January 20, 2015

SOTU: Elizabeth Rosenberg on the Falling Price of Oil

By Elizabeth Rosenberg

This year must be a pivotal one on energy policy. The dramatic fall in oil prices over the last six months, by almost 60 percent, and the economic and political fallout that will occur in this country and abroad compound the serious need for Presidential leadership on energy now.

At present, U.S. consumers are relieved by lower gasoline prices, economic planners are enthusiastically anticipating a GDP bump, and security strategists appreciate the extra pressure this puts on rogue states. However there are worrying future effects of this drop. Eventually, lower prices will clip U.S. energy investment, technology innovation, trade leverage and our global energy edge. 

Internationally, the loss in revenue can undermine economic solvency and stability in major energy producing states such as Venezuela, Iraq, Nigeria and Russia, with potential strategic implications for the United States. Also, our allies in Europe and Northeast Asia will be less secure as the U.S. energy sector pulls back. For these allies, a robust U.S. energy sector promises a more stable global oil market and the potential to buy oil that does not traverse conflict zones or geographic hot spots.

President Obama should promote responsible development of crude oil, gas, renewables and energy efficiency technology, and expedite the export of crude oil and LNG. This will be challenging work in a low price environment. But it will be more important than ever to maintain U.S. economic growth in this key sector and promote the diversification of global energy markets that is so fundamental to energy security.

  • Commentary
    • United States Institute for Peace
    • November 3, 2022
    The Geopolitics of Deep-Sea Mining and Green Technologies

    Demand for exploiting minerals on the seabed is rising. But the hasty development of a DSM regulatory framework could heighten geopolitical competition and environmental degra...

    By Jocelyn Trainer

  • Commentary
    • December 11, 2020
    America’s 2021 Counterproliferation Finance Agenda

    The incoming Biden administration will have an opportunity to strengthen America’s counterproliferation finance regime....

    By Jason Bartlett

  • Commentary
    • World Politics Review
    • July 7, 2020
    Why Stopping Environmental Crime Is a Matter of National Security

    Last week, the presidency of the Financial Action Task Force, the global intergovernmental standard-setter for combatting illicit financial threats, passed from China to Germa...

    By ​Neil Bhatiya

  • Commentary
    • May 22, 2020
    Energy Markets, Geopolitics, and COVID-19

    On May 14, members of the CNAS Energy, Economics, and Security (EES) program held a Twitter conversation on the impact of COVID-19 on energy markets and geopolitics. EES Progr...

    By Sam Dorshimer & Abigail Eineman

View All Reports View All Articles & Multimedia