Can The United States Rule The (Energy) World?

Tyler Durden's picture

Submitted by Daniel J. Graeber of OilPrice.com,

Geopolitical crises in Eastern Europe have been met with calls in the United States to use energy as a foreign policy tool. With U.S. Energy Secretary Ernest Moniz asking the industry to make a stronger case, however, it's domestic policies that may inhibit energy hegemony.

"The industry could do a lot better job talking about the drivers for, and what the implications would be, of exports," Moniz told an audience at the IHS CERAWeek energy conference in Houston.

The Energy Information Administration said in its weekly report that gross exports of petroleum products from the Unites States reached 4.3 million barrels per day in December, the first time such exports topped the 4 million bpd mark in a single month.

EIA said the United States is a net exporter of most petroleum products, but crude oil exports are restricted by legislation enacted in response to the Arab oil embargo in the 1970s.

In January, Kyle Isakower, vice president of economic policy at the American Petroleum Institute, said reversing the ban would help stimulate the U.S. economy and lead to an increase in domestic oil production by as much as 500,000 bpd. Current export polices, he said, are "obsolete."

This week in Houston, Sen. Lisa Murkowski, R-Alaska, ranking member of the Senate Energy Committee, said oil could help reposition the United States as the premier superpower.

"Lifting the oil export ban will send a powerful message that America has the resources and the resolve to be the preeminent power in the world," she said.

President Obama can show "true American grit" if he acts quickly and according to precedent. If the ban is reversed, it will be for the benefit of the international community, she said.

Moniz, who said in December the export ban deserves some "examination," said he wasn't yet convinced the case had been made to open the U.S. spigot, however.

For natural gas, House Energy and Commerce Committee Fred Upton, R-Mich., said expanding U.S. liquefied natural gas exports could be used to contain Russia, which dominates much of the Eastern European gas market.

Russia caused a stir with its military response to the Ukrainian situation and Upton said Monday foot-dragging at the Energy Department on LNG exports was putting U.S. allies in Eastern Europe "at the mercy of Vladimir Putin."

The U.S. federal government needs to determine that LNG exports to countries without a free-trade agreement are in the public's interest. The United States doesn't have a free trade agreement with any European country and the current transatlantic agreement up for debate has been stymied by EU concerns over the National Security Administration's cyberespionage campaign.

A January report from the Center for a New American Security said the economic connection that would come from oil exports could manifest itself as "coercive political influence" in foreign affairs. Domestic policy, however, needs to be honed first before the U.S. tries once again to tip the balance of power overseas.

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quintago's picture

China took Africa. That was Europe's savior. That's why they are putting so much on the line for this.

Timmay's picture

Global warming libtards go apesh!t in 3,2,1.....

Flakmeister's picture

Naw...

It looks like you got the stupid angle covered very comfortably...

johnQpublic's picture

is this a god damn joke?

 

we import a shitload in one door, and they want to export ours right back out another door?

whats the goal here?

nine dollar a gallon gas?

El Vaquero's picture

It is bizzaro world.  Or retardo world.  Either way, it makes you want to get a little punchy with the cocksuckers, doesn't it? 

Headbanger's picture

Waddya mean "want to"??

 

zaphod's picture

This is why I don't understand why the US is not 100% hydro and nuclear. The newer methods are significantly cheaper and safer with no chance for run away reactions. Many smaller countries are around 80% nuclear just to reduce the energy risk equation. Seriously just dam up every river and build out nuclear plants for the remaining power requirement.

If the US was 100% hydro and nuclear we wouldn't have to station the army everywhere else in the world and try to control a NWO. Oh, I see the reason now, sorry just answered my own question.

 

Flakmeister's picture

Does nothing for transporation...

Oil = diesel = movement of goods

Flakmeister's picture

I have no idea what you are getting at, but the US refined petroleum products utilizing imported oil...

The US has ~17 mmpbd of refinining capacity while only producing ~7 mmbpd of "oil".....

DoChenRollingBearing's picture

True dat.  What is funny is that the USA is one of very few places that can refine the sour (with sulphur) and heavy crude from Venezuela, ha ha Maduro...

Flakmeister's picture

The largest refinery in the world is in India and it was designed from the get-go to process heavy sour....

But it is true that the gulf coast is home to the most complex refining hub in the world....

