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Biden Admin Energy Policies Putting Americans Further At Risk In Potential War With China, Analysis Finds

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From the Daily Caller News Foundation

By NICK POPE

 

The environmental, social and corporate governance (ESG) movement is undermining U.S. energy security by artificially sapping demand for new refining projects, even though demand for fossil fuels and petrochemicals remains strong and could grow stronger in the event of a prolonged military conflict.

America’s energy systems and infrastructure may be currently unprepared to sustain a wartime economy in the event of a hot war with China, thanks in part to the Biden administration’s green policies, according to a new report published by the Heritage Foundation.

The report, published Thursday and titled “Chinese Handcuffs: Don’t Allow the U.S. Military to Be Hooked on Green Energy from China,” examines the state of American energy security and resilience in a potential war with China, taking stock of markets at home and overseas. The paper emphasizes the need for American policymakers to get ahead of any possible conflict with China by ensuring that the U.S. military has a robust and secure supply of traditional energy available, rolling back certain environmental regulations and targets pushed by the Biden administration, building more strategic energy infrastructure and bolstering existing commercial relationships with friendly countries, all of which may heighten deterrence with an adversarial country considering escalation with the U.S.

“Due to a heavy reliance on foreign sources, poor policy choices, and constraints on the transport of fuels, the U.S. military could be vulnerable,” the report states. “The risk is for localized fuel shortages, global supply disruptions, and Chinese economic coercion during a conflict driving significantly increased energy demands.”

Brent Sadler, the report’s author and a 26-year U.S. Navy veteran who now works as a senior research fellow for naval warfare and advanced technology at the Heritage Foundation, further emphasized that while steps to heighten America’s energy security will be expensive and require political will, they are necessary measures to ensure that the U.S. can transition to and sustain a wartime footing against near-peer competitors like China. Numerous pundits and ex-military personnel have suggested that China is getting ready for a war to start in the coming years, whether in Taiwan or in the South China Sea.

“America’s energy network is brittle in some regions and unable to adjust easily to surges in demand,” the report states. “In wartime, the consequences of such weaknesses could be an inability to sustain military combat operations and the inability of wartime industry to keep America safe. On the other hand, readiness for this possibility could be a significant advantage, enabling the United States to deter China by confronting it with a foe that is able to wage a prolonged war backed by a resilient wartime economy.”

The insistence of some federal and state officials — particularly Democrats — on transitioning the American economy to reliance on green energy poses a major problem for American security, the report asserts. Additionally, the environmental, social and corporate governance (ESG) movement is undermining U.S. energy security by artificially sapping demand for new refining projects, even though demand for fossil fuels and petrochemicals remains strong and could grow stronger in the event of a prolonged military conflict.

The Biden administration has pledged to invest at least $1 trillion over the next decade to advance its massive climate agenda, and federal agencies have pushed stringent regulations and taken other bureaucratic actions targeting the broader American energy sector. The administration is also looking to make the military a more climate-friendly organization, including by seeking to have the Department of Defense (DOD) transition its non-tactical vehicle fleet to electric models by 2030.

Additionally, the supply chains for many of the green energy technologies favored by the Biden administration are dominated by China, the report points out. Numerous energy and national security experts have highlighted that retiring existing energy infrastructure in favor of products reliant on China-dominated supply chains is likely to make America more vulnerable, particularly in the event of an acute geopolitical crisis.

One specific element of the American energy system in need of change is the Strategic Petroleum Reserve (SPR), a de facto emergency supply of oil stored in underground caverns along the Gulf Coast established in the 1970s amid an energy crisis, according to the report. Sadler recommends that policymakers begin to treat the SPR as a key tool for the military to use in the event of war, given China’s rise, as well as improving energy transportation infrastructure to more easily get SPR supply to coastal regions where the military can use it expediently.

The Biden administration has used the SPR as a tool for manipulating markets, as officials decided to release approximately 180 million barrels from the stockpile to bring down spiking energy costs ahead of the 2022 midterm elections. Several million of those barrels were sold to Chinese entities, and the administration has subsequently floated the possibility of again tapping into the SPR ahead of the pivotal 2024 elections while the reserve remains at its lowest levels in about 40 years, according to the U.S. Energy Information Administration.

Stadler calculated that the SPR’s current inventory would need a boost of about 55 million more barrels in order to single-handedly supply the amount of oil that U.S. forces used in Operation Desert Storm in 1990.

Deliberate policy choices and infrastructure upgrades are needed to make sure that the U.S. is able to effectively fight China in a prolonged conflict, Stadler contends in the report. Making these adjustments would help to provide an advantage over potential adversaries like China that rely on energy imports, according to Stadler.

