Why Trump’s ‘Energy Dominance’ policy is ‘hugely’ bad for the country

Photo of Vladimir Putin and Fiona Hill, Moscow, November 2011
Vladimir Putin and Fiona Hill at 8th annual meeting of Valdai Discussion Club, Moscow, November 2011. Image: Brookings Inst.

Dr. Fiona Hill, former official at the U.S. National Security Council, specializing in Russian and European affairs, appeared as a witness in the November 2019 U.S. House hearings on the impeachment of President Donald Trump. During questioning from House members, the following exchange took place on the subject of hydraulic fracking:

Mike Conaway (R-TX): “Just that the fracking is a controversial issue within our nation. If we did away with fracking, the United States would not be in a position today to dominate the oil production within the world and would play into strengthening Putin’s hands with respect to the oil—”

Fiona Hill: That’s correct. And actually I’d like to point out that in November 2011, I actually sat next to Vladimir Putin at a conference in which he made precisely that point. It was the first time that he had actually done so to a group of American journalists and experts who were brought to something called the Valdai Discussion Club. So he started in 2011 making it very clear that he saw American fracking as a great threat to Russian interests. We were all struck by how much he stressed this issue and it’s since 2011, and since that particular juncture, that Putin has made a big deal of this.

Putin’s concern about hydraulic fracking was justified. By 2011 the U.S. had surpassed Russia to become the world’s largest producer of natural gas. By 2014 it had equaled and by 2017 surpassed Saudi Arabia to become the world’s largest producer of petroleum (See following charts).

Charts showing U.S. and Russian oil and gas production
Image credit: U.S. Energy Information Administration, Aug 20, 2019.

Donald Trump became U.S. President in January 2017. Speaking at a Dept. of Energy event (Unleashing American Energy) June 29, 2017, he told the crowd that “my administration will seek not only American energy independence that we’ve been looking for so long, but American energy dominance. . . . We will be dominant. We will export American energy all over the world, all around the globe.” (Whitehouse transcript).

To be clear, in Trump world, energy dominance means producing more oil and gas than any other country. It has absolutely nothing to do with renewable energy or the transition to it. Mr Trump’s speech was a message to the fossil fuel industry that Big Oil’s domestic and foreign concerns would be addressed. Here’s a partial list of what the administration is doing or trying to do to fulfill that promise:

♦ Eliminate regulations limiting pollution caused by extracting and burning fossil fuels. ♦ Open public lands to fossil fuel exploitation. ♦ Approve all oil and gas pipelines and criminalize opposition to them. ♦ Create new offshore oil leasing programs. ♦ Kill federal initiatives that promote energy efficiency. ♦ Use the power of federal departments and agencies to block or hinder the country’s transition to renewable energy. ♦ Use whatever means necessary to secure export markets for surplus natural gas and block foreign competitors accessing those markets.

Domestically, President Trump’s ‘Energy Dominance’ policy is a disaster in progress. The oil and gas industry’s mad scramble to ramp up production beyond market saturation (in defiance of environmental concerns) has nothing to do with sound business practices. Rather, it has everything to do with the industry’s fear of global warming — a problem of its own making — and the growing demands for limits on fossil fuel production. It follows that the industry’s real objective is to build into the economy as much infrastructure as possible (pipelines, gas-fired power plants, export terminals, etc.) in as short a time as possible, thereby delaying for as long as possible the inevitable transition to renewable energy.

As recently as 2016, official U.S. foreign policy was “to build and sustain a more democratic, secure, and prosperous world for the benefit of the American people and the international community”. Today, according to the Dept. of State, America’s foreign policy is “to advance the interests and security of the American people”. This diminished vision of America’s role in the world brings it into line with President Trump’s indifference to foreign negotiations more complex than your basic quid pro quo. His gullibility on the international stage has led to a series of incredibly incompetent foreign policy initiatives. It also accounts for his apparent belief that ‘Energy Dominance’ gives America exceptional leverage in its international energy dealings. As U.S. attempts to hobble Russia’s natural gas exports to Europe have shown, it doesn’t.

According to a U.S. government white paper titled ‘Russian Strategic Intentions’ (approved for release May 2019 by the Dept of Defense), President Putin is “adhering to a global grand strategy” which aims to: “Reclaim Russia’s influence over former Soviet nations; Regain recognition as a ‘great power’; Portray itself as a reliable actor . . . in order to gain economic, military, and political influence over nations worldwide . . .Key to Russia’s ‘grand strategy’ is the exploitation of the country’s vast natural gas reserves. Proceeds from gas sales to Europe and elsewhere provide the Kremlin with the funds it needs to continue pursuing its foreign policy objectives.