And it wants to be fed via Keystone so that the refined goods can be exported, tax free no less..

pitz's picture

Tax free, not true.  And Canadian and Bakken-derived Keystone oil, at best, displaces, but does not completely replace foreign imports.  Please stop spreading complete misinformation. 

Flakmeister's picture

You don't understand how FTZs work...

And nobody has ever claimed that Keystone would do any such thing...

Escrava Isaura's picture

pitz, sorry to say it: But you are the one that need to stop spreading misinformation. The ports are 'Tax-free' zone.

post turtle saver's picture

we import oil, refine it, export it as gasoline & diesel... because refineries...

what part of "fungible" is giving y'all so much trouble?

Errol's picture

johnQ, I don't think it's a joke, I think the article is propaganda in support of the lie that the US is about to become Energy Independent and Has More Reserves Than Saudi Arabia.  The various shale and tight oil plays are providing a temporary increase in US production until the sweet spots are all exploited, but the BAU interests would like to create a popular belief that this temporary uptick will last for decades and the US will be restored to its manifest destiny as Big Swinging Dick.

I also think the Narcicist in Chief will eat this shit up; because he is no match for Putin in strategic thinking, he needs some kind of blunt weapon so he can get his bully on.

Flakmeister's picture

What will Putin possibly gain that he did not already have 20 years ago?

Putin is trying to put Humpty Dumpty back together, simple as that...

The Ukraine is splitting in part because because he tolerated complete incompetence and kleptomania in the puppets he trusted to run the crown jewel of the FSU republics...

Hardly the mark of a great strategic thinker...

He is Mobuto with ICBMs....

Levadiakos's picture

Looks like he picked the wrong day to wear his see through leggings.

DoChenRollingBearing's picture

I promise I can put up a profitable solar farm down here in the Peruvian deserts for only $80,000,000.  Promise!  Honest!

Atomizer's picture

As long as you cross your fingers behind your back, we have a deal. I'll set up the insurance provisions to protect our losses.

DoChenRollingBearing's picture

No sweat!

1-800 GIMME MO

***

Zero Hedge members!  This is completely legit.  Wire us your money quickly (BTC and gold accepted too)!  Hurry, limited time offer!

Kirk2NCC1701's picture

These are all Red-Herring (false, misleading) arguments, because most people here STILL don't understand The Essence of Banking:  DEBT and Debt-based Currency.

Control the Debt, control the Debt-based Currency, and you control... EVERYTHING.

Russia has the LAST chance to "contain the US", i.e. keep the use of the Petro-Dollar from also becoming the defacto Gas-Dollar. 

Russia MUST demand that its gas be paid in GOLD, to stop and mortally wound the Petro-Dollar.  The US (Fed+Big_Oil) are using its MIC to front-run this whole situation.

Most sheeple, politicians and even most ZH readers and bloggers are blissfully unaware of this ultimate truth -- and would rather spout all sorts of funny, cutesy, sarcastic, BS, simple-minded, careerist or diversionary posts.  Sheesh!

CrashisOptimistic's picture

Gold has no value to Russian society.  So go back and re-design your strategy.

fooshorter's picture

If you have milkshake, and I have a milkshame, and I have a straw... There it is, that's a straw, you see?! You WATCHING!? 

And my straw reaches acrooooooooooooooossssssssss the rooom, and starts to drink YOUR milkshake

And I.

DRINK. 

 

YOUR MILKSHAKE

 

SHHHHHHHHHHHH

 

I DRINK IT RIGHT UP!!

Balanced Integer's picture

Great movie. Daniel Day Lewis is the shizzle whatever role he plays, and in whatever movie he plays it in. +1 for the There Will Be Blood reference.

SAT 800's picture

If the ban is lifted it will be to the benefit of the international community. Fuck the International community. I gave at the office. I want a benefit for us for a change; could we possibly get this idea across to the pinheads and UN operatives in Washington?

Atomizer's picture

Armed men in Crimea threaten UN envoy; Ban dispatches human rights official to Ukraine

http://www.un.org/apps/news/story.asp?NewsID=47281

Blue helmets withdrawal, seek well-being in the arms of brown shirts.

Beam Me Up Scotty's picture

"The U.S. federal government needs to determine that LNG exports to countries without a free-trade agreement are in the public's interest"

Meanwhile, there are shortages of LNG at home and people are paying through the nose to heat their homes.  How is that good for the economy?  Sure its good for the few LNG producers and a handful of shareholders, but for the masses who don't get any benefit from the stawk market, they get a good ass raping.

