etc., as primary energy sources.  These renewable energy sources are of no consequence in the conduct of foreign policy.   Do we want peace and prosperity or “Green energy,” poverty, and the possibility of nuclear war?

To rectify this situation President Obama should immediately approve construction of the Keystone XL Pipeline.  Congress should pass laws to allow unfettered export of all fossil fuel energy resources–coal, oil, and natural gas.  Poland, Hungary, the Czech Republic, and Slovakia wrote the U.S. Congress  on March 6 asking for a loosening of U.S. export limits so that they can buy American natural gas and reduce their dependence on Russia.

Restrictions on oil and natural gas production offshore, in the West, and on Alaskan lands should be lifted and encouragement given the oil and natural gas industry to start production.  Professor Timothy Considine wrote in the Denver Post —  “Drilling on Federal Lands:  How The West Could Be Won Again” — that:… if the output on federal lands had matched that on private property, the economic benefits would have been significant.  I estimate that over the next decade, the region’s seven states — Wyoming, Utah, Colorado, New Mexico, Montana, Nevada, and Idaho — would gain between $9.5 billion and $26 billion in annual gross regional product, between $2.4 billion and $5.1 billion in annual tax revenue, and between 67,000 and 208,000 regional jobs.

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Little attention is given to the fact that oil production in the North Slope of Alaska has fallen from 2 million barrels per day in 1988 to 500,000 barrels per day in 2013.  Alaska now ranks fourth as an oil-producing state.  If oil flow through the Alaska Pipeline slows to 300,000 barrels per day, the oil may freeze and the pipeline may never be restarted.  Oil in Northern Alaska is stranded.  Steps should be made to allow oil production in a 2000-acre area of the 30,000-square-mile Alaskan National Wildlife Refuge  (ANWR).

Another impediment to fossil fuel development is the Environmental Protection Agency’s designation of carbon dioxide as a pollutant — a designation that should be abolished.  Carbon dioxide is an airborne fertilizer that increased plant growth over the past 50 years.  A recent report shows that the social benefits of carbon dioxide, for agriculture alone,  are estimated at $3.2 trillion from 1960 to 2012 and $7.9 trillion from 2012 to 2050.

Peter Glover’s article pointed out, “In the 1980s Reagan talked the Saudis into significantly boosting their oil production, effectively flooding the market with cheap oil. It is not widely understood that this move, resulting in a dramatic fall in the global oil price, led directly to the collapse of the Soviet economy and, ultimately, to the downfall of the Soviet empire.”  With a massive program to develop fossil fuel resources in the United States, Russia’s fossil fuel assets would be rendered impotent in a few years.

The people of the United States need to understand that the production of fossil fuels is a manufacturing process.  Production of 1,000 tons of coal, 330 barrels of oil, or 6 million cubic feet of natural gas is the same as producing a $30,000 car, 7,000 bushels of corn, or 15,000 two-dollar hamburgers.  Millions of high paying jobs are created, billions of tax and royalty payments are paid, and security and safety will increase for all our citizens.

President Obama’s January 28, 2014, State of the Union address declared“But the debate is settled. Climate change is a fact. And when our children’s children look us in the eye and ask if we did all we could to leave them a safer, more stable world, with new sources of energy, I want us to be able to say yes, we did.”

In a sense President Obama’s State of the Union remarks are right.  The Climate Change debate is over because there never was one.  How do you debate whether the sun rises from the East in the morning.  And we can leave our children’s children a safer, more stable world with abundant energy supplies–develop our vast resources of inexpensive fossil fuels–coal, oil, and natural gas.  Abandoning these resources by substituting renewable energy sources–that are uneconomical, unreliable, and difficult to produce vast energy amounts–leaves our children’s children a bankrupt nation unable to exert strength on global affairs.

Perhaps President Obama can have a vision that imparts wisdom and he reverses his job-killing and nation humbling energy policies.  In the future President Obama can truly say, “yes, we did.”

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About the Author: James Rust

James H. Rust is a policy advisor for The Heartland Institute, a retired professor of nuclear engineering, and an outspoken critic of unnecessary alarmism over man-made global warming. He funds several scholarships for students majoring in chemical engineering at Purdue University. He currently is delivering a talk titled “America's Failed Energy Policies and The Reason Why.”