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

How to sue Big Oil for money and win . . . maybe

Photo of judges hammer and money
Image: from NY Post

Last year (Jan 2018) New York City sued five major Oil & Gas companies — ExxonMobil, BP, SheIl, Chevron, and Conoco Phillips — for contributing to global warming and the resulting physical damage to city property. It asked the court to hold the oil companies liable for the damage they’ve caused, and award the city monitory compensation. But on July 20, 2018, the court dismissed the lawsuit in favour of the oil companies.

In dismissing the lawsuit, U.S. District Court Judge John F. Keenan, ruled that the city’s claims come under federal law involving greenhouse gas emissions that cross state lines, thus putting them under the jurisdiction of the Environmental Protection Agency (EPA). Problems associated with climate change, the judge said, should be tackled by Congress and the executive branch. In its brief to the Second Circuit Court of Appeals November 12, 2018, the city claims that Judge Keenan misunderstood the lawsuit. The appeal argues that the city did not ask the court to regulate emissions but, rather, to award the city damages on the basis of Public Nuisance, Private Nuisance, and Trespass, which, to a non lawyer, sounds pretty mild.

If Judge Keenan misunderstood the city’s lawsuit it’s because the city framed its 67 page brief around global warming as an international threat instead of what was intended, a limited and local demand for compensation. The titles of sections IV thru VIII in the brief give the flavour of the thing:

IV. Climate Change Impacts on New York City
V. Fossil Fuels Are the Primary Cause of Climate Change
VI. Defendants Have Produced Massive Quantities of Fossil Fuels—and Have Continued to Do So Even as Climate Change Has Become Gravely Dangerous
VII. Defendants Had Full Knowledge that Fossil Fuels Would Cause Catastrophic Harm
VIII. Despite Their Early Knowledge that Climate Change Posed Grave Threats, Defendants Promoted Fossil Fuels for Pervasive Use, While Denying or Downplaying These Threats

Within the brief, ‘greenhouse gas’ is mentioned 29 times, ‘emissions’ 46 times, ‘global warming’ 48 times, ‘climate change’ 100 times. On the other hand, the word ‘damages’ appears in the brief only 7 times. The impression given is that the city is afraid that the judge might not understand the situation unless provided with multiple reminders that global warming exists and that it’s a serious problem.

The fact is, the judge understands the issue very well. New York City framed its complaint in terms of global warming, an international problem that requires an international solution. The judge ruled accordingly. Fossil fuel companies are happy to defend themselves at the national or international level. They know how slow and ineffective national efforts to limit global warming are. They know how to influence those efforts so as to slow them down to a crawl. They even go so far as to promote placing taxes on CO2 emissions, knowing that that distances the production of fossil fuels from the possibility of direct control. It’s a tactic that also gets others to pay what  the oil companies should be paying.

If New York City’s lawsuit fails on appeal, it will show that the Nuisance and Trespass laws are not sufficient. What then? How can any city structure it’s climate lawsuits in such a way that the trans-boundary issue is sidelined?

Here’s my contribution to solving the puzzle:

1. The science linking fossil fuels to global warming , climate change, increasing damage from storms, drought, sea level rise, etc., is settled. Global Warming is happening now. The judges know it. The Oil & Gas companies do not deny it. They most certainly do not want to wind up in court fighting the science. They would lose. Instead, when sued for climate damages, oil companies fight back by attacking the lawsuit’s legal right to stand. There’s no need to stress the existence and effects of global warming when suing oil companies.

2. Even though oil companies have known for decades about the dangerous effects that result from the use of their products, they deliberately kept the knowledge to themselves.

3. New Yorkers generate pollution while engaged in manufacturing, transportation, electricity generation, day to day living, etc. The energy used in these activities includes fuels purchased from the oil companies. New York takes responsibility for the pollution it generates and is working to abate it.

4. As New Yorkers use fossil fuels purchased from the oil companies, carbon dioxide (CO2) molecules are released into the atmosphere. All of those CO2 molecules released by New York to date, remain in the atmosphere and will remain there indefinitely, doing their part in causing the atmosphere to heat up. Once in the atmosphere, those molecules that originated in New York cannot be controlled or regulated by any agency. 

5. The CO2 molecules released by New York from the fossil fuels supplied by the oil companies, add to the burden of CO2 molecules that have built up in the atmosphere over time from other sources. It follows that the atmospheric heating and consequent damage has increased by some measure due to New York’s use of those fossil fuels. To put it another way, if New York had not used any of those fossil fuels, the amount of damage inflicted on New York would be less by some measure (see item 7).

6. The oil companies learned in the 1980’s or earlier about the dangers posed by their products.  Had they behaved honestly and, at that time, informed New Yorkers about the dangers, it’s reasonable to assume that the city would have acted earlier to reduce its dependence on fossil fuels by at least 50% of what it is today. The oil companies should pay the costs flowing from that failure to tell the truth.

7. According to the U.S. Government Accounting Office (report dated Oct. 24, 2017), damage from Climate Change has cost U.S. taxpayers $350 billion over the past decade (2007 to 2017). When adjusted for population size, New Yorkers’ share of that cost was 2.6% or $9.1 billion. 

Considering all the above, how much money should the oil companies pay New York in damage compensation?

For the period 2007 to 2017 (see item 7), 50% of $9.1 billion = $4.55  billion in the form of a lump sum payment.

Since climate damage is ongoing, annual costs following 2017 will be one tenth of $9.1 billion = $0.91 billion per year (see item 7). Oil companies should therefor pay 50% of 0.91 = $0.455 billion per year starting in 2018. For how many years should the oil companies pay that annual amount. Idefinitely or until they go bust.

Photo of Verrazano bridge taken Oct 2012 during Hurricane Sandy
Verrazano bridge from Brooklyn waterfront, NYC, during Hurricane Sandy Oct. 29, 2012. Image credit: Carlos Ayala