Murkowski, Warner want US ready to use energy abundance strategically

The US should better prepare itself to use its new energy abundance as a geopolitical tool by jettisoning obsolete policies and broadening access for potential overseas customers, two US Senators recommended.

“Look at the hot spots and all the volatility, and what are we doing from a military perspective? We’re reducing our strength with budget cuts,” said Lisa Murkowski (R-Alas.). “We recognize we’ll never have enough boots on the ground in all the places in the world that might merit some attention, so what other tools do we have? It’s the proverbial diplomatic toolkit, and energy is an important part.”

Mark R. Warner (D-Va.) added, “Because we have constraints on how we use our energy supply globally, we’re not doing as much as we could. Federal policy needs to catch up with more access to these resources. It’s an extremely important tool.”

The pair spoke at a July 30 Atlantic Council event to launch a new report, “Empowering America: How Energy Abundance Can Strengthen US Global Leadership,” which was prepared by the council’s Task Force on the US Energy Boom and National Security. Murkowski and Warner are the task force’s co-chairs.

Its key recommendations are to:

• Lift the ban on exporting US-produced crude oil, while retaining presidential authority to add restrictions when it’s in the national interest.

• Further lift LNG export restrictions, while preserving the environmental and safety review process.

• Conclude the Trans-Pacific Partnership and Trans-Atlantic Trade and Investment Partnership negotiations without restricting access to US energy exports.

• Support energy diplomacy and technical assistance.

• Combat global energy poverty by encouraging the development of affordable and reliable energy systems that include both traditional and renewable sources.

• Sustain research and investment into energy storage, renewables, carbon capture and storage, and other critical technologies.

• Consider ways to expand the collective energy security system to include more producers and consumers, especially China and India, which are developing strategic stockpiles, and trading partners with insufficient strategic stocks to address a supply disruption.

• Work with Canada and Mexico to use North American energy production and infrastructure to advance common security goals.

• Work with Europe, and within the North Atlantic Treaty Organization, to support allies’ energy security.

“This report focuses us more keenly on how energy and security are closely tied together. It’s a real achievement,” said Murkowski, who chairs the Senate Energy and Natural Resources Committee. “It represents what should be a bipartisan consensus that America should serve as a global leader on energy and environment.

“This is not an either-or proposition that you either have energy development or a safer environment,” she said. “They should be inextricably tied, and I have been working to achieve a bipartisan consensus on this in the Senate.”

Warner said, “We’re at this moment in time, not necessarily because we’ve taken the right policy steps in the past, but because of the energy industry’s technological innovations. Who would have thought a decade ago that we would have this kind of access to energy resources in America?

“There are still challenges,” he said. “We need to make sure we use [hydraulic fracturing] safely. We also need to make sure policies keep pace not only with economic demands, but also with national security components.”

Warner said he sees clear opportunities for the US to use its abundant energy, which includes alternative and renewable technologies as well as fossil fuels, to expand its global political influence.

Some early impacts

“I also think there will be challenges,” he added. “We’ve already seen how simply granting some permits to export LNG here is starting to rebalance some of Europe’s energy security needs, particularly to help our friends wean themselves off dependence on Russian oil and gas.”

Many visitors from foreign governments have said they would rather buy crude from the US than Iran, Murkowski noted. “I reminded them that this is not something that requires legislation,” she said. “The Commerce Secretary could work with the president to consider whether allowing a waiver of the ban in specific cases is appropriate.”

While she did not include it in the broad energy legislation she developed with Ranking Minority Member Maria E. Cantwell (D-Wash.), which the Energy and Natural Resources Committee hoped to conclude marking up later that day, Murkowski said she also was working to advance her separate bill which contains a provision ending the 40-year-old crude oil export ban (OGJ Online, July 24, 2015).

“If we’re going to limit ourselves on crude oil exports, we will tie our hands,” she observed. “The effort [to repeal the crude export ban] will move forward if sanctions on Iranian oil are lifted while we effectively keep them on our own producers.”

Warner said, “There may be opportunities to get the export ban lifted if someone is willing to make a trade, particularly if the industry doesn’t reflexively react. I think prudent, smart, thoughtful investors will be open to that kind of conversation. While I think it may be easier to sell this to the public with prices around $48/bbl, it might be harder for the industry. We should not miss this window of opportunity. We might not have another for several years.”

Contact Nick Snow at nicks@pennwell.com.

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