The goal for energy security has dominated Washington, D.C. since the 1970’s Arab oil embargo left consumers with empty wallets and standing in long lines at the gas pump. Forty years later, our energy landscape has shifted as the U.S. leads in world production of oil and natural gas. However, policies from years past restricting crude oil exports still haunt us and threaten the very goal politicians have been striving for – energy security.
In a recent article in The Wall Street Journal, Jason Bordoff, former energy advisor to President Obama, explains how America’s isolationist approach towards energy security does not reflect today’s realities. Bordoff, now a professor of professional practice in international and public affairs, and founding director of the Center on Global Energy Policy at Columbia University, argues that because today’s world markets are highly integrated, an isolationist approach no longer reflects the world we live in. He explains that today’s “oil market is the largest and most liquid commodity market on earth.” Therefore, if a country, for example Saudi Arabia, stopped sending oil to the U.S., our markets would not be harmed to the extent of the 1970s embargo. Companies would just move on and buy it from other suppliers.
Bordoff’s argument against energy independence is further underlined when he explains that “we are more secure, not less, when energy markets are interdependent,” but stresses that “import dependence should not be confused with energy independence.” By exporting and importing energy, the U.S.’s goal of energy security will flourish through the interconnectedness, competition, and interdependence of world markets.
On the other hand, there are those who have used energy as a means to threaten others. Bordoff argues that Europe’s lack of interconnectivity has resulted in Russia’s use of gas as a political weapon. As a result, it’s critical that Europe “complete[s] regulatory and infrastructure reforms that make the European market more integrated, promoting competition and building pipeline reversal capability and interconnectors to allow gas to move more freely around the continent.”
An isolationist approach with any commodity is simply not the right choice in today’s globalized world. And yet, the U.S. continues this solitary effort by restricting and banning our energy exports. This limitation doesn’t reflect the realities of our interconnected markets nor is it reasonable. In order to flourish, Congress needs to take action to allow U.S. energy exports to join the global market. Lifting the ban on crude oil exports is the path to take and will bring positive benefits of energy security back to the U.S.