Commentaries on current events, political economy, and the Communist movement from a Marxist-Leninist perspective.
Zigedy highly recommends the Marxist-Leninist website, MLToday.com, where many of his longer articles appear.
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Wednesday, July 26, 2017
More on Energy Imperialism
days after my last post
on the changes in US energy policy and its influence on the
trajectory of US imperialism, President Donald Trump and his energy
secretary proclaimed those changes in their customary blunt and
bombastic way. On June 29, Trump declared a US policy of “energy
dominance” at a meeting at the Department of Energy. Reuters‘s
headline on their coverage perfectly captured the meaning of this
Seeks to Project Global Power through Energy Exports.”
Gennifer Dlouhy quotes Trump: “We are a top producer of petroleum
and the No. 1 producer of natural gas. We have so much more than we
ever thought possible. We are really in the driver’s seat.”
Russia is a target of the emerging policy. The Administration’s
Secretary of Energy, Rick Perry said that “... the entirety of the
EU totally get it that if we can lay in American LNG [liquefied
natural gas] ... we can be able to have an alternative to Russia…”
“The US will be able to clearly create a hell of a lot more friends
by being able to deliver them energy and not being held hostage by
some countries, Russia in particular.” (Reuters)
anyone fail to get the message, Trump told cheering Polish people in
Warsaw on July 6: "We are committed to securing your access to
alternate sources of energy, so Poland and its neighbors are never
again held hostage to a single supplier of energy.” (CNBC)
Instead, they will be held hostage to the US.
Dlouhy notes that negotiations have begun to sell more LNG to the
Republic of Korea. And Reuters’s
Timothy Gardner comments that the US exports more petroleum products
to Mexico than does any other country. In fact, according to Gardner,
the US is already the world’s largest exporter of
refined petroleum products.
the near total neglect of the foreign policy implications of this
emerging policy by US commentators and, especially, the left, they
have not gone unnoticed in important circles internationally. Writing
in the largest circulation UK paper,
The Sunday Times, Irwin Stelzer
stated on July 2: “LNG has created a new Great Game, with America’s
‘yuge’ reserves of natural gas giving Trump a weapon with which
to offset Russia’s early lead.” Talk of “Great Games,” of
course, invokes memories of the imperialist rivalries and clashes of
the late 19th and early 20th century. While the “Russia-gate”
controversies uncritically consume many US observers, even
conservative Europeans are identifying the material
interests, the imperialist interests standing behind the hysterical
Stelzer sees the recent Gulf States’ aggression against Qatar for
what it is: “... the Saudi royal family believe now is the time to
wring a total surrender from Qatar… The implication for the global
LNG market of a potential isolation of Qatar [the world’s largest
exporter] could not be more consequential.” And it could not be
more beneficial to the emerging US LNG shippers.
recent Trump European trip was a sales trip for US LNG as much as it
was participation in the G20 summit.
‘Monopoly’ versus US Hegemony
appears more and more likely that the era of OPEC dominance of energy
markets is dwindling, broken by US energy production. Saudi Arabia
attempted to reverse the expansion of US production by over producing
and driving the price of oil below a level that would allow US shale
producers to be profitable. Consequently, US operators lost $130
billion since 2015. But Wall Street has subsidized the shale industry
by ploughing $57 billion back into the industry over the last 18
months, a move that shows both no fear of a price war and a
determination to dominate the markets. The
Wall Street Journal (7-8-2017)
likened the investments to the tech boom of the past.
the same time, the US is using political
sanctions to hinder competitors. The recent Senate
Russian sanctions is one obvious example. But Iran is another
competitor that the US hopes to discourage. The European sanctions
are now lifted, but EXXON MOBIL and CHEVRON, as US companies, are
still deterred from investing in Iran because of remaining US
sanctions. BP is afraid of those sanctions and only French TOTAL has
dared to invest, along with CHINA NPC. Where Iran is seeking $92
billion in energy investments, it has only secured $1 billion.
most energy investments have channeled to US shale oil.
monopoly price-manipulation model enforced by OPEC discipline is
eroding. Since competition is intensifying, pricing has become
extremely volatile. With Chinese imports of crude oil up 13% this
year, the Saudis have sharply cut the price of super light crude to
Asia to garner a greater share of this burgeoning market.
course, it is impossible to spell out all of the foreign policy
implications of the new energy imperialism. But it appears certain
that the US drive toward energy dominance will reshape US imperialist
designs and generate a strong international response.
House of Representatives companion bill on sanctions passed 419-3,
demonstrating again the ruling-class consensus on punishing oil and
gas producers-- Russia and Iran. The European Union wisely interprets
this and its Senate companion as a challenge to existing energy
relations. As The New York Times
reported (July 25) immediately after the vote: “...the new
sanctions have important implications for Europe because they target
any company that contributes to the development, maintenance or
modernization of Russia’s energy export pipelines.” It notes
that: “Jean-Claude Juncker, the president of the European
Commission, the bloc’s bureaucratic arm, has called for an urgent
review of how the European Union should respond.”
to the “principles” behind the House bill, Russian “Alexey
Pushkov, a legislator and frequent commentator on international
relations, wrote on Twitter: ‘The exceptional nation wants to block
Russian gas supplies to Europe and to sell expensive shale gas from
the U.S. to its European servants. That’s the entire ‘morality’
of Congress,’” as reported by The
New York Times (7-25-17)
the price war between the US and OPEC along with its friends has left
OPEC unity in danger and its policies in shambles. At the most recent
meeting in St. Petersburg, disputes over production and exports have
combined with frustration over the effectiveness of agreements.
States are conflicted over protecting prices and earnings or fighting
for market share.
unbridled competition arises, conflict is soon to follow. With
economic interests joining with political maneuvering, as the
US-contrived hysteria over Russia and Iran instantiates, the danger
of aggression and war grows exponentially.
new US imperialist “Game” is played to dominate energy markets,
an even more perilous project that threatens friend and foe alike.