Policy: The US' Internal Fight Over Energy Security

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• The changing definition of energy security has become a political sparring point in Washington. • Republicans hewing to the traditional concept of security of oil supply argue that the Joe Biden administration's focus on the energy transition will leave the US more reliant on foreign producers in the near term. • Democrats are framing energy security around addressing the climate crisis -- and preparing for a world in which oil and gas will play a shrinking role. The Issue For decades, concerns around energy security dovetailed neatly with industry's desire to produce more of what it sells. But Biden administration officials are now pushing hard to advance zero-carbon energy generation. Critics argue this will make the US less secure, by leaving it more dependent on foreign oil producers in the near term, and longer term on China for minerals critical to energy transition technologies. Such arguments echo those about oil's role in energy security now playing out on a global level between producers and consumers, and in the corporate world (EC Jun.11'21; related). Competing Narratives The Biden administration sees the climate crisis as a national security threat, and argues that climate action will make people's daily lives more secure. In addition to supporting electrification and renewables, it is advancing policies that could: make it harder to greenlight pipelines; remove territory from upstream leasing programs; see regulations aimed at tamping down methane emissions; and revoke tax benefits for oil and gas production (EC Jun.4'21). Those will all have the effect of reducing US supply, the Republican counterargument goes, increasing reliance on imports. This week, multiple Republican senators pointed out that the US currently consumes more oil from Russia than Alaska. Biden's climate-focused policy amounts to “attacking American energy independence at every turn," Sen. Cynthia Lummis said last week. Republican lawmakers, seeking to highlight what they see as a misguided White House energy policy, have even made links between the administration's move to revoke a permit for the Keystone XL pipeline with its decision not to impose sanctions that may have halted construction of the Gazprom-led Nord Stream 2 pipeline (EC Jun.11'21). "It's hard to square why the administration canceled its construction yet waived sanctions on Russia's malign energy project," the top Republican on the Senate Foreign Relations Committee James Risch said. And over the longer term, they argue, China's dominance of critical minerals markets means Beijing will simply assume the role Opec nations once played (PIW Mar.26'21). “Where we once worried about Opec's control over supplies, we're now witnessing China and Russia dominate critical mineral supply chains. At the rate we're going, America may soon face an energy crisis like we did in the mid-70s," Sen. John Barrasso told Secretary of Energy Jennifer Granholm in a hearing this week. However, the “energy dominance" posture of the former Donald Trump administration that saw virtue in unfettered production without any focus on demand didn't liberate the US from Opec nations, argues Robbie Diamond, CEO of Securing America’s Future Energy. Shale oil “helped our balance of payments and helped US foreign policy," says Diamond. “But ultimately, where were the first wells to come off line" when the pandemic cut demand dramatically in 2020, he asks. “The United States. Where was the United States government? Trying to collude with Opec, Russia, Saudi Arabia, trying to cut production," he says (EC Apr.17'20). New Supply Chain Security Still, Biden administration officials focused on low-carbon sources are echoing the “energy independence" refrain of the 90s and aughts -- but with a focus on the minerals needed to make batteries critical for electric vehicles and storage (EC May21'21). The Department of Energy last week released a blueprint for lithium batteries, emphasizing the need for a robust US supply chain that includes mining, processing, manufacture and recycling. “Maintaining and expanding lithium cell and battery manufacturing capability here in the U.S. -- as well as in allied and partner countries -- is critical to U.S. national security and is essential to developing resilient defense supply chains not under threat from near-peer adversaries," the report reads. The US is also focused on shoring up supply chains globally. Last week, the State Department announced the US would join the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development -- part of a push for transparency in the mining sector. “Good governance over the resources that will drive this transition are more important than ever," a State Department official said. A Threat From Within Granholm this week said the administration is also focused on addressing grid reliability issues by focusing on permitting and paying for new transmission lines. Those issues have new salience after a year in which California and Texas both struggled to keep customers' lights on (EC Feb.26'21). “Electrifying everything presents risks and uncertainties in terms of grid reliability and having enough firm power," says Ben Cahill at the Center for Strategic and International Studies. “I certainly don't think the key risk for the US is greater reliance on imports of oil." While widespread electrification will require new grid investments, it also reduces the overall demand for energy supplies because it is more efficient than burning fossil fuels for generation. A Princeton University study found that overall US energy demand could fall between 23% and 32%, depending on policy choices made, in 2050 compared to today (PIW Jun.4'21). Conscious Uncoupling? The conceit of energy independence was always that if the US could reduce its need for energy and produce more at home, it could divorce itself from oil economies. This week's visit to the United Arab Emirates and Saudi Arabia by US climate envoy John Kerry to urge a greater focus on a lower-carbon footprint demonstrates that the US will be engaged in energy and climate diplomacy for years. And climate change introduces new complications: US action alone won't insulate the country from the effects if other countries don't act. “Climate change is a global threat and while we need to make meaningful reductions on our own, our efforts won't be successful at addressing the climate threat unless we see similar efforts around the world," US Treasury Secretary Janet Yellen said Wednesday. Emily Meredith, Washington

Security Risk , Sanctions, Shale, Policy and Regulation, Electric Vehicles, Crude Oil
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