The American Interest
Analysis by Walter Russell Mead & Staff
Did The NYT Just Thank Bush and Cheney For Making Us Energy Independent?

In a front page story on Friday, the New York Times covered a surprising new development that could revolutionize the way America powers itself and conducts foreign policy: The US is surprisingly close to becoming self-reliant on energy. With oil and especially gas production booming due to fracking, deep-water drilling, and new oil discoveries, American energy production is growing rapidly—America already is a net exporter of some refined energy products, and could possibly become an energy producer on par with the oil giants of the Middle East:

Not only has the United States reduced oil imports from members of the Organization of the Petroleum Exporting Countries by more than 20 percent in the last three years, it has become a net exporter of refined petroleum products like gasoline for the first time since the Truman presidency. The natural gasindustry, which less than a decade ago feared running out of domestic gas, is suddenly dealing with a glut so vast that import facilities are applying for licenses to export gas to Europe and Asia.

National oil production, which declined steadily to 4.95 million barrels a day in 2008 from 9.6 million in 1970, has risen over the last four years to nearly 5.7 million barrels a day. The Energy Department projects that daily output could reach nearly seven million barrels by 2020. Some experts think it could eventually hit 10 million barrels — which would put the United States in the same league as Saudi Arabia.

This is truly great news for America. While the long time periods involved and the inherent uncertainty surrounding oil and gas prospecting cast doubt upon some of the more grandiose predictions, the piece provides ample room for optimism. An energy independent America would be both more prosperous and more independent in its foreign policy. Even if we fail to achieve full independence, the benefits of expanded energy production will be immense.

While energy independence will have the greatest impact on economics and foreign policy, there is a bit of political irony here as well. Despite Obama’s promises on the campaign trail of a greener America less dependent on brown jobs and fossil fuels, the explosion of resource extraction under his watch may bring America closer to energy independence than it has been for decades.

With an election fast approaching, Obama will doubtless be happy to take credit for this development. Yet even the New York Times, not generally a fan of the former president, acknowledges that much of the credit for this change belongs with the Bush administration:

The Bush administration worked from the start on finding ways to unlock the nation’s energy reserves and reverse decades of declining output, with Mr. Cheney leading a White House energy task force that met in secret with top oil executives. [...]

The Bush administration also opened large swaths of the Gulf of Mexico and the waters off Alaska to exploration, granting lease deals that required companies to pay only a tiny share of their profits to the government.

These measures primed the pump for the burst in drilling that began once oil prices started rising sharply in 2005 and 2006. With the world economy humming — and China, India and other developing nations posting astonishing growth — demand for oil began outpacing the easily accessible supplies.

In 2008, Obama campaigned against the record of the Bush administration, yet one of the most significant successes of his presidency may come as a result of his predecessor’s legacy. With foreign policy and now with energy, Obama’s administration has often done best where it followed the Bush agenda most closely—just don’t expect to hear about this during the campaign. Neither Republicans nor Democrats are in the mood right now for discussions of the very large areas of common ground the Bush and Obama administrations share, so Via Meadia will say nothing more at this point about such an indelicate subject.

 

Published on March 24, 2012 8:41 am
  • Mrs. Davis

    Heh.

  • Anthony

    “Neither Republicans nor Democrats are in the mood right now for discussions of the very large areas of common ground the Bush and Obama administrations share….” The fact of shared common ground is worthy of analysis…

  • Bart Hall (Kansas, USA)

    We could take one more step that would seal the deal of American energy independence — waive EPA permitting requirements and immediately allow the construction of up to a dozen coal refineries.

    Basic coal refining is nearly a century old, and the current world leaders are in South Africa, having really pushed it forward during the apartheid embargoes. Not only can you do coal-to-liquid fuels, but also di-methyl ether, which can be used in any diesel with only minor, off-the-shelf modifications to accommodate the need to operate at propane-like pressures.

    America COULD be energy-independent in five years, but if we wished to be ‘lazy’ about it we could easily be importing only from Canada.

    The US Air Force had a coal-to-liquid (jet fuel) plant in Montana, but the entire project was cancelled in late January, 2009. The date is not a coincidence.

  • http://knownofold.blogspot.com J R Yankovic

    Seems clear enough to me that a door is being opened (though God knows I can be simpleminded enough about things like these).

    My question, then, is: Shall we walk through it? Or shall we go on chasing that always-popular-among-elites chimera, Maximum Global Economic Interdependence (cf. “Trilateralism,” Holly Sklar [ed.]: http://www.amazon.com/Trilateralism-Trilateral-Commission-Planning-Management/dp/0896081044). Thereby binding ourselves ever closer to the Saudis, those stalwart friends-through-thick-and-thin of both Israel and the US (not to mention Europe and Japan)?

