U.S. Energy Exports Can Improve Global Security

Andrew Garfield Senior Research Fellow, Foreign Policy Research Institute
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Global unrest reaches new heights each day. Despite sanctions and a fragile ceasefire, Vladimir Putin’s Russia shows no signs of ending its expansionist aggression towards Ukraine. And ISIL is wreaking havoc in Iraq and Syria.

The United States has a powerful tool for combating this chaos — but it has, up to this point, largely been underutilized.

That tool is expanding America’s energy exports. The United States is now the world’s biggest producer of oil and natural gas. Domestic production already outstrips domestic demand. And local producers are eager to sell the surplus in foreign markets.

Regulators should let them. American exports would displace energy sourced from rogue regimes in the Middle East and from Russia. Dramatically expanding our oil and gas exports would improve global order and deprive these dangerous players of the resources they need to continue supporting or waging their violent campaigns and promoting radicalization.

Lawmakers have taken some limited steps toward increasing American energy exports.

Earlier this summer, the House passed a bill with bipartisan support that would require the Obama administration to make a decision on the approval of liquefied natural gas exports within 30 days after it has completed environmental reviews.

Likewise, the U.S. Department of Commerce recently permitted at least two companies to ship abroad crude oil that had undergone minimal processing — a reinterpretation of 1970s-era policy that has the practical effect of relaxing the crude oil export ban enacted back then.

But Congress and the Obama administration can make the most of our abundant energy resources only with a blanket approval of exports of liquefied natural gas and crude oil.

Doing so would strengthen national security and allow us to use our energy resources to hit rogue actors where it hurts.

Take Russia, for example. Putin has made it clear that he’s willing to act in cold blood against his neighbors, but his ability to do so depends on Russia’s energy resources. More than half of the Russian government’s revenues come from oil and natural gas. Energy accounts for at least a third of its gross domestic product and more than 70 percent of its total exports.

So far, we’ve attempted to check Russia’s nefarious behavior by imposing sanctions. These haven’t proven particularly effective, in large part because Europe remains dependent on Russian energy sources.

The European Union receives over 30 percent of its oil and 40 percent of its natural gas from Russia. If these nations enact meaningful punishments against Putin, they’ll see their energy bills skyrocket — a hit their fragile economies can’t afford.

But, if the United States disrupts Russia’s energy market by embracing natural gas and oil exports, Putin will likely face a tougher united front against his policy of aggression. And by decreasing Europe’s dependence on Russian oil, our allies abroad will be less susceptible to that country’s political and economic instability and have the economic freedom to impose real sanctions.

As David Montgomery, the senior vice president of National Economic Research Associates, a global consultancy, explains, “Since energy exports are the mainstay of the still inefficient and lagging Russian economy, this is a penalty with teeth.”

Energy exports would help safeguard the United States and her allies against the instability in the Middle East as well.

Europe imports almost 40 percent of its oil from the Middle East and Africa. When the political turmoil in these regions disrupts oil supplies, Europe will surely feel the economic aftershocks. But, if European countries could import oil from the United States they’d be guaranteed a more steady oil supply at a more stable price.

Opening U.S. oil to the international market would also diminish the OPEC member nations’ ability to threaten international order via price and production fluctuations.

The United States also stands to directly economically benefit by expanding energy exports. Lifting the crude-oil exports ban alone could yield more than $15 billion in annual revenue for American companies by 2017 and create 964,000 new jobs.

By increasing our energy exports, the United States would put the squeeze on rogue actors bent on intimidating our allies. This is an incredible tool at policymakers’ disposal. They should use it.

Andrew Garfield is a senior fellow at the Foreign Policy Research Institute, where he works on national security.