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Oil rig around the US Capitol.
The greatest energy boom you’ve never heard of
“A few years ago, we were energy independent, now we’re begging countries to give us gasoline.” —Former president Donald Trump
“Joe Biden has destroyed US energy independence.” —Sen. Marsha Blackburn (R-TN)
“Since Joe Biden’s first day in office, he has waged an unprecedented war on American energy producers.” —House GOP
If we are to believe Republican politicians, President Joe Biden is waging a debilitating “war” on American energy. But is that true?
Not quite. After having to import massive amounts of foreign energy for most of its modern history, the United States became energy independent in 2019 – when Donald Trump happened to be president – thanks to the decades-long fracking and shale revolution. Domestic oil and gas production dipped briefly during the pandemic as global demand collapsed, but it quickly bounced back under President Biden.
Today, the US is the largest crude producer in the world by a mile, pumping out over 13 million barrels per day and accounting for nearly a fifth of the world’s total oil production. Indeed, the US is now producing more oil thanany country in history.
A similar story can be told for US natural gas production, which has also been setting record highs since recovering from the pandemic in 2021. As of 2022, the US exported far more natural gas than it imported – the bulk of which has been converted to liquified natural gas (LNG) and gone to Europe to ease the energy shortage created by the cutoff of Russian supplies in the wake of Vladimir Putin’s invasion of Ukraine. Last year, the US overtook Australia and Qatar as the world’s largest exporter of LNG, and the country’s export capacity is only set to continue growing.
Meanwhile, the US continues to deploy renewables, such as solar power and battery storage, at a significant rate. Together, these sources are expected to make up 81% of all new electric-generating capacity in the country this year. Such growth is in large part thanks to the exponential decline in the cost of these technologies, whose uniquely steep learning curves suggest they are going to get even cheaper as they get deployed further, in turn boosting adoption, getting more competitive, and so forth.
In short, the US has quietly but surely become the world’s top energy superpower. As Sen. Joe Manchin (D-WV) put it in a recent op-ed, “our country has never been more energy-independent than we are today.” Much like America’s hegemony in other realms, this newfound dominance does not come without certain geopolitical upsides.
For starters, America’s large and growing market share deprives Russia, Saudi Arabia, Iran, and other petrostates of both pricing power and geopolitical leverage, lowering energy prices and boosting geopolitical stability. This was evident in the aftermath of Russia’s invasion of Ukraine, when US energy exports played a major role in stabilizing global energy markets and bolstering European energy security. US oil supply growth has also kept oil prices relatively in check in the face of OPEC production cuts designed to prop them up.
Even with the “OPEC Plus” additions, the cartel currently controls less than half of the global supply of oil (and shrinking). Eventually, it will buckle under the realization that further production cuts will reduce rather than increase its revenues. When that happens, its members will give in and flood the market with more oil, sinking prices. Lower energy prices stimulate the global economy and help ease inflationary pressure.
Perhaps more speculatively (but even more exciting), domestic energy abundance could also usher in a new era of US technological advancement and productivity growth that increases living standards for all Americans and gives the nation a bigger edge in its budding competition with China. Granted, there’s more that goes into this than just ample cheap energy – but it’s certainly a good start.
If this all seems like tremendous news for America, that’s because it is. And yet, you probably haven’t heard anything about it. It’s just too politically inconvenient a feat for either party to acknowledge (let alone celebrate).
Take Republicans. They don’t want you to know about the energy boom under Biden because it contradicts a key attack line they’ve been using for decades to score political points: that unlike the pro-business, pro-American, pro-fossil fuel Republicans, ivory tower, coastal Democrats are hellbent on sacrificing the country’s energy independence, national security, and economy in a zero-sum crusade to save the environment. If it’s not happening, they don’t have to credit the opposition for it. Case closed.
Alas, it is happening, and Biden does deserve at least some credit for it. After Russia’s invasion of Ukraine sent global energy prices soaring, Biden backtracked on his campaign promise to cut domestic fossil-fuel production and urged US oil companies to “drill, baby, drill” to counteract “Putin’s Price Hike.” Since taking office, Biden has issued more permits for oil and gas drilling on public lands than Trump. His administration approved the controversial Willow oil drilling project in Alaska that had been stalled for decades and expedited the construction of an oil pipeline in West Virginia, and his marquee legislative achievements, the Inflation Reduction Act and the Bipartisan Infrastructure Law, have made it easier to invest in all forms of American energy.
