America's homegrown energy security

By Justin Burke in Sydney, Australia

7 October 2011


Shale gas workers

“Energy independence” is a perennial topic on the presidential campaign trail. Richard Nixon first used the phrase in a 1973 speech following the Yom Kippur War and the Arab oil embargo. Its virtues have been proclaimed by all the serious contenders in the current Republican field; for instance, Texan Governor Rick Perry has said, “We cannot and must not endure four more years … of rising energy dependence on nations that intend us harm.”

This follows the conventional wisdom that America’s addiction to foreign — read: Middle Eastern — energy makes it vulnerable to extortion at the petrol pump and funds America’s enemies, including terrorists. It must be said that almost half of America’s foreign oil comes from its near neighbors like Canada, Mexico, and Venezuela, followed by African sources like Nigeria, and Persian Gulf sources like Saudi Arabia. However the global market for energy has much in common with a swimming pool: adding or removing water — energy supply — from one side of the pool raises or lowers the water level — price — across the pool.

When the campaign ends, the twin realities of governing and global markets tend to reframe the challenge as “energy security,” with less emphasis on zero-imports and more on the availability of sufficient energy supplies at affordable prices. Winston Churchill summed up this line of thought, having famously converted the British Royal Navy from coal to oil, with “Safety and certainty in oil lie in variety and variety alone” in terms of suppliers, routes and grades.

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But do the presidential hopefuls have it wrong? From either the independence or security perspective, it is substantially underappreciated how much America’s energy position has recently strengthened from discoveries both at home and in the Western Hemisphere.

Natural gas is a key source of energy for electricity generation. Until recently, America’s reserves of conventional natural gas were falling and large scale imports of LNG (Liquefied Natural Gas) from countries like Qatar were universally anticipated.

Technical innovation and old fashioned persistence by explorers in Texas unleashed an enormous new supply of gas from shale rock right across America. The technique, known as hydraulic fracturing, involves drilling a borehole and injecting water, chemicals, and sand at high pressures to fracture the rock and liberate the oil or gas. It is environmentally controversial. Nonetheless, from its origins in the Barnett shale region near Dallas, Texas, the boom has spread across the country to the now famous Marcellus structure under western New York, Pennsylvania, and West Virginia.

As recently as ten years ago, shale gas contributed around 1 per cent of America’s gas supplies. Today it is 25 per cent of gas supply and could reach 50 per cent in the coming decades. The estimated 3000 trillion cubic feet of gas reserves in America could supply current levels of consumption for more than 100 years. 

Oil is the predominant source of energy for transportation. New technologies have made as much as 11 billion barrels of oil recoverable in the Bakken formation under North Dakota and Montana, creating old fashioned boom towns and reducing America’s import needs in the future.

Elsewhere in the Western Hemisphere, discoveries and rising production promise to substantially lessen dependence on West African and Persian Gulf suppliers. Canada, already the top petroleum exporter to America, expects a doubling of tar sands production to 3 million barrels per day by 2020, with a controversial 1 711 mile pipeline proposed to carry the oil to Oklahoma and the Gulf Coast.

Brazil’s astounding offshore fields are likely to reach production levels in line with Iran — 5.5 million barrels per day — by 2020. Columbia’s production is rising, and Argentina recently made its biggest oil discovery since the 1980s.

The consequences of these technologies and discoveries are not only improved energy security, but when considered in combination with the turmoil of the Arab Spring, may lead to a reordering of geopolitics. In a recent article in Foreign Affairs magazine, Dr Amy Myers Jaffe contends that it is already taking place. In addition to the discussion above, the potential for US companies to export the new horizontal drilling and fracturing technologies to Europe and China, potentially reducing their demand for Russian and Persian Gulf energy supplies, could have an enormous impact. As Myers Jaffe says, “Watch this space: America may be back in the energy leadership saddle again.”

Cross posted at American Review.

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Exotic or Toxic? Latinos in America

By Justin Burke in Sydney, Australia

29 August 2011


Cover of Business Week magazine illustrating a Latino man transitioning from a desert to a suburban environment

Manuel Vasquez, an associate professor at the University of Florida, recently delivered the keynote address to the Imagining Latin America in Australia [PDF] Workshop at the University of Western Sydney. His address was titled The Exotic Other or the Toxic Other?: Images of Latin American Immigrants Post-9/11.