Beyond SPR-related adjustments, the report also identifies an urgent need to unleash refiners and build out more pipeline capacity in light of China’s possible ability to launch highly disruptive cyber attacks against key pipeline and shipping infrastructure.

Additionally, Stadler emphasizes the importance of strengthening relationships with energy-rich countries that could be key sources of energy for American forces around the world in the event of a hot war with China. While several memoranda of understanding are in place with such countries, Stadler suggests that U.S. officials should move to elevate these agreements to treaty status to enhance America’s standing with those countries and decrease China’s ability to pressure third-party countries against assisting American forces.

“This is especially true for scenarios in which a major war disrupts overseas energy markets and normal shipping methods. Under such conditions, the U.S. will need more diverse and reliable overseas suppliers for military operations,” the report states. “Given the global impact that a war with China would have, the U.S. urgently needs to ensure that it has enough fuel stocks and crude oil to allow it time to adjust to a wartime footing.”

Neither the White House nor DOD responded immediately to requests for comment.

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Energy

What does a Trump presidency means for Canadian energy?

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From Resource Works

Heather-Exner Pirot of the Business Council of Canada and the Macdonald-Laurier Institute spoke with Resource Works about the transition to Donald Trump’s energy policy, hopes for Keystone XL’s revival, EVs, and more. 

Do you think it is accurate to say that Trump’s energy policy will be the complete opposite of Joe Biden’s? Or will it be more nuanced than that?

It’s more nuanced than that. US oil and gas production did grow under Biden, as it did under Obama. It’s actually at record levels right now. The US is producing the most oil and gas per day that any nation has ever produced in the history of the world.

That said, the federal government in the US has imposed relatively little control over production. In the absence of restrictive emissions and climate policies that we have in Canada, most of the oil production decisions have been made based on market forces. With prices where they’re at currently, there’s not a lot of shareholder appetite to grow that significantly.

The few areas you can expect change: leasing more federal lands and off shore areas for oil and gas development; rescinding the pause in LNG export permits; eliminating the new methane fee; and removing Biden’s ambitious vehicle fuel efficiency standards, which would subsequently maintain gas demand.

I would say on nuclear energy, there won’t be a reversal, as that file has earned bipartisan support. If anything, a Trump Admin would push regulators to approve SMRs models and projects faster. They want more of all kinds of energy.

Is Keystone XL a dead letter, or is there enough planning and infrastructure still in-place to restart that project?

I haven’t heard any appetite in the private sector to restart that in the short term. I know Alberta is pushing it. I do think it makes sense for North American energy security – energy dominance, as the Trump Admin calls – and I believe there is a market for more Canadian oil in the USA; it makes economic sense. But it’s still looked at as too politically risky for investors.

To have it move forward I think you would need some government support to derisk it. A TMX model, even. And clear evidence of social license and bipartisan support so it can survive the next election on both sides of the border.

Frankly, Northern Gateway is the better project for Canada to restart, under a Conservative government.

Keystone XL was cancelled by Biden prior to the invasion of Ukraine in 2022. Do you think that the reshoring/friendshoring of the energy supply is a far bigger priority now?

It absolutely is a bigger priority. But it’s also a smaller threat. You need to appreciate that North America has become much more energy independent and secure than it has ever been. Both US and Canada are producing at record levels. Combined, we now produce more than the Middle East (41 million boe/d vs 38 million boe/d). And Canada has taken a growing share of US imports (now 60%) even as their import levels have declined.

But there are two risks on the horizon: the first is that oil is a non renewable resource and the US is expected to reach a peak in shale oil production in the next few years. No one wants to go back to the days when OPEC + had dominant market power. I think there will be a lot of demand for Canadian oil to fill the gap left by any decline in US oil production. And Norway’s production is expected to peak imminently as well.

The second is the need from our allies for LNG. Europe is still dependent on Russia for natural gas, energy demand is growing in Asia, and high industrial energy costs are weighing on both. More and cheaper LNG from North America is highly important for the energy security of our allies, and thus the western alliance as it faces a challenge from Russia, China and Iran.

Canada has little choice but to follow the US lead on many issues such as EVs and tariffs on China. Regarding energy policy, does Canada’s relative strength in the oil and gas sector give it a stronger hand when it comes to having an independent energy policy?

I don’t think we want an independent energy policy. I would argue we both benefit from alignment and interdependence. And we’ve built up that interdependence on the infrastructure side over decades: pipelines, refineries, transmission, everything.

