Why You Must Support U.S. Oil and Natural Gas Exports

When it comes to the energy-environment discussion that will continue to dominate the world, our most fundamental reality isn’t debatable: the world has JUST STARTED to use energy. Like what Wyatt Earp said in Tombstone, “Oh, that’s a fact.” And like what I’m saying now, “don’t matter who said what, who wrote what, who promised what at COP21 in Paris in December the answer to all energy demand, all sources is…..UP, UP, UP.”

I know this because 6 in every 7 humans today still live in undeveloped nations, a 6,200 million, poor, and energy-deprived population that will explode by 2,400 million people by 2050. So, let’s indeed hope our “climate is changing,” and let’s indeed hope we “tackle” what was, is, and will remain the world’s greatest problem: poverty.

Fortunately in the undeveloped world, worsening poverty today comes before computer models predicting future events. Indeed, if we are ever to make progress, those in the $1.5 trillion Climate Change business (fact is “EVERYTHING is a business”) must get over a simple fact: the world is greatly short of energy.

No matter how many outraged people at Greenpeace, Sierra Club, or elsewhere tell you otherwise, oil and gas are simply not replaceable, explaining why they will still supply at least 50% of all energy for decades to come even under the best case scenario for renewable energy. Thus, we must continually support all energy exports and related infrastructure from all nations, but especially the most reliable, “FREE,“ and environmentally responsible producers like the U.S.

In other words, don’t let the Western obsession over reducing emissions even in the poorest and most energy deprived countries block the real question the world must answer: WHO will supply the developing nations the same indispensable energy that built the rich nations? Just considering the human beings that live today, global energy demand would increase 15-20 times if the poor world ever consumes like the rich one.

What should anger you most my fellow American consumer is that we’ve heard the same utterly false obsession ever since the days of Thomas Malthus over 200 years ago: poor people can’t have the privileged lives that we have because it’s bad for the planet. Wanna know what’s really “bad for the planet?” Over 20,000 children dying a day from preventable poverty, enabled by a lack of energy – undeniably, energy so important that we have a moral obligation to provide it.

As vitally related, the U.S. Shale Oil Revolution and the subsequent collapse in oil prices proves how Greenpeace’s and the likes’ longstanding argument that U.S. energy cannot change global markets is ABSOLUTE NONSENSE. Sorry, but given that we have no higher goal than lifting “undeveloped” nations to “developed” status, we must look to supply all energy, wherever, whenever we can. In short, we must stop the anti-energy movement pulling out all the stops: $10-per-barrel plan is latest swipe at oil-gas industry.

The World Has JUST STARTED To Need Energy

Source: JTC

Oil is the world’s most important source of energy and has NO signifiant substitute whatsoever, precisely why the best energy models always make the same conclusion: world oil consumption will continue rising. Thus, it’s critical that the U.S. export as much crude oil and petroleum liquids as possible, in a world where 250,000 oil-based vehicles are bought every day.

A rising 60-65% of all consumed oil is traded internationally, with the Middle East exporting about half of all crude oil. But, Freedom House says the Middle East has “historically been the least free region in the world,” dominated by despots that regularly infringe on human rights.

And Russia, where the press is “NOT FREE,“ knows that leveraging massive natural resources is the key to gaining political influence. Russia’s oil and gas sector accounts for 25% of GDP, over 50% of federal budget revenues, and over 70% of total exports. Russia is the 2nd largest crude oil exporter at about 4.7 million b/d of crude oil, which is nearly 15 times more than what the U.S. exports even though the two countries have similar production levels.

And, with Russia’s population declining by 16% by 2050, the oil export capacity will continue to extend. The unconventional oil potential alone is staggering: there could be over 100 billion barrels in a single shale play in Western Siberia.

U.S. Oil Exports Buffer the Influence of Dictators and Dangerous People

Source: BP

For natural gas, easily the fastest growing major fuel in the developed nations, a rising 33% of all consumption is traded internationally. And the world has a clear future supply problem: three “NOT FREE” nations (here) Russia, Qatar, and Iran, hold 50% of all global reserves.

Russia is easily the largest gas exporter at 25% of world exports, or over 6 times the market share of the U.S. – even though the U.S. produces more gas. And while the U.S. only exports to neighbors Canada and Mexico, Russia exports to 20 nations.

LNG is the fastest growing delivery mechanism for natural gas and, without the entrance of more “free” supplies from the U.S. and others, is sure to give more power to “troll” or “rogue” states (here) by connecting regional markets. But, rising from nothing today, the U.S. could become the world’s 3rd largest LNG exporter by 2020.

Per FERC, there are now over 20 “proposed” LNG export terminals from the U.S., having about 30 Bcf/day in capacity, versus a total LNG demand market of 37 Bcf/day.

Our increasing ability to export natural gas (here) is crucial for both our Free Trade Agreement (FTA) and non-FTA countries because gas is an increasingly crucial fuel where demand will significantly increase even under policies to keep the global temperature rise below 2°C. And favored renewables have no real chance to compete in the marketplace without gas to compensate for their inevitable intermittency.

Just take the most pro-renewable energy state in the country, California, where gas reliance has soared even under laws that force the use of renewables (read that again). Additionally, with more regulations and oversight, gas and oil from the U.S. is more environmentally friendly. Flaring and methane emissions from U.S. production have been plummeting while they’re rising in Russia.

Yes, indeed. The world is a dangerous place to live; not because of the people who are evil, but because of the people who seek to block supplies of irreplaceable energy from free, democratic countries like the United States, only to empower dangerous players ready to pounce on open market share.

U.S. Natural Gas Exports Buffer the Influence of Dictators and Dangerous People

Source: BP

Source: Forbes