International producers are keeping relations with the US strong despite its plunging crude oil imports as production from domestic tight shales climbs, research by 16 University of Texas at Austin master’s degree candidates found.
Overseas crude producers are quickly finding new customers in China and elsewhere, said Peter Marton, one of the participants in a year-long graduate course examining implications of unconventional oil and gas production technologies for US national security at UT-Austin’s Robert S. Strauss Center for International Security and Law.
“Common concerns about security implications are somewhat overstated,” Marton said during an Apr. 30 briefing at the UT system office in Washington, DC. “There’s a cherished idea by some that oil specially permeates US foreign policy. But even under the most optimistic domestic shale production forecast, the US still will import oil.”
During the public policy study, students worked on-campus and abroad to determine the impact of these new technologies on US diplomatic, economic, and military relationships with international partners. Team members traveled to Africa, Europe, and the Caribbean to conduct interviews with diplomats and subject matter experts for the project.
Four case studies focused on Angola, Gabon, Nigeria, and Trinidad and Tobago. All found that declining sales of crude oil and, in Trinidad and Tobago’s case, LNG since 2008-09 did not affect relations with the US. In some instances, they actually improved.
“Our research shows that energy trade does not drive diplomatic relations,” noted Katherine Wilshusen, another study participant who spoke at the briefing. “The shale revolution has strengthened the US position, but won’t necessarily change our foreign relations.”
Asked if a decision by Congress and the Obama administration to repeal the US crude oil export ban would change relations with other producing countries, Marton said, “On balance, we would add that many more drops to the global crude oil bathtub. The differential between Brent and West Texas Intermediate prices isn’t that big. I think our studies showed there’s more market resilience than many people believe.”
Foreign relations implications could be greater over a longer period, suggested Eugene Gholz, an associate professor in UT-Austin’s LBJ School of Public Affairs who led the project. “Different centers of power can emerge over a very long run,” he said. “Ten years ago, the concern was that oil production was heavily concentrated in the Middle East, where there was political instability.”
Gholz said, “In the long run, the trend now for the US is a shift away from a limited number of producing countries. If energy is on a list of the top 25 US security concerns, it could be No. 23 now.”
Rick Westerdale, policy analysis and public diplomacy director at the US Department of State’s Bureau of Energy Resources, said the study was detailed and objective, and could contribute to broader federal policies.
“We’re emerging from 4 decades of energy scarcity to an era of abundance,” he said. “We want to assure our domestic consumers, but we also care how other countries get their supplies.”
Contact Nick Snow at email@example.com.