Center for a New American Security

Last week, Tom Donilon, National Security Advisor to the President, spoke at the launch of Columbia University’s Center on Global Energy Policy. In his speech, Donilon discussed the interplay of increased domestic production of oil and gas with U.S. national security and foreign policy. Donilon highlighted 5 key themes in this interrelationship:

1) A stronger domestic economy. Donilon tied the economic benefits of cheap and abundant natural gas, including job creation in the form of a manufacturing renaissance in energy-intensive and gas-dependent sectors, to American influence abroad: “Our strength at home is critical to our strength in the world, and our energy boom has proven to be an important driver for our economic recovery—boosting jobs, economic activity, and government revenues.” 

2) Increased flexibility and leverage in foreign policy. In particular, increased domestic production of oil helped to maintain the stability of global oil prices by offsetting the reduction of 1 million barrels of Iranian crude from the international market due to increased sanctions on Iran. Greater flexibility in global supply allowed the United States and the EU to tighten sanctions and further discourage Iran from pursuing nuclear weapons. And they were effective – Iran’s oil exports fell by 39 percent in 2012, which will not go unnoticed by a government that is dependent on oil for over half its revenue.

3) A more globally robust natural gas market. The benefits of a more robust global gas market  include a diversity of supply, delinking of gas prices from oil indexed contracts, less leverage of “traditional dominant natural gas suppliers” (i.e. Russia over Europe), and natural gas “bridging” to a less carbon-intensive economy. Ultimately, DOE’s upcoming decisions whether or not to approve the construction of LNG export terminals will determine the extent of a globally integrated gas market.

4) Maintained commitment to the Middle East. Increased domestic production is not an excuse for global retrenchment. Reduced dependence on Middle Eastern oil does not negate other U.S. security interests in the region. In Donilon’s words:

We have a set of enduring national security interests in the Middle East, including our unshakeable commitment to Israel’s security; our global nonproliferation objectives, including our commitment to prevent Iran from acquiring a nuclear weapon; our ongoing national interest in fighting terrorism that threatens our personnel, interests and our homeland; our strong national interest in pursuit of Middle East peace; our historic stabilizing role in protecting regional allies and  partners and deterring aggression; and our interest in ensuring the democratic transitions in Yemen, North Africa and ultimately in Syria succeed.

It is important to note that Donilon does not mention “energy independence” in his speech. Despite politicians’ consistent rhetoric to the contrary, “energy independence” is a misnomer. Oil is a global commodity, and international events that hinder supply will affect the price of oil in the United States. As a result, continued U.S. engagement in the world is necessary to ensuring greater stability in energy markets.

5) Climate change as a national security challenge. Donilon views the increased frequency and severity of natural disasters domestically and internationally as a threat to national security. The potential instability wrought by climatic changes can be a threat multiplier and can impact military installations around the world. For Donilon, “this underscores the need – for the sake of our national security -- to reduce the greenhouse gas emissions that drive climate change and to ensure that we are as prepared as possible for the impacts of climate change.”

Tonight is the third and final presidential debate, and it will focus exclusively on foreign policy. Viewers can expect to see significant attention given to Afghanistan, China, Iran and Libya. CNAS published a “National Security Guide to the 2012 Presidential Election” earlier this month that lays out some of the key decision points on a range of issues, such as the defense budget, cyber security and Afghanistan.

One issue that has received very little attention in the debates so far is climate change, which is disappointing when one considers that some of the most important decisions regarding U.S. policy on climate change will need to be made in the next administration in order to avoid potential climate tipping points that scientists say could “lead to increasingly rapid and irreversible destruction of the global environment.” Indeed, the International Energy Agency has already warned that – even with the recent global recession – global carbon emissions continue to rise, pushing the world closer to irreversible damage to the environment. The IEA added last year that unless serious efforts are taken in the next five years to curb global greenhouse gas emissions the world may be unable to avoid “dangerous climate change” and its attendant consequences, including more frequent and severe drought like the kind witnessed today in the American midwest.  

But policymakers don’t need to wait five years or more to see how climate change may take its toll on U.S. security and foreign policy interests. One need only look to the Arctic – which recorded record low sea ice this summer – to see where climate change is already complicating U.S. foreign policy. The opening of the Arctic is placing increased pressure on U.S. policymakers to assess U.S. interests in the region and to navigate potential international challenges that could manifest from increased activity in the High North.

Yesterday, Secretary of State Hillary Rodham Clinton delivered a speech at Georgetown University on “Energy Diplomacy in the 21st Century” where she outlined three pillars of America’s energy foreign policy strategy: energy diplomacy; energy transformation; and energy poverty. (See the details of those three pillars at the State Department’s Bureau of Energy Resources.)  

In her speech, Secretary Clinton made explicit ties between energy and climate change:

“[E]nergy is essential to how we will power our economy and manage our environment in the 21st century,” Secretary Clinton said. “We therefore have an interest in promoting new technologies and sources of energy – especially including renewables – to reduce pollution, to diversify the global energy supply, to create jobs, and to address the very real threat of climate change.”

Photo: Secretary of State Hillary Rodham Clinton delivers a speech on “Energy Diplomacy in the 21st Century” at Georgetown University on October 18, 2012. Courtesy of the U.S. State Department. 

It seems inevitable that the soft power side of the natural security world will take a hit in the upcoming round of budget cuts. Foreign operations already took sizable hits earlier this year just based in the FY 2011 and 2012 budgets, and there is a strong sense in our community that this is just the tip of the iceberg.

Hu Jianto is in Washington this week having already spent much time in the Western Hemisphere. Along with his previous trips to the United States, Hu has visited numerous Latin America (LATAM) countries as China has cultivated an increasingly strong relationship with the region. Although China is not as established in Latin America as in other regions around the world, trade between Beijing and America’s neighbors to the South have grown substantially in recent years. Driven in part by the United States’ own indifference to the region, PRC-LATAM trade grew tenfold between 2000 and 2007. By 2008, it had reached 142 billion dollars.

Although over half of the countries in the world that formally recognize the Taiwan government's rule are located in Latin America and the Caribbean, this is at most a secondary interest for China in the region. Instead, Beijing’s interest in LATAM is driven by the same concerns that have caused it to increase its presence elsewhere: the need to secure the primary commodities that are essential to its economic growth.

Unsurprisingly, energy plays an important role in the PRC-LATAM relationship. Chinese companies have purchased large stakes in the oil fields of countries such as Ecuador, Argentina, Peru, Columbia, Brazil and Venezuela. In some cases, the LATAM states are unable to extract this petroleum without the assistance and resources of these foreign companies. In some ways then, the active presence of China benefits the region. At the same time, it impairs indigenous development. Additionally, because Chinese companies supply their own labor, which they bring over from China, it also impedes employment for the indigenous labor market.