For Russia, competition from the gusher of American fracked gas, and U.S. efforts to export the surplus to Europe, translates into lost sales, depressed prices, and the need to extract and sell even more gas so as to stay ahead. Russia’s Nord Stream 2, a second 1,200 km pipeline linking Russia to Germany via the Baltic Sea, is intended to help the country do just that. The project is a joint venture between Russia’s Gazprom and several European energy companies. Allegedly concerned about Russian influence over Europe, the Trump administration has been trying to convince the European Union to pull out of the deal. For example, Bloomberg Dec. 17, 2019, reported that Secretary of State Michael Pompeo, during a visit to Poland earlier that year, said that Nord Stream 2 “funnels money to Russians in ways that undermine European national Security.” More to the point, Trump sees the pipeline as an obstacle to his dream of massive liquid natural gas (LNG) exports to Europe, never mind European security.

Map showing route of Nord Stream 2 pipeline joining Russia to Germany via Baltic Sea
Route of Nord Stream 2 pipeline between Russia and Germany. Source: Gazprom

Unimpressed by Trump’s ‘Energy Dominance’ policy, the Europeans have stuck with the Russian project (on the basis of price and convenience). Trump, in a fit of pique, imposed sanctions 21 Dec. on companies involved in laying the pipeline. But since the project is about 90% complete, sanctions will only delay the project, not stop it. Russia plans to finish the job with its own pipe laying ships.

Photo of Pioneering Spirit, Swiss Co. pipelaying vessel
Allseas (Swiss Co) pipe laying vessel ‘Pioneering Spirit’. The ship quit work on Nord Stream 2 following imposition of U.S. sanctions Dec. 2019. Image credit: Allseas

When the pipeline is finally completed, Putin will likely consider it a win. He’ll be wrong. Here’s the thing about dealing in fossil energy: while producers and users are dependent on each other, producers are more dependent on users than visa versa. Producers do all the heavy work. Users have options. They can stop using one fuel in favour of another on the basis of cost, or efficiency, or politics. Or they can switch from fossil energy to renewable energy whenever it becomes available. Producers on the other hand are stuck with what they can pull from the ground. More importantly, they must now contend with a fast approaching and overwhelming horror, the thing oil companies executives hate to talk about in public — global warming.

Atmospheric CO2 continues to rise unabated (see NOAA graph below). It reached a spring peak last year of 414.7 ppm, a record. The highest level reached during 800,000 years preceding the industrial revolution was 300 ppm. Any country that ties its future to the fossil energy business is making a big mistake. The U.S. and Russia are like two kids on a beach, each claiming to have built the biggest sandcastle, each trying to smash the other’s construction, both oblivious to the incoming tide.

Trump’s ‘Energy Dominance’ policy has done nothing to advance “the interests and security of the American people.” Rather, it has exacerbated global warming — an existential threat to all Americans — and turned the country into a fossil fuel pusher, one of many, all privately worried that renewables are going to put them out of business. Of course, as the old adage puts it, ‘it’s an ill wind that blows no good’ — Oil Company executives are laughing all the way to the bank.

Image from Keystone Cops film
Incoming Tweet. President Trump’s foreign policy team. Image credit: Keystone Cops

U.S. Senate Committee pushes oil industry’s antisocial LNG scheme.

Oil & Gas field, Midland, Texas. Photo credit: EcoFlight

How long can the fracking spending spree last?
— Houston Chronicle
headlineSept 14, 2018.

The answer to the Chronicle’s question is: for as long as investors have money to burn. Justin Mikulka, writing Dec 18, 2018, for Desmogblog, puts it this way: “Fracking in 2018 was another year pretending to make money. . . . Whether fracking companies are profitable or not doesn’t really matter to Wall Street executives who are getting rich making the loans that the fracking industry struggles to repay.”

Yet the industry is currently pumping more fracked gas than ever before. The market is swamped and prices are at or below break even (see “Natural Gas Prices Fall Below Zero In Texas” – Oilprice.com, Nov 28, 2018). And now there’s a push to liquify as much of the stuff as possible for shipment overseas to anyone who’ll buy it.

Speaking at a July 11, 2019 hearing of the U.S.  Senate Committee on Energy and Natural Resources on “The Important Role of LNG in Evolving Global Markets”, Nikos Tsafos, Senior Fellow, Energy and National Security Program Center for Strategic and International Studies (CSIS), said:

There is an oversupply of LNG on the market, leading to historically low prices in Europe and Asia . . .  Despite [these] historically low prices today, companies are betting billions to enable the next wave of LNG supply—and this wave will be far bigger, more diverse, and perhaps more politically complicated than earlier waves. . . . [There are an] unprecedented number of proposed LNG supply projects that might reasonably start construction over the next two year.

