XPost: ba.politics, dc.media, soc.penpals   
   XPost: alt.burningman   
   From: chazl@umsl.edu   
      
   For decades it has seemed as if God has played a great joke on   
   mankind, granting the best fuel reserves to the worst places.   
   Iran, Russia, Saudi Arabia, Turkmenistan – all have been able to   
   run fairly repressive regimes, feeling no need to become open,   
   competitive democracies. As Vladimir Putin has found, if you own   
   the gas which the rich world needs, then you can get away with   
   murder.   
      
   Consider yesterday’s European Union summit. Leaders agreed, in   
   effect, to be jolly annoyed about Putin’s annexation of Crimea.   
   They may even cut up some oligarchs’ Harrods storecards. But to   
   go much further? Difficult, when Russia is supplying a third of   
   Europe’s gas. As Finland’s Europe minister candidly put it:   
   “There isn’t that much that we could do, at the end of the day.   
   And I think the Russians know that.”   
      
   Europe is a recession-struck continent dependent on a Kremlin-   
   controlled energy price. Putin cleverly cut Gazprom tariffs to   
   the region last year, ramping up its dependence on Russian gas   
   to record levels. And in so doing, he effectively bought EU   
   foreign policy.   
      
   He’d find it harder to buy America’s nowadays. As Barack Obama   
   considers his options, he has a substantial new weapon that he   
   is not sure how to deploy. In the last few years, the shale   
   revolution has utterly transformed America’s energy fortunes.   
   When Putin invaded Georgia, it seemed as if the US was running   
   out of natural gas – and George W Bush meekly wondered whether   
   to buy some from Russia.   
      
   Since then, the shale bonanza has sent American crude output   
   soaring by 60 per cent, taking the country into a thoroughly   
   unexpected era of energy abundance. Its gas prices have fallen   
   by two thirds; factories and jobs are flooding back to former   
   rust belt states. By the end of this decade, America will be   
   exporting more energy than it imports.   
      
   This is redrawing the global energy map, and the implications go   
   way beyond the economic. If America doesn’t need Arabian oil,   
   why should it spend billions having the US Fifth Fleet keep the   
   peace in the Persian Gulf? Why spill so much blood and treasure   
   in overseas entanglements where no national interest can be   
   found? Why not let Europe sort out its own back yard – and let   
   this debt-addled continent confront the consequences of its   
   failure to pay for a proper military?   
      
   But events in the Crimea have now added another question: why   
   shouldn’t America use its new-found energy reserves as a weapon?   
   It would be easy enough to do. If Barack Obama were to export   
   more of this gas, he could send world prices to the floor –   
   hurting not just the Kremlin, but the oligarchs who support   
   Putin. Of all the weapons in America’s arsenal, its new energy   
   power is perhaps what the Kremlin fears most.   
      
   Russia is, in effect, a giant gas company with a military   
   attached to it. Moscow’s interests are synonymous with that of   
   its state-owned gas concerns, which explains much of its bizarre   
   foreign policy. Why should Putin have protected Bashar Assad   
   when he was gassing his own people? We were reminded of the   
   answer on Christmas Day, when Russia signed a 25-year deal with   
   the Assad regime, handing the state-controlled energy firm   
   Soyuzneftegaz a chunk of the Levant Basin. In this way, Assad’s   
   Syria has joined Putin’s virtual empire.   
      
   This is why hawks in Washington are not content with Obama   
   deploying F-16 fighters to Poland, and are urging him to   
   retaliate with robust pipeline politics. A Texan congressman,   
   Ted Poe, yesterday introduced a Bill that would speed up the   
   delivery of American gas to Ukraine and other threatened   
   regions. John Boehner, the Republican Speaker of the House, is   
   telling Obama his prevaricating over gas export licences has   
   helped Putin “to finance his geopolitical goals”. The fuel hawks   
   are clear: energy has strategic value, and Obama’s failure to   
   use it has emboldened the enemy.   
      
   Another weapon the president might deploy is approving the   
   Keystone XL pipeline, which would take oil to coastal   
   refineries, ready for export. Then he could lift the ban on   
   exporting crude oil, which has lingered since the crisis of the   
   Seventies. He could fast-track the 15 gas export terminals still   
   waiting for planning approval, to send supplies to America’s   
   allies. All of these demands have been made, for years, in the   
   name of cheaper energy. The Greens protested, as did those who   
   feared exports would make fuel pricy again. But only now does   
   exporting energy seem like an essential tool of American   
   statecraft – a weapon in a new cold war.   
      
   It’s not hard to guess what Hillary Clinton, favourite to be the   
   next US president, would do. When she was Obama’s secretary of   
   state, she spotted early on the chance to exploit American oil.   
   The word “energy” was mentioned 81 times in her Quadrennial   
   Diplomacy and Development Review, which proposed building a   
   Bureau of Energy Resources “to unite our diplomatic and   
   programmatic efforts”. This bureau has been working away behind   
   the scenes and is credited for helping Ukraine reduce its   
   dependence on Russian energy – although not, as it turned out,   
   fast enough.   
      
   The hawks can argue that America’s new weapon has already been   
   used to great effect – on Iran. The recent sanctions, credited   
   with forcing the ayatollahs to the negotiating table, only   
   worked because the US had so much energy. Not so long ago, if   
   1.5 million barrels a day of Iranian oil were taken off the   
   market, prices would spike – hurting everyone. But this time,   
   America was able to persuade its allies that it would increase   
   production, keeping prices stable. When the US threatened deeper   
   cuts to Iranian exports, the ayatollahs blinked. Without the   
   shale revolution, such a gambit would not have been possible.   
      
   So after Tehran, should Moscow be the next testing ground for   
   America’s E-Bomb? Obama is a naturally cautious president, and   
   here he has much to be cautious about. He is being asked, in   
   effect, to behave like the Russians – and explicitly use energy   
   as a diplomatic trump card. This risks making any future   
   development of America’s energy industry look like a hostile   
   act. Also, Putin would respond, which would hurt his European   
   allies a lot more than it would hurt America. As yesterday’s   
   summit showed, Germany has no appetite for confronting the   
   Kremlin. Even conservative Die Welt declared that “the West   
   should embrace Putin”.   
      
   The shale revolution, and its awesome implications, have taken   
   most of Washington by surprise – it was unforeseen, even six   
   years ago. And in six years’ time, America will have overtaken   
   Saudi Arabia as the world’s top supplier of hydrocarbons, with   
   all the extra clout that will bring. Ten years after that, it   
   will be completely self-sufficient – a development that may   
   transform world politics as profoundly as the collapse of the   
   Berlin Wall.   
      
   But for now, the Ukraine crisis will have served to remind Obama   
   that America is not – yet – ready to use its energy glut to full   
      
   [continued in next message]   
      
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