EDITORS’ NOTE: This article has been updated since its initial publication.
Obama’s Russian “reset” was the first fatality in this week’s Crimean crisis. But another reset could transform Obama’s failed and forgettable administration into a foreign- and domestic-policy success. Liberating America’s energy potential could cure the multiple ailments that lately have fatigued and enfeebled the U.S.
• Obama immediately should approve TransCanada’s privately funded Keystone XL Pipeline and speed permits for other fuel conduits. For lack of pipelines, natural gas from North Dakota’s oil fields must be burned upon capture. Instead, it should be transported and harnessed.
• He should authorize oil production in a corner of Alaska’s 19-million-acre Arctic National Wildlife Refuge. This abundant 2,000-acre parcel
is the size of Washington’s Dulles Airport.
• Obama should boost fossil-fuel development on federal lands. This does not mean oil derricks in Yellowstone National Park. It does mean environmentally responsible oil-and-gas extraction from, perhaps, a fraction of 1 percent of the 42.3 percent of Wyoming or 84.5 percent of Nevada that the federal government owns.
This “drill, baby, drill” approach will increase oil and gas supplies and decrease their domestic and world prices. Merely announcing these steps will cut prices on futures markets. Delivering the goods will slash them even further.
This means sliding revenues for Russia as the value of its chief products — oil and gas — plunges. The Kremlin’s imploding income will become the leash that Vladimir Putin lacked around his neck as he invaded Georgia and Ukraine. U.S. gas exports also would reduce Europe’s dependence on Russia’s pipelines and curb Putin’s capacity to blackmail his neighbors.
“Our allies in Europe are eager for a reliable partner to enter the marketplace as a stable, secure source of natural gas,” said the American Petroleum Institute’s Erik Milito. “America is now the world’s leading producer of natural gas, which means that our liquefied natural gas (LNG) exports could significantly strengthen the global energy market against crisis and manipulation. . . . Unfortunately, the slow pace of federal approval for U.S. LNG export facilities has stalled the construction of infrastructure, weakening our competitive position. Accelerating that regulatory process would not only reduce our trade deficit and create jobs here in the U.S., it would bolster the geopolitical power of the U.S. and provide security to our allies.”
Also, as prices drop, Iran will have fewer petrodollars to finance atomic weapons. Saudi Arabia will have less cash to fund Wahhabi mosques and radical textbooks worldwide. Nigeria will have limited resources to jail people for homosexuality. And Venezuela’s hemispheric-subversion budget will shrivel as Citgo’s cash registers ring more quietly.
This energy bonanza also would have enormous domestic benefits.
• According to Deutsche Bank, every one-cent cut in the gasoline price leaves $1 billion in the wallets of American drivers and fleet owners. This money can be saved, invested, or spent on products and personnel.
• Cut-rate natural gas lowers electricity bills for homeowners and factory managers, also freeing cash for other purposes.
“The idea that energy costs in North America would always be more expensive no longer holds true,” said former Siemens CEO Peter Loescher. “The new reality is that natural gas has turned that equation on its head.”