The odd thing is that Democrats themselves (with few exceptions) don’t seem to want to take credit for the energy boom they’re presiding over, because record-high fossil-fuel production is – at least on the surface – an awkward fit with their climate goals and a major pain point with a progressive base the Biden administration is already struggling to appeal to on the back of the Gaza war. This was a major driver of the White House’s decision in January to freeze approvals of new licenses to export US LNG – a largely symbolic move that will lower electricity and heating prices for American consumers at the expense of our European allies (and, to a lesser extent, domestic natural gas producers).
But what climate activists and White House should keep in mind is that while drilling for oil and gas does exacerbate climate change in the near term by increasing carbon and methane emissions, the alternative to more American oil and gas isn’t more clean energy – it’s more foreign oil, gas, and coal. And foreign oil, gas, and coal are far dirtier than American oil and gas. However much we may wish it away, demand for fossil fuels isn’t going anywhere for the near future; if the US were to slash its supply tomorrow, other producers would step in to fill the gap, and overall emissions would rise.
For progressives’ ambitious decarbonization policies to really work, they have to be politically sustainable. That means that they have to bring ordinary people along, not just in the future but now, and the way to do that is by ensuring low and stable energy prices. Boosting US oil and gas production as bridge fuels at the same time as we invest hundreds of billions of dollars to make clean energy cheaper and wean the world off carbon does exactly that, trading slightly higher emissions today for much lower emissions tomorrow.
This is an accomplishment Biden should be running on, rather than away from.
Ian Explains: If the US steps back from Ukraine, can Europe go it alone?
Two years into Ukraine's all-out war with Russia, Europe has had to cut off nearly all energy imports from Moscow. Can Europe secure its energy future and defend itself without relying on Russia or, depending on the November election, the United States? Ian Bremmer explains on GZERO World.
Europe is facing a critical juncture in its energy and security landscape. When Russia invaded Ukraine, European leaders rallied for a united front. But in the ensuing two years, some of these intra-European ties have shown signs of fracturing. More concerningly, Europe is no longer confident it can rely on steadfast support across the Atlantic.
Depending on the outcome, the November election in the United States could signal a death knell for American support for Ukraine. With Trump's wavering commitment to NATO and Europe facing a future without Russian fossil fuels, the region is reevaluating its energy security and defense strategies. Europe remains vulnerable despite recent price drops and increased renewable energy capacity. The continent's post-pandemic recovery, climate change-induced weather extremes, and Putin's aggression have highlighted the urgent need for energy independence.
To put it bluntly, Ukraine needs Europe now more than ever, and Europe needs to ensure it is strong enough to provide the support Kyiv relies on. No amount of weaponry shipped to Ukraine's battlefields will matter if Europe can't keep its own homes lit or its factories running
Watch GZERO World with Ian Bremmer on US public television (check local listings) and online.
- The Graphic Truth: EU natural gas prices plunge ›
- The Graphic Truth: The European Union's energy mix ›
- Dambisa Moyo: Europe's energy transition needs more than a "band-aid solution" ›
- Who blew up the Nord Stream pipelines? ›
- Europe’s Russian gas dilemma ›
- Norway's PM Jonas Støre says his country can power Europe - GZERO Media ›
- NATO unity will hold no matter the US election, says Norwegian PM - GZERO Media ›
FILE PHOTO: The Canaport LNG receiving and regassification terminal in St. John, New Brunswick is seen in this October, 2008 handout photo. Repsol has signed natural gas supply deals from its newly built Canaport liquefied natural gas terminal in New Brunswick, Canada, the company said on June 19, 2009.
Canada hails second chance at LNG leadership
Critics of the Biden administration have had a field day with its decision to pause the expansion of America’s liquified natural gas exports, while it looks at the effect of exports on the environment, energy security, and energy costs.
Commentator David Bahnsen, managing director of the Bahnsen Group, told Fox Business the move will help one person: Vladimir Putin. He said more LNG exports would undermine Putin while pausing new approvals is a “foreign policy own-goal” that will drive prices higher.
