Unlocking America’s Potential Energy

United States Shale gas plays, May 2011

Map of U.S. shale gas plays. May 2011, U.S. Energy Information Administration (Wikimedia Commons).

America is in the midst of one of the most significant energy revolutions in modern history. Due to the recent discoveries of vast reserves of shale oil and natural gas, the U.S. is in a position to become the world’s largest energy producer by 2015, surpassing both Saudi Arabia and Russia – combined. This momentum, however, can only continue if U.S. firms are allowed proper flexibility to explore, extract, and export shale oil and natural gas from U.S. territories. Government regulations covering drilling practices, such as fracking, must be re-examined and equitably altered such that energy companies may pursue their energy interests while satisfying environmental concerns. The energy revolution has critical implications for U.S. domestic and foreign policy with the potential to transform America’s economic prowess and energy self-sufficiency for years to come.

Current estimates for America’s resource endowment and extraction rates are very promising. Natural gas production is experiencing a momentous boom due to recent breakthroughs in unlocking natural gas trapped in shale. With these advances, shale gas production is forecast to increase from 42% of total U.S. gas production in 2007 to 64% in 2020. This level of growth is unprecedented, with the U.S. Government estimating there will be a 44% increase in total shale natural gas production from 2011 to 2040. With regards to oil production, the International Energy Agency predicts that U.S. oil production will rise to 11.6 million barrels per day in 2020, up from 9.2 million just a few years ago. This increase in oil production is orthogonal to trends in Saudi Arabia and Russia, which will see their production levels decline from 11.7 million to 10.6 million barrels and from 10.7 million to 10.4 million barrels, respectively. Leonardo Maugeri at Harvard has estimated that shale oil production alone could reach 5 million barrels per day by 2017. These statistics stand as a dramatic reversal from discussions in the energy community even 5 years ago when talk focused on declining fossil fuel reserves and the need to explore alternative forms of energy. Fossil fuels now dominate the energy game, and rightfully so.

Natural Gas Production from US Shales 2000-2013

Graph of natural gas production for U.S. shale plays. September 16, 2013 (Wikimedia Commons).

While sound environmental concerns do exist regarding shale oil and natural gas extraction, such as pollution of groundwater and the effect of mining towns on surrounding communities, they are often overblown. For example, in Pennsylvania only 3% of all wells were cited for flawed construction from 2008-2013. Fracking has been a successful extraction method since 1940, and new technologies – waterless fracking is a good example – have only made the process safer and more efficient. The most legitimate environmental concern associated with fracking has to do with the well casings that surround the fracking apparatus. Since fracking pumps water and sand into the ground at a high pressure, improperly made well casings and other sealants can crack causing leaks which pollute the surrounding environment. This problem could be solved by using stronger and properly fitted well casings. Simple environmental regulations at the state level requiring proper well construction, specifically emphasizing casings, could ameliorate many of the environmental concerns associated with fracking. There is also a surprising lack of publicly available data regarding the effects of fracking operations on the surrounding environment. Increasing the availability of this data by setting mandatory reporting requirements would fully inform nearby communities and government authorities. Fracking to extract shale oil and natural gas can be done safely; such has been the trend thus far. If a more relevant, simple, and fair regulatory regime were to be established by state governments, and perhaps the federal government, to address issues such as well casing construction and reporting requirements, fracking’s safety and efficacy would only be further reinforced. Regardless, fracking – as it stands today – is a no-brainer.

Fracking Site in Warren Center, PA 08

Fracking Site in Warren Center, Pennsylvania. August 23, 2013 (Wikimedia Commons).

Why is fracking already a no-brainer? Because the shale boom, which has been enabled by fracking methods, is having tremendous economic benefits for the U.S. Natural gas prices in the U.S. are some of the lowest in the world – half the price of gas in Europe and less than one-third the price of gas in Asian countries. Surging shale oil extraction has overloaded Gulf refineries and revived East Coast refineries. This increased supply is so shocking that domestic oil prices have lately fallen out of sync with global oil prices, and experts predict a U.S. oil “glut” if U.S. firms are not allowed to export crude oil. This abundance has critical implications for manufacturing in the U.S. Indeed, The Economist claims that the energy revolution is resulting in a “Factory North America.” This “Factory” is resulting in more domestic jobs across all industries, especially in the growing energy industry. Energy jobs in nearly every state have doubled since 2005. Some equate the fracking boom as being similar to a gold rush, with energy jobs offering high salaries for basic work in rural areas. David Petraeus seems to be on track when he claims we are about to enter the “North American Decades” powered by our new-found energy endowments.

