Moving on from the hard realities of global-energy geopolitics has allowed our greatest adversary to seize the advantage.
The Biden administration is on its knees.
As of this writing, it is pleading with the Taliban to spare the lives of the Americans remaining in Kabul. It is pleading with the airlines to help with the evacuation effort. And it is also pleading with Saudi Arabia and Russia to put more oil onto the global market and reduce the upward price pressure that Americans have felt at the gas pump this summer.
Much like the fiasco in Afghanistan, the new energy crunch should shock us. But neither should come as any surprise.
For two years on the campaign trail, Joe Biden told us exactly how he viewed the American oil and gas industry. Soon after entering office, he put his party’s agenda into action.
Among other moves, President Biden has nixed a key North American pipeline-expansion project, paused new oil and gas leasing on federal land, and initiated another round of environmental analysis on parcels in a promising Alaska region in which leases had already been awarded.
Bloomberg’s Jennifer Dlouhy reported in July that the administration will soon permanently rule additional federal oil and gas fields out of bounds and raise royalty rates on producers, making the existing drilling more costly.
Biden’s energy-policy orientation is a 180-degree turn from that of his predecessor. Where Biden seeks to constrain, Trump sought to liberate and leverage, shrewdly linking America’s energy-production capabilities with its foreign policy.
Amid the foreign-policy failure in Afghanistan, President Biden should rethink his oil and gas pullout.
While the president has decided to move on from the hard realities of global-energy geopolitics, the rest of the world has not. Indeed, the Biden administration must recognize that the energy policy of our chief geopolitical rival, China, brooks no such self-sacrifice.
In pursuit of Xi Jinping’s articulated worldview, the Chinese state will now more assertively direct the evolution of its economy, ensuring that China gets strong after decades of getting rich.
On energy and other key economic areas, this means becoming more self-sufficient. The objective is achieved, in part, through additions of non-hydro renewables. (Such sources draw China plaudits from credulous wind and solar boosters in the West.) But, like it or not, China is meeting more of its incremental energy needs through additions of oil and gas than through wind and solar.
According to the 2021 BP Statistical Review of World Energy, China used an additional 1.04 exajoules of non-hydro renewable energy in 2020, compared with 2019. That is an impressive figure — until you read that it used an additional 1.36 exajoules of oil and natural gas.
Over the past 30 years, China’s oil and gas consumption has risen steeply. The pace has not slackened, even as China’s overall economic-growth rate has slowed. China now uses 50 percent more oil and 100 percent more natural gas than it did just ten years ago.
This has created an uncomfortable dependency on foreign oil and gas for Beijing. So whereas President Biden has aimed to corral the American industry, Xi Jinping has done just the opposite, spurring China’s national oil companies (NOCs) to ramp up production.
Since a 2018 Xi directive aimed at shoring up China’s energy security, leading NOCs PetroChina, Sinopec, and China National Offshore Oil Corporation have constructed thousands of new oil and gas wells in Xinjiang and Sichuan and in the South China Sea — often encroaching upon the internationally recognized economic zones of its littoral neighbors. According to the International Energy Agency, the 2019 upstream splurge constituted a 23 percent spending increase for the firms and yielded a production jump of 50,000 barrels of oil per day.
A December 2020 report from China’s State Council Information Office describes the policy’s fundamentals clearly. The paper explains that China “has intensified efforts for the exploration and exploitation of oil and gas resources” and “works to increase reserves and production, so as to be more self-sufficient in oil and gas.”
“Focusing on its strategic industrial goals, China has rolled out a project on oil and gas technology whose emphasis is making breakthroughs in petroleum geology theory and key technologies for high-efficiency exploration and exploitation,” the document states.
While broadcasting wind, solar, and battery investments internationally and touting a meaningless carbon-neutrality pledge for four decades into the future, China has simultaneously engaged in a policy of realistic resource acquisition. And it has done so openly, as members of the Western chattering class ooh and aah over the shiny distraction of solar panels.
Joe Biden underestimated the ferocity with which the Taliban would retake Afghanistan. He’s made a similar miscalculation on energy and geopolitics, too, leaving us naked as an adversary seizes the advantage.