The move has some policy analysts scratching their heads since Biden has hailed the delivery of US LNG to Europe and Asia as a geopolitical victory.
Conversely, the move is being hailed in Canada, where Energy Minister Jonathan Wilkinson said he is “really happy” that the US Administration is looking to reduce the carbon intensity of LNG. Judging by his comments, it doesn’t sound like Canada will follow suit. “My hope is that what we will see coming from this are policies that actually look a lot like what we’ve already done,” he said.
The Canadian environmental approval process for projects has been notoriously prolonged over the past eight years, but there are now two projects under construction. One – the Shell-led LNG Canada’s facility in Kitimat, British Columbia – is 90% built and has all the approvals it needs to start exporting next year. There are others in the pipeline, including the Ksi Lisim floating facility, north of Prince Rupert, B.C., which is partly Indigenous-owned through the Nisga’a Nation.
Biden’s move has pleased environmental groups but upset proponents of an industry that has gone from one billion cubic feet of production a day to 14bcf at seven LNG terminals in less than a decade.
Participants enter the Dubai Exhibition Centre during the COP28, UN Climate Change Conference.
Can climate activism and AI coexist?
AI is on the lips of climate-policy negotiators gathered for the United Nation’s COP28 conference in Dubai, and for good reason — it presents a high-risk but potentially high-reward scenario.
The upside: AI has the potential to supercharge efforts to find real climate solutions. For example, scientists can send AI-powered robots to collect data in the Arctic and other challenging environs, and the technology can also be used to improve forecasting for extreme weather and climate-related disasters. On an even more basic level, it can be used to maximize the efficiency of all kinds of systems and reduce their carbon footprint.
But there’s a big catch: AI is an energy-guzzler. One analysis found that AI systems worldwide could consume 85 to 134 terawatt-hours per year — equivalent to the electricity diet of Argentina or the Netherlands. That’d be good for half a percent of the world’s energy consumption. (This analysis is based on the sale of popular servers from US chipmaker NVIDIA, used by much of the AI market.)
At COP28, government and industry leaders made bold announcements. Boston Consulting Group said AI could reduce greenhouse-gas emissions by 5-10% by 2023. Meanwhile, the UN announced a deal with Microsoft to use AI to track countries' carbon-reduction promises.
Is the risk worth the reward? “Whether you like it or not,” says Shari Friedman, managing director for climate and sustainability at Eurasia Group, “AI is here to stay, so the job of humans will be to use it for the best purpose possible and maximize clean energy on the back end.”
Graphic Truth: Global fossil fuel subsidies on the rise
In 2022, the International Monetary Fund crunched the numbers and found that governments were spending a whopping $7 trillion on fossil fuel subsidies. The colossal sum spent on these grants and tax incentives was largely driven by the war in Ukraine and its ripple effect on energy prices. But it wasn’t an outlier; the trend had already been on an upward trajectory as economies surged in the Global South, which suggests it is likely to continue unless there is a global transition to green energy.
To put these numbers into perspective, government backing for fossil fuels represents over 7% of the world's GDP, dwarfing other crucial budget items like education spending, which amounts to a mere 4.3% of the global GDP.
According to the IMF, curbing these subsidies could not only realign humanity with climate goals but also save 1.6 million lives annually and boost government coffers by $4.4 trillion.
Episode 5: Energy transition today
Listen: "It actually all comes down to one thing and that's money," says Raad Alkadiri, Managing Director of Energy, Climate and Resources at Eurasia Group. "Will there be the money for investment in renewables, in energy efficiency made available? And I'm not just talking about the industrialized world, I'm talking about globally."
In the latest episode of Living Beyond Borders, a podcast produced in partnership between GZERO and Citi Global Wealth Investments, Alkadiri is joined by Malcolm Spittler, Global Investment Strategist and Senior US Economist at Citi Global Wealth Investments, to look at where the energy transition to renewable fuels stands globally, after setbacks from the pandemic and geopolitical instability.
They discuss the increasing need for energy security being a big driver for renewable energy in regions like Europe, how the war in Ukraine is still affecting energy markets, and what kinds of investments need to happen in technology and infrastructure to realize more sustainable and cleaner energy globally.