While the macroeconomic benefits of America’s increased energy output are clearly tremendous, expectations for the average American consumer should be tempered. Though the price of natural gas has fallen in recent years due to our ability to tap into previously inaccessible shale reserves, the cocktail of booming transportation, a recovering economy, and rising exports have raised prices in the past year. In addition, the need for further fracking R&D is likely to drive costs up in the coming years. Shale oil is experiencing a similar phenomenon. Although the price of gasoline has fallen beyond global pricing levels in the U.S. for the short-term due to surging supply, the price of oil is determined on a global energy market and is projected to increase for the long-term as global demand continues to increase. The increased supply of natural gas and oil certainly has lowered costs for the American consumer for the time being, and will continue to do so when contrasted to an America without new-found energy reserves. However, Americans should not be expecting $2.00 per gallon gasoline prices anytime soon.

So what does this energy revolution mean for U.S. foreign policy? Many good things. America’s increased self-sufficiency will change the U.S.’ relationship with many other countries. Because of surging domestic supply, the U.S. will be less dependent on other nations for energy; in turn, this freedom will afford the U.S. greater flexibility in pursuing foreign policy interests because it will not be as constrained to secure energy resources abroad. Strategic relationships with nations such as Saudi Arabia and the United Arab Emirates are likely to change because there will be less of a need for their oil imports. Perhaps the U.S. will now be more forceful in advocating for democratic reforms within these non-democratic states now that it has greater autonomy on the energy front. In addition, the decreasing need to secure energy resources abroad may prevent the U.S. from becoming involved in regional disputes and conflicts to secure those interests.

America’s surplus of energy could also be an excuse for a more active role in foreign policy. America could gain more influence over other nations if U.S. firms are allowed to export energy resources. As we have seen in Europe, Russia’s domination of energy resources in Eastern Europe has enabled it to turn build new allegiances at the EU’s loss and expense. Consider the notable cases of Armenia and the Ukraine becoming part of Russian-led Eurasian Union. Please note that this author is not advocating for the U.S. to pursue an overbearing approach to energy exports like Russia, but rather a stable level of influence to help the U.S. realize its foreign policy objectives. If, for example, the U.S. could export to Central Asian states, it could gain more influence in the region and build a relationship that could allow these states to become closer to the West rather then being forced into a Eurasian Customs Union led by Russia. In a state like Japan, where natural gas sells for $17 compared to $3 in the U.S., greater exports from the U.S. could enhance a trade relationship with a major partner. Unfortunately, the U.S. is not reaping the benefits of energy exports because antiquated laws are in place that prohibit U.S. firms from exporting crude oil. In addition, the EPA has been very slow to grant export license requests for liquefied natural gas. These regulations are contrary to free market principles and concepts of free trade that America has advocated for since its inception. The U.S. government needs to allow U.S. firms to export and pursue their global energy interests more freely. The potential results of this policy change would provide more flexibility in U.S. foreign policy and would afford the U.S. even greater influence on the international stage.

Natural Gas Price Comparison

Comparison of natural gas prices in the United States, Japan, and the United Kingdom. September 30, 2011, U.S. Energy Information Administration (Wikimedia Commons).

This energy revolution will change America’s game, and for the better. Domestically, the U.S. will be more self-sufficient and experience the growth of an industry while boosting employment numbers (and therefore jobs) and observing lower energy prices. Internationally, America’s influence will extend to the importers of our energy, and there will be less dependency on other states for energy. These benefits, however, cannot be fully experienced under the current structure. State governments, and perhaps the federal government, need to formulate a simple and fair regulatory regime that will allow U.S. energy firms flexibility in fracking to unlock shale oil and natural gas while addressing legitimate environmental concerns such as well casing construction. The U.S. must also break its own barriers to exporting energy, such as the obsolete laws that currently prohibit U.S. firms from exporting crude oil from U.S. territory and the slow process of obtaining export licenses for natural gas. Only if these policy measures are implemented can America’s full energy potential be unlocked.

A Call for National Unity

Nick Kosturos at West Point

The author pauses for a photo while attending the Student Conference on U.S. Affairs at West Point. The topic for this year’s conference was “Navigating Demographic Flows: Populations, Power, and Policy”

Two weeks ago, I had the honor of attending the 65th Annual Student Conference on U.S. Affairs (SCUSA) at the U.S. Military Academy at West Point. In addition to allowing students and cadets to explore various topics regarding the theme of “Navigating Demographic Flows: Populations, Power, and Policy,” the primary purpose of this conference was to foster a better mutual understanding between cadets and civilian students, also known as a “Civ-Mil Relations.” The idea behind these exchanges is that in the future participants may find themselves working in government or business together, and this program would afford all participants at the conference a better understanding of military and civilian lifestyles. Indeed, healthy civilian-military relations are essential for a well-functioning civilian-led democracy, which is why these types of programs exist and receive government funding. For four days, I was granted a fascinating peek into West Point life, including living in the barracks with cadets, studying in the library, and dining in the mess hall. I became very close to my cadet hosts and other students attending the conference. I was deeply affected by the cadet lifestyle and the unique shared experience offered by the Academy. West Point, while certainly not a place for everyone, offers our generation many lessons about the importance of shared experience in the development of a strong national identity.