That interdependence gives us a stronger hand in other areas of the economy. Any tariffs on Canadian energy would absolutely not be in American’s interests in terms of their energy dominance agenda. Trump wants to drop energy costs, not hike them.

I think we can leverage tariff exemptions in energy to other sectors, such as manufacturing, which is more vulnerable. But you have to make the case for why that makes sense for US, not just Canada. And that’s because we need as much industrial capacity in the west as we can muster to counter China and Russia. America First is fine, but this is not the time for America Alone.

Do you see provinces like Alberta and Saskatchewan being more on-side with the US than the federal government when it comes to energy?

Of course. The North American capital that is threatening their economic interests is not Washington DC; it’s Ottawa.

I think you are seeing some recognition – much belated and fast on the heels of an emissions cap that could shut in over 2 million boe of production! – that what makes Canada important to the United States and in the world is our oil and gas and uranium and critical minerals and agricultural products.

We’ve spent almost a decade constraining those sectors. There is no doubt a Trump Admin will be complicated, but at the very least it’s clarified how important those sectors are to our soft and hard power.

It’s not too late for Canada to flex its muscles on the world stage and use its resources to advance our national interests, and our allies’ interests. In fact, it’s absolutely critical that we do so.

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Energy

What Will Be the Future of the Keystone XL Pipeline Under President Trump?

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From EnergyNow.ca

By Terry Winnitoy, EnergyNow

The Keystone XL Pipeline, proposed in 2008, was designed to transport Canadian crude oil from Alberta to refineries in the United States, specifically to Steele City, Nebraska, and onward to refineries in Illinois and Texas, as well as to an oil pipeline distribution center in Cushing, Oklahoma.

Spanning approximately 1,179 miles and designed to transport up to 830,000 barrels of oil per day, the pipeline promised significant economic and energy security benefits. However, it became a focal point of political and environmental controversy, leading to its eventual cancellation by Presidents Obama and Biden.

Here’s a brief look at its history, the reasons it should have been built, the political dynamics that led to its cancellation and will President-elect Trump revive it?

Why the Keystone XL Pipeline Should Have Been Built

Economic and Job Creation

The pipeline was projected to create thousands of construction jobs and several hundred permanent jobs, providing a significant boost to the economy. It was also expected to stimulate economic activity through the development of related infrastructure and services.

Energy Security

By facilitating the efficient transport of a large volume of oil from a stable and friendly neighboring country, the pipeline would have reduced American dependence on oil imports from more volatile regions, enhancing national energy security.

Environmental Safety

Pipelines are generally safer and more environmentally friendly for transporting oil compared to rail or truck, with lower risks of spills and accidents. The Keystone XL was designed with the latest technology to minimize leaks and environmental impact.

Regulatory Oversight

The project underwent extensive environmental reviews and was subject to strict regulatory standards to ensure it adhered to environmental protection and safety measures.

Political Reasons for Cancellation

Environmental Activism

The pipeline became a symbol for environmentalists who opposed further development of fossil fuel infrastructure. They argued it would contribute to climate change by enabling the extraction and consumption of oil sands, which are more carbon-intensive than other oil sources.

Obama’s Cancellation

President Obama rejected the pipeline in 2015, citing environmental concerns and its potential impact on global climate change. He argued that approving the pipeline would have undercut America’s leadership on climate change.

Trump’s Reversal and Biden’s Final Cancellation

President Trump revived the project in 2017, citing economic benefits and energy security. However, President Biden canceled it again on his first day in office in 2021, fulfilling a campaign promise to prioritize climate change issues and transition towards renewable energy.

Political Symbolism

For both Obama and Biden, the decision to cancel the Keystone XL Pipeline was also a symbolic gesture, demonstrating a commitment to environmental sustainability and a shift away from fossil fuel dependence in line with their administrations’ climate policies.

Will President-Elect Trump Reinstate It?

Currently, there is no definitive answer on whether President-elect Trump will reinstate the Keystone XL Pipeline. His previous administration showed support for the project, citing its potential economic and energy security benefits. However, reinstating the pipeline would require navigating significant political, legal, and environmental challenges that have developed over the years.

It would also depend on the current geopolitical, economic, and environmental priorities at the time of his taking office. The Keystone XL Pipeline’s history is a complex tapestry of economic aspirations, environmental concerns, and political maneuvers.

Its cancellation has been a contentious issue, reflecting the broader national and global debates over energy policy and climate change strategy. Whether it will be reinstated remains a significant question, contingent on a multitude of factors including political will, environmental policies, and market dynamics.

That all said, re-instating its approval might be the perfect “in your face” moment for Trump to Obama and Biden as he begins his second term of presidency. We’ll have to wait and see.

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