203
energy market with numerous players. (Author’s interview with Mo Dialami, Energy
Economist, April 12, 2020)
The Trump energy policy faces several challenges: declining world prices due to the
Covid pandemic, competition from other producers, and a long-term decline in the
demand for fossil fuels. As noted, US oil and gas production costs tend to be higher
than some other producers, like Saudi Arabia, so when prices fall—as they have since
the outbreak of the Covid pandemic—US producers find it hard to compete with lowproduction-cost countries. More importantly, growing international concern over climate change is leading many countries (and states within the US) to adopt
emission-reduction measures, and this is producing increased demand for renewable
energy as compared to fossil fuels. This trend is likely to continue, posing a significant
challenge to the Trump strategy (Author’s interview with Michael Klare, June 24, 2020).
The US does not own most of the oil—private companies do. As such, those
companies respond to market signals. Policies can encourage specific behavior, but
they can also be detrimental if not crafted well, considering the issues the US experienced under the ban on crude exports that was later lifted by the Obama administration. Furthermore, energy markets are becoming increasingly liquid. Hence, it is
becoming increasingly tougher to derive geopolitical power from being an energy
producer. US energy exports impacted the world geopolitically in the sense that they
have constrained the geopolitical power of other producers. US exports are based on
market realities, and, hence, the US enters the market when there are profits to be
made. This makes international markets more liquid (Author’s interview with Anna
Mikuslka, June 30, 2020).
As costs are rising in the present time, industries are experiencing more difficult
times in affording oil. Indeed, there are numerous oilfield service companies that
have still not been able to overcome the impacts of the 2014 price collapse, as
recently reported by Weatherford International, one of the four prominent oilfield
service companies in the world. In such a context, if oilfield service companies
channel themselves toward Chinese manufacturing, it is inevitable that the global
supply chain will continue to be increasingly disrupted. On the other hand, there are
doubts as to whether Asian suppliers of lower quality will be able to meet increasing
demands. While channeling toward producers in Asia may be of benefit to US companies in the long term, it constitutes a risk for service companies with exceptionally low-profit margins, such as Canary, in the short term. Prior to the trade war,
China had not only been importing oil and natural gas from the US, but it was also
one of the three top US LNG importers. Currently however these imports have drastically reduced. One forecast regarding the future of LNG projects is that China will
hart/2019/05/20/neverending-us-china-trade-war-puts-energy-dominance-atrisk/#2eefe3772c6d 2019). As for the present time, while the increasing demand for
LNG in China has been the target of most projects in the US, where there are
approximately 30 LNG projects at different stages of development, China is actually seeking alternative suppliers of LNG in such countries as East Africa, Australia,
and Russia. Not only the interruption of oil imports from the US but also the tighter
sanctions imposed on Iran and Venezuela have caused China to lose access to
approximately one million barrels of crude oil imports per day. The alternative proEnergy Dominance
energy market with numerous players. (Author’s interview with Mo Dialami, Energy
Economist, April 12, 2020)
The Trump energy policy faces several challenges: declining world prices due to the
Covid pandemic, competition from other producers, and a long-term decline in the
demand for fossil fuels. As noted, US oil and gas production costs tend to be higher
than some other producers, like Saudi Arabia, so when prices fall—as they have since
the outbreak of the Covid pandemic—US producers find it hard to compete with lowproduction-cost countries. More importantly, growing international concern over climate change is leading many countries (and states within the US) to adopt
emission-reduction measures, and this is producing increased demand for renewable
energy as compared to fossil fuels. This trend is likely to continue, posing a significant
challenge to the Trump strategy (Author’s interview with Michael Klare, June 24, 2020).
The US does not own most of the oil—private companies do. As such, those
companies respond to market signals. Policies can encourage specific behavior, but
they can also be detrimental if not crafted well, considering the issues the US experienced under the ban on crude exports that was later lifted by the Obama administration. Furthermore, energy markets are becoming increasingly liquid. Hence, it is
becoming increasingly tougher to derive geopolitical power from being an energy
producer. US energy exports impacted the world geopolitically in the sense that they
have constrained the geopolitical power of other producers. US exports are based on
market realities, and, hence, the US enters the market when there are profits to be
made. This makes international markets more liquid (Author’s interview with Anna
Mikuslka, June 30, 2020).
As costs are rising in the present time, industries are experiencing more difficult
times in affording oil. Indeed, there are numerous oilfield service companies that
have still not been able to overcome the impacts of the 2014 price collapse, as
recently reported by Weatherford International, one of the four prominent oilfield
service companies in the world. In such a context, if oilfield service companies
channel themselves toward Chinese manufacturing, it is inevitable that the global
supply chain will continue to be increasingly disrupted. On the other hand, there are
doubts as to whether Asian suppliers of lower quality will be able to meet increasing
demands. While channeling toward producers in Asia may be of benefit to US companies in the long term, it constitutes a risk for service companies with exceptionally low-profit margins, such as Canary, in the short term. Prior to the trade war,
China had not only been importing oil and natural gas from the US, but it was also
one of the three top US LNG importers. Currently however these imports have drastically reduced. One forecast regarding the future of LNG projects is that China will
hart/2019/05/20/neverending-us-china-trade-war-puts-energy-dominance-atrisk/#2eefe3772c6d 2019). As for the present time, while the increasing demand for
LNG in China has been the target of most projects in the US, where there are
approximately 30 LNG projects at different stages of development, China is actually seeking alternative suppliers of LNG in such countries as East Africa, Australia,
and Russia. Not only the interruption of oil imports from the US but also the tighter
sanctions imposed on Iran and Venezuela have caused China to lose access to
approximately one million barrels of crude oil imports per day. The alternative proEnergy Dominance