 

West Point is composed of a diverse set of cadets from all walks of life. They differ in socioeconomic status, gender, race, creed, age, professional/academic backgrounds, and many other factors. While some cadets had already served in the military as enlisted members, most cadets came to the Academy straight out of high school. I recall a conversation with one cadet where he noted the variety of backgrounds and personal beliefs found amongst Cadets at West Point, but that amidst this diversity there was a common denominator uniting all: a desire to serve. I did not realize how strong this common bond was until I witnessed day-to-day operations of the Academy and personal stories of many cadets.

Unlike students at a normal university, cadets at West Point are subject to a daily, rigorous training schedule that makes college final exam season look like a cake walk. Cadets must participate in an average of 6 classes per term – including mandatory athletics, be subject to daily inspections, and march to and eat meals together. And these are just a few components of regular term schedule. As each cadet enters West Point, he or she must survive “Beast,” a summer-long basic training program employing mental and physical stress tests to effectively weed out those candidates who are not fully dedicated to the Academy’s mission. Throughout their time at West Point, cadets who do not perform adequately or break the rules must endure severe reprimands. A common punishment is called “Hours,” which entails walking back and forth in the public square while holding a rifle or sabre for hours at a time (only “Firstie” cadets or seniors are allowed to enjoy the lightness of a sabre while completing their hours). I spoke with a cadet who had to make up 120 hours because of, in my view, a slight deviation from the rules! However, other cadets assured me that there exists a purpose to these seemingly mind-numbing tasks. At West Point, there is little oversight by commissioned officers or other professional staff. The hierarchical nature of West Point teaches cadets to first follow and then lead, with senior cadets or “Firsties” responsible for management tasks such as conducting inspections and running summer “Beast” training for new cadets. Freshmen cadets, or “Plebes,” complete the less glorious tasks, such as taking out the barracks’ trash or escorting civilians, like me, around Academy grounds.

Understandably, some cadets expressed their desire to experience a traditional college lifestyle. When I mentioned I was from USC in Los Angeles, a lot of the cadets humorously grumbled about the weather and college parties, and it became clear to me that some wanted a break from the strenuous life of a cadet at a military academy. However, I was equally, if not more, envious of the West Point experience. The unmatched traditions, dedication to a sense of duty and common purpose (including at least five years of mandatory service upon graduation), the stringent Cadet Honor Code, and perhaps most significantly, the incredibly strong bonds between cadets struck a deep chord with me. This unity and cohesion is something that I feel is missing from political culture and American society in general, especially among my peers.

At a time when U.S. demographics are rapidly shifting, the wealth gap continues to widen, and Congress and our political culture are seeing historic divisions, the importance of fostering a national identity has become ever the more critical to sustaining a strong societal fabric. It is important to understand what I mean by “national identity.” I firmly believe that America’s strength is drawn from the diversity of its citizenry, but this diversity must be woven together by a common thread if our strengths are to be channeled in the most productive manner possible. National identity is developed through actions such as teaching a national history and common language, developing national institutions and symbols like monuments in the Capitol region, and, most importantly, allowing for some type of a shared national experience.

In 2013, there does not seem to exist a shared national experience for my generation. The educational system in our country is very fractured, with some students attending charter schools, public schools, private schools, community college, universities, or no school at all. Unlike our parents and grandparents, there is no World War that must be fought and no common threat like the Soviet Union’s “Evil Empire” that must be defeated. Indeed, it seems as if major bipolar conflicts and common enemies have brought Americans together in the past. Abstract issues such as climate change and the Global War on Terror have not mustered nearly as much national unity when compared to previous historical events. While the information age and social media may prove to be more conducive to greater unity, these technological tools have proven to be both uniting and divisive on a global scale. Therefore, in the absence of a shared national experience, I believe it would be prudent for U.S. policymakers to entertain discussions exploring ways to develop a stronger national identity. Programs such as AmeriCorps, the Peace Corps, or mandatory military service could be used as inspiration for possible public service options. In addition, a thorough and long-needed re-haul of the public education system would also do wonders for shaping a meaningful national experience for youth. Regardless of the policy proposal, U.S. policymakers should always keep the issue of national identity and the utility of shared experiences in mind when developing civic policy, especially for legislation that impacts American youth.

