I wouldn't say Canadians were complacent about the U.S. market. But what has given them a bit of a wakeup call was that the evidence seemed so compelling why the U.S. should buy more oil from Canada, but yet the decision was delayed. We are not naïve about the politics in the U.S., but when we see such a compelling case, and yet it is not approved, it has given people a start. We need to look at alternatives.
Whatever happens, an enduring U.S. naval fleet: Evidence is mounting that the U.S. will maintain its global naval footprint regardless of any shift in energy or geopolitics: Despite the shrinkage or disappearance of primary raisons d'etre, the Navy obtains other rationales for its current size. Here at FP, Robert Farley suggests that the Obama Administration regards the Navy as an organic tool for sustaining long-term geostrategic balance with China (pictured above, the nuclear-powered aircraft carrier USS Carl Vinson, docked in Hong Kong.). That explains the administration's shift of U.S. naval attention to Asia.
But what about the Carter Doctrine, under which the U.S. treats the Persian Gulf as covetously as if it were located off U.S. shores. Given the fresh belief that the U.S. is on the verge of virtual oil-independence, isn't this the moment that some folks have long awaited -- when the U.S. no longer must protect Saudi Arabia, and can save trillions of dollars in protective military spending underlying oil prices? The answer is no, says retired Gen. Chuck Wald, former deputy commander of the U.S. European Command. "If it had not been for oil and our dependence on oil, which started with Churchill, we would still feel a need to have a presence in the Middle East -- because of Israel," Wald told me. He said:
It is not an ‘either-or' situation, the way that some people say, that if it were not for oil we wouldn't have to worry about defending the sea lanes and all that. If you really look at one of the most interesting threats to sea lanes, it is the pirates off the coast of east Africa, and it has nothing to do with oil. ... [Whatever happens with oil] we are still going to have a growing interdependency based on commerce. As I used to say when I taught at the National War College, when the world has a problem with things globally, they like to call 1-800-USNavy.
I spoke with Wald by phone prior to his appearance at a Deloitte-sponsored event in Washington titled, "The Realities of Energy Security through Supply Independence." He feels strongly that the U.S. needs to build up energy self-sufficiency in order to have a more independent foreign policy. But he simply doesn't think that, while becoming more independent, the U.S. role abroad will lessen. Iran, Wald said, "is playing us like a drum right now from the standpoint of foreign policy based on the pressure they can put on us on the concern about [oil supply] disruption -- this is a bad situation we put ourselves in." Wald:
We are in a situation that doesn't get any better, even though we are [headed toward] an interestingly bright future energy-wise because of fracking and potential imports from Canada and potential technology breakthroughs in the Gulf of Mexico.
Go to the Jump for more of the Wrap.
Aaaron Tam AFP/Getty Images
One becomes nervous when a consensus begins to form around a Big New Idea -- it starts to sound like group think. So what are we to make of the cottage industry developing around the notion that the U.S. not only isn't facing an impending oil shortage -- it is on the cusp of being nearly energy independent, short of a margin of barrels that will be imported from friendly Canada and Mexico?
As discussed over the weekend, Clifford Krauss of the New York Times and oil consultant Daniel Yergin, writing at the Washington Post, have published long pieces marveling at the emerging picture of a hydrocarbon bonanza in the United States and right on its borders. Today, the Financial Times' Ed Crooks adds a third lengthy analysis to this growing train, suggesting that by 2035, the U.S. and Canada together could be producing a whopping 22 million barrels of oil a day -- more than twice the current volume - and thus requiring almost no other crude from anywhere. Add up oil shale from North Dakota (pictured above, North Dakotan oil camp), Texas and elsewhere; Gulf of Mexico crude; natural gas liquids from shale gas; plus Canadian oil sands, and you get the picture. In combination, the analyses leave one with whiplash.
How surprising is this shift? In his Washington Post piece published Sunday, Yergin describes the emergence of a "new world oil map ... centered not on the Middle East but on the Western Hemisphere." But just six weeks ago, Yergin published The Quest -- his comprehensive, 754-page fresh dive into global energy -- which not only doesn't mention such a shift, but describes a continued Middle East-centered oil universe in which the notion of energy security is a mere "mantra." Yergin already needs to go to an updated second edition.
What could undermine the prognoses is if the result is relatively low oil prices, and a resumption of America's gluttonous gasoline appetite, which would erode millions of barrels of oil a day. Still, Crooks finds solace in the volumes further afield, but still in the Western Hemisphere: "Even if the most optimistic hopes are not fulfilled," he writes, "one can imagine a future in which the U.S. imports oil only from Canada, Mexico and a handful of other friendly countries such as Brazil."
Karen Bleier AFP/Getty Images
Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.