Recently Senator Bernie Sanders acknowledged that he had been briefed by U.S. intelligence on Russia’s attempts to interfere in U.S. elections on his behalf.
In response to reporters, Sanders said “It was not clear what role they’re going to play. We were told that Russia, maybe other countries, are going to get involved in this campaign, and look, here’s the message to Russia: stay out of American elections.”
President Trump suggested that Moscow would prefer Sanders to win, since he had once honeymooned in Moscow. This point was echoed by Robert O’Brien, Donald Trump’s national security adviser.
I am not a political pundit, so I won’t attempt to speculate on who Moscow would prefer as the U.S. president. But there is at least one area in which the Russians would love to see Sanders’s policies implemented.
On energy policy, there are two things that Sanders has promised that would make the Russians (and OPEC) very happy.
Fracking Boosted American Energy Independence
The combination of hydraulic fracturing (fracking) and horizontal drilling has led to a renaissance in U.S. energy production. Since 2006, net imports of petroleum and petroleum products into the U.S. have fallen by 13 million barrels per day (BPD). That means hundreds of billions of dollars that were being sent to countries like Russia and Saudi Arabia for oil imports are now staying in the U.S. economy. Related: The 3 Hottest Inverse Energy ETFs
U.S consumers have benefited tremendously from the practice. Multiple studies have shown that consumers are now saving hundreds of billions of dollars per year in energy costs.
Bernie Sanders has vowed to end this practice if elected President. He has already introduced legislation to do just that.
Making Russian Energy Great Again
Russia would be a significant beneficiary of a U.S. fracking ban, as it would allow them to recapture market share that was lost as U.S. oil and gas production surged. U.S. oil production would fall, but so would natural gas production. That, in turn, will also help Russia retain its control of the global natural gas export market.
Senator Sanders has also promised to sign an Executive Order re-implementing the ban on U.S. crude oil exports because of his view that climate change is a national emergency. President Obama signed legislation in 2015 repealing the 40-year old export ban in the face of rapidly rising U.S. crude oil production. That repeal helped U.S. production continue to grow, at the expense of other international oil producers like Russia. Related: Has U.S. Electricity Lost Its Spark?
The logical flaw in Sanders’s plans is his belief that reducing U.S. oil production will make a meaningful impact on climate change. It will not. If U.S. production falls, both Russia and OPEC have spare production capacity that they can ramp up to meet the shortfall. And when that shortfall becomes too great, oil prices and natural gas prices will spike back to levels they were before the U.S. shale boom.
That, in turn, might have some modest impact on U.S. consumption because it would drive up energy costs for American families (money that will once again start flowing in part back to Russia). But oil demand has shown itself to be pretty inelastic, which means the net impact on climate change would be negligible.
But the benefit to Russia would be enormous.
By Robert Rapier
More Top Reads From Oilprice.com:
- Will We Really See Negative Oil Demand Growth This Year?
- The Risk For Oil Is Shifting To The Upside
- Iraq Plans Production Surge In The Face Of New OPEC Cuts