There may be some who question the significance of national unity as the world becomes a small place through the auspices of globalization. However, as long as the nation-state remains the dominant unit of analysis on our planet, America’s national identity is critical to retaining a competitive edge in the international system. The West Point experience, while certainly singular in the sense of its rigor and military culture, reveals the benefits to be had from shared national experiences. This institution accepts youth from all backgrounds and transforms each class of cadets into a united group of individuals willing to serve for a cause greater than themselves. I have no doubt that some of the individuals I met at the conference are going to be leading this country in both the military and civilian realms in the near future, which comes as a comforting thought. The cadets’ shared experiences, sense of brotherhood, and devotion to service distinguishes them from other youth in an American society largely defined by apathy. My generation desperately needs a shared national experience to foster unity, patriotism, and a sense of civic duty. This unity will strengthen our national fabric while unlocking the full potential of the nation.

The IR Implications of the South Carolina Graduation Speech

There has been a slight stir in the headlines in the wake of a South Carolina High School graduation incident. Defying his school district’s newly-instituted policy of replacing the traditional prayer at graduation with a moment of silence, valedictorian Roy Costner IV tore his graduation speech to shreds and recited the Lord’s Prayer, proceeding to detail his passion for his religion and justify his opposition to the school district’s ruling.

The incident, perhaps worthy of immortalization by Hollywood (or at least the cast of Saturday Night Live), is indicative of one of the most salient features of American domestic politics in the Information Age: the so-called “Culture War” which pits the knights of tradition against the crusaders of progress. More practically, this ideological conflict is part of the latest in the all-American debate over national identity. At the moment, the most vocal factions seem to be those on the Far Left and the Far Right: the traditionalists versus the progressives, the religious versus the secular, the Tea Party versus the Occupy Movement, Fox News versus MSNBC, etc. Though it is tempting for individuals who identify with these factions to characterize the state of affairs to be an apocalyptic battle of Right and Wrong over the “Soul of America” (and indeed both movements have heritages deeply critical to the general American heritage) it is likely that historians in the future- perhaps a mere couple of decades from now- will describe them as general movements in a pluralist mosaic of interest groups and identities whose interactions drive the general historical development of the Republic.

Given that these movements are integral to the fractious fabric of contemporary American society, it would be prudent for the student of American foreign policy to understand them, if they would understand the relation of American domestic politics to American foreign policy. The movement which the South Carolina graduation speech case represents, generally, is the populist, conservative, religious, and traditionalist faction of American society which, in the present day, tends to vote Republican, support family values and small government, and support strong-armed (though not necessarily neoconservative) foreign policy measures.

The graduation speech case is a demonstration of the power of this faction in certain geographic areas of the United States. After the requests and complaints of church-and-state groups caused the Pickens County School Board to replace graduation prayers with moments of silence, the deeply religious valedictorian at Liberty High School chose to protest the policy by quite literally bringing prayer back into the ceremony. Many in the crowd cheered as he did so; and the school pursued no disciplinary action against him. Though there has been much secular criticism of the valedictorian’s action, equal numbers of the faithful congratulate and support him. Regardless of the moral or legal implications or consequences of the event, and whatever the moral judgment ought to be upon the student or the school district, the incident clearly shows that religious factions in South Carolina- and indeed, in the United States in general- are strong and numerous enough to wield great domestic political power. Given that elected politicians in the United States must respond to their constituents, this power must exert some effect upon American foreign policy.

In his excellent piece The Tea Party and American Foreign Policy, Walter Russell Mead explores how populist movements have affected foreign policy throughout American history. While he ultimately concludes that systemic constraints and strategic priorities have been more considerably important than domestic demands, Mead explores certain tendencies which populist movements- the Jacksonians, the Populist Party, etc.- have exerted upon foreign policy. Expansionism and protectionism (and isolationism) have been among these, and they have typically accompanied critical structural changes in American politics.

In the modern iteration, it is common to see the present generation of populist conservatives advocate strong, moralistic foreign policy and a general skepticism towards international institutions. Indeed, their great hero, Ronald Reagan, seemed to exemplify this approach to foreign policy, and many followed the neoconservative Bush regime into supporting the Iraq and Afghanistan wars (though, again, those involved more war fever, and it is dangerous to characterize conservatives in general as neoconservative.) The policy-making power of this faction, however, is checked by the existence of that large faction which tends to be more pluralistic, secular, and supportive of international institutions, which often votes along Democrat lines. This faction shall be examined in a later post; for now it will suffice to say that however powerful it is, it exists alongside that faction which is generally supportive of Roy Costner IV in that bipolar balance which has defined American politics, and affected American foreign policy, since the nation was born.