The Energy 202: Trump gets one thing right when it comes to energy and Russia

Source: By Dino Grandoni, Washington Post • Posted: Sunday, July 16, 2017

President Donald Trump and Russian President Vladimir Putin meeting in Germany. (AP Photo/Evan Vucci, File)

While getting many of the finer points wrong, President Trump delivered a larger message Wednesday night about U.S. oil and gas production while defending himself from charges of collusion with Russia during his campaign that is  — somewhat uncharacteristically for this president on this topic — correct.

In an off-the-record conversation with reporters on Air Force One that the White House in part made public on Thursday, the president promised that he is “going to produce much much more energy than anyone else who was ever running for office. Ever.”

After moving slightly off-topic, as the president is wont to do, Trump continued:

Now, why does that affect Russia? Because Russia makes its money through selling of oil, and we’ve got underneath us more oil than anybody, and nobody knew it until five years ago. And I want to use it. And I don’t want that taken away by the Paris accord. I don’t want them to say all of that wealth that the United States has under its feet, but that China doesn’t have and that other countries don’t have, we can’t use. So now we no longer have the advantage. We have a tremendous advantage. We have more natural resources under our feet than any other country. That’s a pretty big statement. Ten years ago, five years ago even, you couldn’t make that statement. We’re blessed. I don’t want to give it up. I don’t want to say oh, okay, we won’t use it. But think of it. So, if Hillary is there, you’re going to have a far less amount of fuel. Therefore, energy prices will be much, much higher. That’s great for Russia.

Trump does get a few details wrong in his description. First, it’s doubtful that any one country today, including the United States, can make energy prices “much, much higher” by withholding its energy supply. In an earlier era, the Organization of the Petroleum Exporting Countries (OPEC), a cartel of oil-producing nations, could spike oil prices and cause long lines at gasoline pumps by keeping its product from international buyers. But in the current world economy, even OPEC has lost control the world’s oil market.

Elsewhere in the conversation, Trump also claimed that if Hillary Clinton were president, “you’d be doing no fracking.” This is difficult to imagine. During the campaign, some environmentalists criticized the Democratic candidate for failing to promise to ban or significantly curtail hydraulic fracturing, or “fracking,” in the United States. Indeed, as secretary of state, Clinton established an initiative prompting countries to open their borders to fracking projects by U.S. oil and gas firms.

Trump also claimed, among other things, that “we’ve got underneath us more oil than anybody” (according to Trump’s own government, the United States is actually No. 11 in reserves) and that the Dakota Access pipeline, which Trump revived after the Obama administration shut it down, “takes it to the Pacific” (in fact, the pipeline stretching from North Dakota to Illinois links up to an existing pipeline network that delivers oil to Midwestern and Gulf Coast refineries). Politico catalogued even more inaccuracies here.

But in very broad strokes, Trump is correct. Indeed, Russia would very much prefer to be in the position of exporting oil and gas to the United States — or practically any other country — instead of having the United States produce its own fuel. Selling off oil and gas keeps Russia’s underdeveloped economy chugging along. And it is from that position as energy supplier that Russia has kept Ukraine and other Eastern European nations in its grip by occasionally threatening to cut off their pipelines.

Instead, the Trump administration is pushing to export more U.S. natural gas to countries that currently buy from Russia, like South Korea and Poland. In a report published Thursday, the International Energy Agency predicted U.S. gas exports will be on par with Russia’s by 2022 as shale gas production ticks up over the next five years.

And the Dakota Access pipeline could play a role in that export boom — by connecting Bakken oil in the United States and Canada to international markets through the Gulf of Mexico — though that is, again, not how Trump described it.

Of course, using Trump’s pro-fossil-fuel push as an argument for why Trump ultimately doesn’t have Russia’s interests at heart is complicated by ExxonMobil. For years, the largest U.S. oil and gas company has sought to work with Rosneft, a Russian state-owned oil company, to drill in the Russian Arctic only to be foiled by Obama-era sanctions after Russia annexed Crimea and used force in east Ukraine. So far, Exxon and the White House both have raised concerns over the Russian sanctions package that passed the Senate last month and is stalled in the House.

Still, Trump’s “energy dominance” agenda could be marshaled as a counter-message as the Russia scandal engulfs the White House — if only Trump didn’t undermine himself by getting the details wrong.