Oil, Gas and Failed US Foreign Policy

Original Article

What if the US in recent years had allowed gas fracking on public lands and had, for example, permitted the Keystone Pipeline to be built? What if instead of preventing oil and gas development, that is, we had supported it?

What if we and the European Union had encouraged fracking attempts in Poland and Ukraine instead of looking away as business was made difficult for private companies in the region?

For one thing, we and the Europeans would be in a much stronger position in Ukraine right now and Ukraine would have a better chance at economic survival.

Russia, of course, is the beneficiary of US and EU diffidence. The Russians’ main income sources are oil and gas. The Russian pipeline to Europe runs through Ukraine and Russia has not been shy about using it to intimidate Eastern European governments. (A 20 percent “discount” is offered to friends.) But if we and the EU had encouraged regional sources–which would have meant urging regulatory reform, for example, and stamping out corruption–the gas story would have been much brighter. Instead, most Eastern European fracking efforts have been thwarted.

President Obama and the US and EU left have thus handed Vladimir Putin a very handy weapon to control the former Soviet satellites. He has gas, they need gas.

Agonized Venezuela is another casualty of US failure to develop its petrol power. Chavez and now Maduro are propped up by the high international price of oil. Otherwise, the authoritarian socialist regime in Venezuela would collapse. So, here is another foreign policy failure traceable to misplaced environmental limits in the US.

Ukraine under the recently ousted regime was one of the best examples of how corruption foiled fracking development. President Yanukovyich and his son were elbow-high in payoffs. Even world-wise US petroleum companies could not operate in such a situation.

Therefore, while it is very nice for the Obama Administration and the EU to shake their fists at the Russians for the invasion of Crimea, a more effective retort would be to encourage gas development in Ukraine, Poland, Lithuania, etc. And also to get serious about our own resources in the US. We live in a connected world and failure to use our own resources ultimately is damaging us and our friends internationally. In a real sense, it also is disrupting world peace

Bruce Chapman

Cofounder and Chairman of the Board of Discovery Institute
Bruce Chapman has had a long career in American politics and public policy at the city, state, national, and international levels. Elected to the Seattle City Council and as Washington State's Secretary of State, he also served in several leadership posts in the Reagan administration, including ambassador. In 1991, he founded the public policy think tank Discovery Institute, where he currently serves as Chairman of the Board and director of the Chapman Center on Citizen Leadership.