    Remember, there’s nothing quite like global trade (not trust) for the maintenance of global peace. You know, the sort of radical, unprecedentedly global movement of goods and people that was so effective a guarantor of peace throughout the period 1890-1914.

    “In 2008, Obama campaigned against the record of the Bush administration, yet one of the most significant successes of his presidency may come as a result of his predecessor’s legacy. With foreign policy and now with energy, Obama’s administration has often done best where it followed the Bush agenda most closely—just don’t expect to hear about this during the campaign. Neither Republicans nor Democrats are in the mood right now for discussions of the very large areas of common ground the Bush and Obama administrations share, so Via Meadia will say nothing more at this point about such an indelicate subject.”

    And thanks for a superbly uncomfortable conclusion to a very timely post.

  • http://facingzionwards.blogspot.com/ Luke Lea

    “An energy independent America would be both more prosperous and more independent in its foreign policy.”

    Be careful here. The world economy is an integrated whole and the world economy is not about to become independent of the unstable regions from which most of its oil is pumped. The price of oil is out of our control and will remain so. The only scenario I can imagine in which American “energy independence” would make any difference is one of world war in which international oil markets are disrupted.

  • Jim.

    “Neither Republicans nor Democrats are in the mood right now for discussions of the very large areas of common ground the Bush and Obama administrations share, so Via Meadia will say nothing more at this point about such an indelicate subject.”

    Oh, come on, if you can’t have some fun at the expense of that sort of irony, what can you have fun with, in politics?

    I’m curious to know the reaction of people who object to Exxon’s paying very little in taxes owing to their reinvestment of most of their profits in the tax-exempt exploration that led us to this beneficent situation.

  • maulerman

    Luke Lea writes “Be careful here. The world economy is an integrated whole and the world economy is not about to become independent of the unstable regions from which most of its oil is pumped. The price of oil is out of our control and will remain so. The only scenario I can imagine in which American “energy independence” would make any difference is one of world war in which international oil markets are disrupted.”

    Unfortunately, Luke’s point misses a significant observation in WRM’s post by focusing only on oil. One of the most important energy development is the unlocking of US shale gas resources. Natural gas is not subject to global markets as is seen in the collapse of the US natural gas market. In particular, it is important to see the decoupling between price per BTU for oil vs. natural gas. The price per BTU for natural gas is significantly discounted today from the price per BTU for oil. While not current with today’s prices, the below link to a year old article by Bill Powers explains three commonly analyzed relationships between gas and oil prices, including the BTU content relationship I mentioned.

    http://www.financialsense.com/contributors/bill-powers/natural-gas-vs-oil-and-coal

    Power generators are already moving to replace coal with natural gas as seen in the increase in natural gas burning power generation at the expense of a decrease in coal burning power generation.
    http://www.reuters.com/article/2011/02/10/us-coal-gas-switching-idUSTRE7192OL20110210

    Additionally, the US transportation industry is also attempting to exploit this difference to lower transportation costs.

    http://online.wsj.com/article/SB10001424052970203986604577257770238882852.html

    As inexpensive natural gas produced in the onshore United States displaces other energy sources, whether in power generation or transportation, our dependence on unstable areas to meet our energy resource needs will diminish.

  • Gary L

    But how can this be? Cheney can’t possibly have done anything of value! I can say this authority because Time Magazine recently ranked Cheney as one of the worst VPs, right up there with Aaron Burr, William Rufus King (who?), Spiro Agnew and J. Danforth Quayle.

    http://www.time.com/time/specials/packages/completelist/0,29569,1834600,00.html

    You might have missed that issue, since Time Magazine now comes out as an eight-page quarterly insert…….

  • http://facingzionwards.blogspot.com/ Luke Lea

    A good point, maulerman. I hadn’t considered that. Still you wouldn’t deny that a disruption in oil coming out of the Persian Gulf would have extraordinarily adverse consequences for our economy would you?

  • Kris

    Gary@8, the list seems to be from 4 years ago (not that Time sees fit to provide us with an actual date), but is indeed interesting. Other than Henry Wallace who was repudiated by his own party, it seems that one has to go back to 1885 to finally get a bad Democratic VP. Conversely, other than oh-so conservative G.H.W. Bush, one has to go back to Charles Curtis (1928) to find a Republican VP who is not among this Republic’s worst. Not even trying, are they?

  • lhf

    “Neither Republicans nor Democrats are in the mood right now for discussions of the very large areas of common ground the Bush and Obama administrations share, so Via Meadia will say nothing more at this point about such an indelicate subject.”

    This would be a mistake for Republicans. It is useful to point out that Obama has adopted his predecessor’s defense, counterterrorism, and energy policies. It has the advantage of enabling the Republicans to praise those policies, point out Obama’s hypocrasy, since he vociferously campaigned against them, AND separating him from his base. Moreover, if Republicans avoid talking about this, Obama will use it against them to his advantage.