Flakmeister's picture

Yep.... how else can you make money on fracked NG unless domestic prices are brought in line with global ones??

johnQpublic's picture

they arent just talking LNG, theyare talking oil and distilates also

this is madness

Flakmeister's picture

And while the Midwest froze with propane shortages, they were exporting 400,000 bpd from the Gulf Coast...

Propane is counted as "oil" when it is produced, but it is not subject to export bans...

disabledvet's picture

lot of muni debt to pay off too.
And if the best we can do is "spend to create more debt" then the revenue will only come from production.

So sure...prices surge..."but the purpose is only to create more debt."
And shall we even start talking about Wall Street and "bailout tycoons"?
Meh.
Can't return to a gold standard soon enough.

Where's Crimea again?

cossack55's picture

Question:

 

How many torpedos does it take to sink a LNG carrier?

 

A- 1

B- 1/2 of one

C- a Zippo

D- a Bic

DoChenRollingBearing's picture

E- one bullet (50% W, 25% Ce, 25% La) moving very fast

agent default's picture

US is bankrupt.  Can't rule shit when bankrupt. 

Flakmeister's picture

Not even close....

But having oil priced in a currency that you can print is pretty impressive...

LawsofPhysics's picture

I was going to say, the U.S. has been doing this for 40+ years for christ's sake.

Kaiser Sousa's picture

and whats the average lifespan of every reserve currency til the present???

answer = tic, toc.......

Harbanger's picture

Petrodollar was part of the war booty after WWII.  The US$ reserve currency hinges on oil being sold only in dollars.  I suspect China and Russia are having some serious talks with the Saudis.

pitz's picture

Oil has never been "sold only in dollars".  Sellers of oil have always been free to ask for whatever currency they want, and have always been free to trade the US dollars received away for anything they want.  Formerly, the USD$ was a relatively stable store of value as the US had net exports, particularly in manufacturing.  But that era went away many years ago.

Harbanger's picture

"So long as OPEC oil was priced in U.S. dollars, and so long as OPEC invested the dollars in U.S. government instruments, the U.S. government enjoyed a double loan. The first part of the loan was for oil. The government could print dollars to pay for oil, and the American economy did not have to produce goods and services in exchange for the oil until OPEC used the dollars for goods and services. Obviously, the strategy could not work if dollars were not a means of exchange for oil. The second part of the loan was from all other economies that had to pay dollars for oil but could not print currency. Those economies had to trade their goods and services for dollars in order to pay OPEC". (David E. Spiro, The Hidden Hand of American Hegemony

pitz's picture

No, there is only a single loan, that of the oil producers investing in US dollars.  All other economies that imported oil did not need to, and completely voluntarily made the decision to invest in US dollars to buy the oil with.  Currencies are fungible.  Investing in the US dollar has always been, and always will be, a conscientous decision not forced by the markets.  Unless, of course, one wants to import US produced good and services, in which case, usually the US-based sellers demand US dollars for obvious reasons.

Harbanger's picture

What do you mean by conscientous decision?  Practically 100% of all petroleum sales throughout the World are denominated in United States dollars.  Forced by US/OPEC trade agreements.

http://en.wikipedia.org/wiki/Petrodollar_warfare

Tall Tom's picture

He is a troll whose intent is to waste your time. Oil Backed Dollars is common knowledge.

 

Furthermore the agreements stipulate that the OPEC Nations must finance US Deficits through buying a substantial percentage of our Bonds. And we agreed to commit our Military Forces to protect the OPEC Nation's Governments and Oil Fields from threat of invasion by other Nations. (That is why we went to War with Iraq to liberate Kuiwait.)

 

This is common knowledge. He is a troll or he is extremely ignorant.

Balanced Integer's picture

"He is a troll whose intent is to waste your time. Oil Backed Dollars is common knowledge."

I can easily see this argument being applied to man-made climate change "deniers."

Oh wait...

CrashisOptimistic's picture

Can you show us the text of these agreements that say this?

Tall Tom's picture

No. I will not waste my time. I have too many productive things to do. I am starting to fatigue of the trolls.

Flakmeister's picture

A more likely reason is that you are full of shit...