Malcolm Spittler
Global Investment Strategist & Senior US Economist, Citi Global Wealth Investments
Raad Alkadiri
Managing Director of Energy, Climate and Resources, Eurasia Group
Shari Friedman
Managing Director of Climate and Sustainability, Eurasia Group
- Episode 7: Future-proofing: How we fix broken supply chains ›
- Episode 9: US/China power struggle, the global political balance, and your finances ›
- Episode 1: Should I STILL be worried? ›
- S3 Episode 9: US/China power struggle, the global political balance, and your finances - GZERO Media ›
- Episode 6: Can the US and China find common ground? - GZERO Media ›
- Episode 7: How AI is changing our economy - GZERO Media ›
Europe grapples with insecurity, instability, and proxy war: Davos 2023
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here from Davos. We're just kicking off the annual forum in Switzerland, its 53rd Annual Meeting. And here I am in the cold, but not absolutely frigid, to talk with a bunch of global leaders and 52 heads of state showing up. 2,700 world leaders are going to be here for the week, and that means that you can get a hell of a lot of work done in a relatively short period of time.
Big issues to be discussed. Well, first and foremost, we are in Europe, and that means they are feeling a lot more negatively about the geopolitical environment than we are across the Atlantic. Why? Because the Russian invasion is affecting them directly. It's the permanent end of a 30-year long peace dividend for Europe. It means they are all dramatically ramping up their security spend. They think they're going to have to for the foreseeable future. It means that energy prices, even though they've managed to do a lot on that and they're lower than people expected, they're still a lot higher for the foreseeable future than they would otherwise want. And also, of course, because there are massive numbers of refugees that are being hosted in Europe still from Ukraine, and the concerns about insecurity, instability, what it means to be fighting a proxy, hot war against the world's largest nuclear power right across the border, that's something that people are still trying to grapple with on the mountains here.
Beyond that, a lot of talk about the fragmentation of globalization, about what it means that we're going to have multi-speed recession, some deep, some shallow, some not at all, all over the world this year. Technology companies, after they've been expanding for 10 years, some of them shedding employees. They're all still here, but not splashy in the way that they were, say last May. Post-COVID, as the world comes out of that, you don't see the same level of, "We are masters of the universe," for all of these tech companies. A little bit more caution there.
The Chinese are here, but of course, they're much more interested in big global fora that they are setting the standards of, that they are running, and that's very different from the precepts of globalization that have been driven by the World Economic Forum for the last 53 years. In that regard, talking about a fragmented world and can you find cooperation, which is the theme for this year's annual forum, is one that's very challenging. Can you find global cooperation if people don't do global anymore? I mean, there are a lot of global things of course, climate change is very global, but the advanced industrial economies are focusing mostly on their own populations. They're not spending a lot of money trying to take care of the poorest in the world. And in fact, on the back of the pandemic, on the back of the Russian invasion of Ukraine, and on the back of growing climate change, the biggest challenge that we see as a global order is a growing gap between West and South. The fact that human development indicators have actually been worsening now for three years after 50 years of consistent improvement from globalization.
That's a message that should be front and center for every CEO that's attending the World Economic Forum this week. But of course, it won't be. Why? Because the difference between globalization and globalism is real. And the fact of free market capitalism continues to be not only driving a lot of wealth and growth, but also a distributional challenge for a majority of the 8 billion people now living on the planet. It's a challenge that the WEF is certainly trying to grapple with, a challenge we'll see to what extent the attendees actually are interested in talking about. That's it for me. I'll talk to y'all real soon.
- Ian Bremmer: Russia's war in Ukraine makes Davos "discomfiting" ›
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- Live From Davos 2023: Risks and Rewards of AI ›
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Dambisa Moyo: Europe's energy transition needs more than a "band-aid solution"
Most countries around the world understand that sooner or later they will need to transition to using more clean energy. But in the meantime, they still rely on over a hundred million barrels of oil per day.
What's more Russia's war in Ukraine has underscored our dependence on fossil fuels for energy.
“We hadn't anticipated that there'd be a war that would create these shocks. And that puts us slightly offside,” renowned economist Dambisa Moyo tells Ian Bremmer on GZERO World.
And what's the right way to move forward? For Moyo, Europe needs to ditch what she calls "industrial band-aid solutions" instead of the structural reforms needed to kick the Russian energy habit.