Vasquez highlighted that:

  • Latin American immigration shifted in the 1990s from the traditional "Gateway" cities of Miami, Los Angeles and New York to places less accustomed to immigration, such as Raleigh, Atlanta and Omaha.
  • Whilst digital media has enabled groups to organize and find a voice, this also includes "nativist" and far right wing groups.
  • 9/11 led to the "securitizing" of the border and a public panic about "otherness," with similarity to past panics like the Yellow Peril. Many Americans have sought refuge in Kantian certainties and shunned complexity: Latino equals Mexican, which equals illegal, and illegals should be deported — therefore all Latinos should be deported.

Vasquez presented some fascinating images. The first was the July 2005 cover of Business Week. It’s a great representation of the notions of otherness and assimilation. The left hand side depicts a darkened and threatening borderland, and a man in dirty clothing clutching belongings — perhaps in a sheet or a cheap bag. The right hand side shows the man stepping into the light of American suburbia. He wears nice clean clothes, sports, carries an armload of consumer purchases, and looks forward with optimism. It struck me how many of the same themes were explored in John Gast’s American Progress — darkness and light, barbarism and civilization — but with the migration occurring in reverse.

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American Progress by John Gast

American Progress, by John Gast

Vasquez explained how the image of Latinas had morphed from the hypersexualised exotic woman — Jennifer Lopez, Shakira — and the devoted Latina mother into the hyperfertile producer of an invasion force of (brown) anchor babies, threatening the English language and Anglo-American norms.

He showed a short clip from August 2010 of Texas lawmaker Debbie Riddle, who claimed that irregular immigration and so-called "anchor babies" were in fact part of a long term terrorist plot. It shows how quickly being "illegal" can be conflated with "terrorist."

Moreover, that was the message of Vasquez’s presentation: Don’t be passive to stereotypes — even if they appear benign or even positive. In times of stress, they can quickly become toxic.

Vasquez discussed how impossible progress was at this time, as signified by the failure of Congress to pass the DREAM Act. This bill was meant to create a pathway to citizenship for people who had been brought to America as young children by their parents as irregular migrants. These children grew up as Americans, went to American schools and only perhaps as young adults found out that they are not American citizens. President Barack Obama has recently reversed his policy of “enforcement” and accelerated deportations, aimed at winning Republican support for this bill. It failed to pass and is not likely to be reattempted.

It was clear from Manuel Vasquez’s presentation that in dealing with this climate of toxicity, plus the pain of the depressed economy, it is a very tough time for the Latino community in America.

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The (economic) One we have been waiting for

By Justin Burke in Sydney, Australia

12 August 2011


Republican presidential candidate Mitt Romney and wife Ann

USSC CEO Geoffrey Garrett said earlier this week on ABC News Breakfast that it was “not a good time to be a sitting President” and predicted voters will punish President Obama in 2012 for high unemployment, flat housing prices and a possible double dip recession. Save for an October surprise, I believe Garrett is correct in predicting a return to elections decided on “the economy, stupid” rather than the recent 911/Iraq War elections of 2004 and 2008.

The modern presidency has certainly accumulated a range of responsibilities not intended by the Founding Fathers. The President is now not only expected to be the “Bringer of Hope” and “Leader of the Free World,” but also the “Economic Magician-in-Chief.”

It must be said that the ability of the President to fix the economy and create jobs is vastly overstated. To be sure, fiscal policy and the regulatory environment are a big part of the puzzle, but there is no magical lever for the “animal spirits” that actually create jobs and demand in an economy.

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One criticism of President Obama’s economic record hits the bullseye: the stimulus was too small and was poorly executed by Congress. At a time when America’s public infrastructure (airports, schools and collapsing bridges) is crumbling and Treasury can borrow at rates close to zero, the political leadership in Washington ought to have borrowed and made investments that could accrue substantial economic benefits over time. Economist Joseph Stiglitz made this point on Tuesday in the Financial Times, but laments that “the politics, however, are elsewhere”. President Obama has lost the initiative to the Tea Party and their anti-deficit fetish.

I agree with Garrett when he goes on to suggest that after the Tea Party has mauled the President sufficiently, moderate Republican Presidential candidates like Mitt Romney, or possibly Jon Huntsman, will emerge, claiming the wherewithal to lead the country back. The axiom is “Democrats fall in love, but Republicans fall in line,” and Romney will most likely gain the nomination despite misgivings over his religion and gubernatorial record.

Mitt Romney has a very impressive commercial and managerial record, and since voters’ desire for presidential economic leadership is not going away, in this respect Romney may truly be “The One we have been waiting for.”

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