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.