The American Council for Capital Formation (ACCF) has released a new paper: ‘US Resource Nationalism: The Impact of Energy Trade Restrictions on National Security’. According to ACCF research, the US is missing an opportunity to become a global powerhouse as antiquated federal laws that limit energy exports are undermining long term foreign policy interests while violating international trade commitments.
"With the Obama Administration's announcement of a nuclear agreement with Iran that will lift oil sanctions, it's now more critical than ever that we remove our energy trade restrictions as soon as possible. If the US continues to be the only leading nation with limits on domestically produced exports, our global leadership and credibility will be in jeopardy," said George David Banks, Executive Vice President of ACCF. "Geopolitical impacts from the shale revolution have the potential to transform the global market with the promise of greater energy and political security for the world. The US has a tremendous opportunity to pull the levers of energy diplomacy to ensure our allies and emerging economies have access to the energy they need while supporting peace around the globe, but unfortunately, our current energy trade restrictions are standing in the way."
The ACCF discusses a number of policies in the paper, specifically those related to curbing LNG exports, the ban on exportation of domestically produced crude oil, localised review process for exporting coal, and trade in civil nuclear technology. According to the ACCF, efforts by those impeding repeal or reform of these restrictive laws embrace ‘resource nationalism’, the use of government intervention to control the trade of a resource in order to pursue a benefit perceived as unavailable under free trade. In practice, only a small number of special interests receive the benefit, for example protection from foreign competition, while the vast majority of American consumers are harmed economically.
The ACCF paper also focuses on the negative impact of energy trade controls on allies in East Asia, specifically Japan, South Korea, and Taiwan. The paper notes that US resource nationalism harms the economic and energy security of these important allies by denying or limiting direct access to resources and by reducing global supplies, resulting in higher energy prices.
"While the policy of resource nationalism is tempting to many, it's a misguided one, providing only short term benefits to certain special interests. It is not the path forward for the US. Rather than restricting energy trade, we must take a leadership role in protecting free trade of all our strategic resources to further global economic growth and stability," Banks continued.
Banks also highlighted the increase in resource nationalism arguments in the US when it comes to maintaining restrictions on LNG exports and the crude oil export ban, and noted the conflicting nature of these policies when it comes to the pursuance of legal action in the World Trade Organization (WTO) against similar policies from countries such as China. This serves to complicate Washington's ability to continue pursuing these WTO actions as well as defend any possible challenges brought against the US by other parties. "It is time for Washington to act quickly and remove these outdated barriers that have no place in the new American energy landscape of the 21st century," Banks concluded.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.hydrocarbonengineering.com/refining/16072015/accf-highlights-impact-of-energy-trade-policies-on-national-security-1110/