Report: U.S. Can Use Energy Clout to Pressure Russia, Ease Tensions
With China

Experts say America can use status as global energy power to advance national security goals

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• June 16, 2016 4:40 pm


The United States has been slow to recognize how its emergence as a leading energy producer can be used as leverage to build cooperation with China and apply pressure to Russia, according to a new report.

The U.S. government could take advantage of the modern energy market to reduce tensions with China by boosting cooperation in energy trade and also deal a blow to Russia by providing increased competition in the energy sector, a panel of experts from the Center for a New American Security write in a report released this month.

"The United States is not yet well positioned to take advantage of the new energy market circumstances to advance many of its national interests," the experts write in The New Great Game. "Unlike China and Russia, which reacted fairly quickly and are pursuing policies to counteract their energy vulnerabilities and expand resilience, U.S. leaders have been slower to grasp opportunities for advancing U.S. global leadership, balancing a tense relationship with China, and working to contain Russian foreign aggression."

Outdated U.S. policies are preventing the United States from using its position as a major energy power to advance national security and foreign policy interests and need to be altered, the authors write.

Russia and China forged an energy relationship two years ago that was fueled in part by "cool relations" between China and the United States, the report notes.

Western sanctions on Russia for its annexation of Crimea in 2014 drove Russian President Vladimir Putin to orchestrate his own "pivot to Asia," which led Russia and China to ink major energy deals and conduct joint naval exercises in the Mediterranean, Sea of Japan, and South China Sea. Russia also committed to sell S-400 surface-to-air missile technology and fighter jets to China.

"Both powers see themselves in a competitive or even conflictual relationship with the United States, however low-level, and this shared perception drives each to seek support from the other," the report states. "In the triangular relationship with the United States, supporting Russia helps China because it shifts U.S. strategic attention to the more flagrant behavior of Russia, and it tempts U.S. policymakers to offer side payments to induce China to help restrain Russian behavior."

However, the experts note, "Slowing Chinese energy demand, and proliferating Chinese natural gas options, have removed some of the urgency behind the Russia-China energy détente."

The United States could use the deceleration of Russia-China relations to cooperate with China on the energy front and compete with Russia.

Russia accounted for 11 percent of crude oil imported by China in 2014 while the Americas accounted for 9 percent. Africa and the Middle East supplied 68 percent of China’s crude oil imports, which reached more than 6 million barrels daily.

The United States has experienced "remarkable increases in oil and gas production from tight oil and shale resources" in recent years, the experts wrote, citing data showing that crude oil and natural gas production have increased by about 80 percent and 51 percent, respectively, since 2005. The United States has been the largest producer of oil and natural gas since 2012, when it surpassed Russia for the distinction.

Russia’s energy industry has suffered. Europe remains dependent on Russia for oil and gas, but recent provocations—notably Russian aggression in Ukraine—have given European countries reasons to wean themselves off Russian energy. European gas demand is also stagnant, and Russia is faced with competition from other oil producers like Saudi Arabia and Iran.

The experts write the United States is "not yet well positioned" to leverage the circumstances of the new energy economy because of old policies.

"‘Energy independence’ rhetoric from the 1970s and a protectionist and misleading view that the United States can be secure if it looks inward (or only to the relatively small renewable energy market) is still pervasive," the report states. "Policy leaders have so far largely failed to recognize opportunities to leverage energy market circumstances to address some of the most pressing national objectives with regard to advancing U.S. global leadership, balancing a tense relationship with China, and working to contain Russian foreign aggression."

"U.S. leaders need to update their perspectives and policies to reflect the country’s new position as a major energy power. Such a new approach must include a regard for energy as a means to develop and pursue shared interests on foreign policy goals, as opposed to a win-or-lose proposition, with a wide range of countries," the report continues.

The experts outline deficiencies in U.S. energy strategy and offered a set of recommendations for the nation to assert its status as a global energy power and use that clout to pursue foreign policy goals.

The report argues, among other things, that the next administration should "publicly outline a framework or doctrine for how the country will promote energy security at home and abroad." The framework would focus on prioritizing shared interests with international counterparts in order to create means of influencing key strategic relationships. The message would signal to the international community that the United States has assumed a "market role as a powerful energy producer."

The experts propose expanding energy trading with China and facilitating the exchange of data and expertise with China on energy-related issues.

"Many in Washington’s policy community do not realize the significant benefits that could be derived from leveraging U.S.-China shared energy interests to balance competition and hostility that exist in other areas," the report states. "Facilitating stronger communication and commercial interaction around energy interests may de-escalate tensions in bilateral ties and act as a deterrent to more aggressive competition in the security sphere."

"In turn, acknowledging and elevating commonality between the United States and China on energy interests may help China pursue access to non-Russian energy sources and balance Russia’s role in the Asia-Pacific," the report continues.

The experts do, however, acknowledge that Chinese cyber attacks on U.S. entities and China’s failure to completely transition to a free market economy have hindered cooperation between the two nations. Tensions have also escalated amid China’s island-building and aggressive territorial claims in the South China Sea, which have led to increased U.S. military patrols there. The report suggests, however, that further cooperation could ease these tensions.

The reports also advises the United States to confront Russia’s "coercive energy market activities abroad" by boosting cooperation with European countries to improve European energy resilience.

Leveraging its position as a leading energy producer will require the United States to maintain its "military superiority and forward presence" along energy trade routes in the Indian and Pacific oceans.

"In the long term, should Russia’s energy trade—and therefore its economic lifeblood—decline, Russia may either become more cooperative internationally or engage in diversionary aggression," the report says.

It recommends that the Pentagon take into account energy-related economic conditions when forming defense planning scenarios. It also urges the U.S. military to retain presence in the Western Pacific and "expand access and rotational presence agreements for U.S. forces along strategic energy trade routes."

Published under: China, Energy, Russia