All over the world, as populations and economies grow, the thirst for energy — especially fossil fuels — continues to rise. And those nations with abundant natural gas, oil and coal reserves have a marked advantage over others struggling to harness their energy potential or lacking recoverable resources altogether.
These emerging nations are forced to buy energy off a global market that, more and more, is controlled by totalitarian regimes that could potentially use their resources as a weapon. Specifically, nations like Russia, Iran and Venezuela have a history of shutting off, or threatening to shut off, natural gas and petroleum to nations that have fallen out of their favor. This triumvirate has the ability to freeze out any nation it chooses. And doing so could upset the fragile global marketplace leading to price spikes that would affect all consumers — no matter where they reside.
The United States is fortunate to be among the global leaders in proven energy reserves — and as such can act as a stabilizing force in the energy market, resulting in stronger foreign relations and economic growth here at home.
Second, recent discoveries of oil in the Bakken shale region of the Midwest, added to the existing oil offshore, along the northern slope of Alaska and throughout the nation have reset our domestic petroleum outlook in a positive way. Additionally, our Canadian neighbors are only behind Saudi Arabia and Venezuela in undeveloped oil resources.
Where the U.S. can play a significant role in the market is with refined petroleum products. Our refining capacity far exceeds that of any other nation in the world, but we need to get that raw material to our refineries. Expanding the Keystone pipeline system would do just that bringing an additional 800,000 barrels of crude from Bakken and Canada to facilities in Texas, Oklahoma and Louisiana. This ability to provide use-ready oil products like gasoline and other fuels would foster international cooperation while keeping jobs here in the U.S.
And third, we have more coal than any other nation on the planet and we’re becoming better at using it in more environmentally sensitive ways. Additionally, countries like Japan, the world’s second largest coal importer in the world, is looking to U.S. coal as a less expensive alternative to coal shipped from Australia and Russia, but our export potential is limited because of a lack of adequate facilities.
Currently, the administration is considering more than a dozen permits for liquefied natural gas terminals, several others for coal export terminals, and still others that would allow the Keystone pipeline to move forward. It’s important that the president and administration move beyond the consideration phase, and begin realizing the benefits that the nation stands to gain.
Some U.S. companies are concerned that more exports would lead to tighter domestic supply and higher prices. Economists disagree with this notion because the increased international demand would be offset by expanded domestic development. Naturally, that domestic development would also translate to more U.S. jobs and a stronger economy.
The president has the opportunity to leverage our nation’s natural resources and manufacturing technology to create new jobs and establish the U.S. as a hegemon in the world energy market. All he needs to do is approve the permits for LNG and coal export terminals and the Keystone pipeline and then let U.S. energy workers do the rest.
Will he? We will know soon enough.
Economides is a chemical and petroleum engineer and an expert on energy geopolitics. Currently he is a professor at the Cullen College of Engineering, University of Houston.