Since the U.S. Senate is controlled by Republicans, only people supportive of the oil and gas industry and its LNG subset were invited to give evidence at the Senate Energy Committee hearing. The talk was all about how best to promote the industry and take advantage of an imagined “window of opportunity” to strengthen its global competitiveness. There was no mention of global warming or the need to restrain the production of fossil fuels. This is how Steven E. Winberg, Assistant Secretary for Fossil Energy U.S. Department of Energy, summarized his testimony:

“Natural Gas has transformed our Nation and the world for the better. The increased use and production of natural gas has grown our economy, created countless American jobs, and made our air cleaner. Further, increasing exports of domestically produced natural gas to 36 countries around the world has given our allies a stable, reliable and secure source of clean energy.”

Here’s what’s wrong with that picture: Hydraulic fracking is a filthy business, it poisons the water table, adds greenhouse gasses to the atmosphere, and far from making the world better, it makes it bad (see below for specifics on just how bad); The people employed in the industry would be far more constructively employed in building the nation’s renewable energy economy; Natural Gas is not a stable, reliable, or secure source of energy, let alone a clean one — gas deposits are bound to become stranded due to the superior economics of renewables. And considering the political and social pressures surrounding climate change, “our allies” would be well advised not to get hooked on it.

Renewables are displacing fossil fuels. During this transition, the U.S. has more than enough natural gas to satisfy its current domestic needs. That’s what energy security means. The push to export LNG is not about energy security, or even about making money, it’s about building expensive infrastructure (pipelines, liquefaction plants, terminal facilities, etc) to keep the Oil & Gas Industry in business. Pitching the benefits of investing in this LNG boondoggle is Charlie Riedl, Executive Director of the Center for Liquefied Natural Gas. Here’s part of his testimony before the above mentioned Senate hearing on LNG markets.

“The U.S. is now home to four LNG export terminals in operation, six projects under construction, and seven projects that are permitted and awaiting Final Investment Decisions. There are another fourteen projects in the [Federal Energy Regulatory Commission] FERC queue. Each of these projects individually represents billions of dollars of investment in America’s energy future. . . . Technological breakthroughs in the oil and natural gas industry have unleashed an energy renaissance, establishing the United States as the world’s largest natural gas producer – and domestic production continues to grow. We have enough natural gas to supply affordable energy domestically for at least 100 years with current technology, as well as to significantly increase U.S. participation in the global market for LNG.” (my underlines)

Mr. Riedl paints a picture of a world living indefinitely on fossil fuels, a world much to the liking of the Oil & Gas Industry. He does not mention the impact of global warming or the Paris Climate Accord which calls for a sharp reduction in the total use of fossil fuels. The International Energy Agency’s ‘Sustainable Development’ estimate of World Energy Demand to 2040, shows no increase in natural gas consumption beyond 2020 (see post of July 6, 2019, titled Oil & Gas Industry aims to make global warming even warmer).

Witnesses to the Senate hearing, including Mr. Riedl, refer to natural gas as a clean fuel. It isn’t. Here’s how it compares to other fuels in terms of CO2 emissions:

Lbs of CO2 emitted per million BTU of energy: 
Coal (anthracite) – 229 Lbs
Gasoline – 157 Lbs
Natural Gas – 117 Lbs
Solar (wind or PV’s) – zero emissions

During its production cycle, natural gas also releases methane, a greenhouse gas 80 times as potent as CO2. Last month, the Trump Administration announced plans to weaken existing rules designed to curb the release of methane. That’s not all. Natural gas is routinely flared (burned off) or vented when emitted from wells drilled primarily for oil. The following table from Bloomberg News June 12, 2019, shows the amount of gas flared by certain companies operating in the Permian Basin oil field of Texas:

Table showing gas flared (as a percentage of gas produced) by oil companies operating in Texas
Gas flared (as a percentage of gas produced) by oil companies operating in the Permian Basin of Texas. Original source: Rystad Energy

An article in Bloomberg Businessweek Sept. 10, 2019, by Ryan Collins and Rachel Adams-Heard, contains the following passage: “Gas flaring globally emits more than 350 million tons of carbon dioxide equivalent in a year, according to the World Bank. . . . In the U.S., flaring accounts for an estimated 9% of the greenhouse gas emissions of the oil and gas industry. In addition, the practice spews particulate matter, soot and toxins into the air that have been shown to be hazardous to humans.”

Fracking natural gas is bad for the climate, bad for the country, bad for the world. The current scramble to increase — at any cost — LNG production and shipping, is nothing more than a hostile and antisocial scheme by the Oil & Gas Industry to prolong its own life by delaying an orderly transition to renewable energy. It’s an industry scheme that’s being eagerly supported by the Oil & Gas-dependent Republicans in Congress and their like-minded buddies in the Trump Administration.

Gas flaring. Image: Dallas Morning News