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Energy is a Global Commodity and Should Stay That Way

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Posted on Thu, 10 May 2012 00:33 | 0

A U.S. lawmaker called on the White House this week to eliminate what he said was a "disturbing connection" between U.S. energy demands and violence in the Middle East. New Englanders get about 20 percent of their liquefied natural gas from Yemen, where al-Qaida in the Arabian Peninsula is a grave security concern. In Yemen, AQAP was blamed for a series of attacks on oil and natural gas pipelines. In the United States, it's tried at least twice to strike a major blow. With the United States emerging as a natural gas superpower, however, perhaps the discussion should focus less on protectionism to keep energy supplies at home and more on how to get that natural gas out of the region and into a globalized economy.

U.S. Rep. Ed Markey, D-Mass., ranking member of the House Natural Resources Committee, called on the White House to either reduce or eliminate U.S. dependency on energy from the Middle East. He says the threat posed by AQAP in the region is a strategic vulnerability that warrants a retreat from the regional market. About 20 percent of the LNG arriving at Massachusetts ports comes from Yemen, he said, and groups like AQAP are threatening not only national security but energy security as well.

"The disturbing connection between American energy demands and violence in the Middle East is one that we must work to eliminate," he writes.

Meanwhile, Deputy Secretary of State William Burns was telling regional leaders that the global poles were shifting in terms of oil and natural gas. He said that the American and Caribbean economies account for about 25 percent of the world's crude oil and 30 percent of the world's natural gas. In terms of imports, the United States gets about half of its oil from its regional neighbors and only 20 percent from the Middle East.

"The world’s oil map is no longer centered predominantly on the Middle East, but increasingly on the Americas as well," he said.

Burns, in his address to the Council of the Americas, referenced Secretary of State Hillary Clinton's "power of proximity" policy. Clinton said last month that economic interdependence was one of the best ways to ensure regional energy security. Canada, Argentina, Brazil, the United States and Mexico have some of the richest energy deposits in the world and "harnessing the 'power of proximity' between the United States and our neighbors in the Americas is among the most strategically significant tasks in the new century opening up before us," said Burns.

But the so-called power of proximity, according to Burns' words, works both ways. And it should stretch beyond the immediate neighborhood. During the Carter administration in the 1970s, dragons were slain in the Middle East on the premise that the free movement of oil from the region was a strategic concern. A steady diet of U.S.-led military conflict in the region, however, has seemingly left a bad taste in the mouths of policy makers. Markey seems to want to retreat from the international energy arena almost completely while Burns advocates more of a regional policy. Protectionism and the collapse of global trade in the 1930s was a recipe for economic disaster. Open systems in the global energy market, not closed ones, should still prevail.

"This situation demands careful thought, steady nerves, and resolute action, not only for this year but for many years to come," said Carter.

By. Daniel Graeber of Oilprice.com


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