Foreign Competition Drives American Oil into the Ground
The past decade has been a remarkable one for America’s homegrown fossil fuel industry. On the strength of a fracking boom, the United States has become the world’s largest producer of petroleum and natural gas and the largest total producer of energy. A 2015 study showed that the fracking boom alone created nearly one million new jobs. While this might suggest that America is free from foreign influence on its energy, there are still several troubling ways that America’s adversaries can wreak havoc on our fossil fuel industry.
Putin puts Fracking in his Crosshairs
America’s fracking boom poses a significant threat to Russia, which depends on being able to export its own natural gas to Europe. The export of American gas would help European countries stay clear of Russian influence. To combat the threat of American fracking, Russia has dedicated its vast propaganda arm, including its global television network RT to criticizing fracking and warning about its many environmental impacts. A report from two American congressmen even alleged that Russia was directly funding anti-fracking environmental groups.
Our Prices are Low, Theirs are Lower
America’s fossil fuels aren’t vulnerable to just foreign propaganda. They’re also vulnerable to foreign price cuts. Nowhere was this more visible than in March of 2020, when Russia began flooding global markets with oil (which is cheaper to produce than fracked shale gas), prompting Saudi Arabia to announce its own round of price cuts. The result was that oil prices fell so low that by April the price of oil became negative, meaning that it was more expensive to store oil than it was to buy it. The results of this foreign price war were catastrophic for America’s fossil fuels. The past few months have seen record job losses in the oil and gas industries, and just last week, Chesapeake Energy became the largest oil and gas company in the United States to file for bankruptcy. Chesapeake was an early adopter of fracking technology and the second largest gas company in the country, but that wasn’t enough to save the company from ruin.
American Oil Technology Isn’t Safe
Foreign threats to American oil don’t just come from Russia. China’s well-documented theft of intellectual property has also targeted American oil companies. In 2019, a jury convicted a Houston man named Shan Shi for trying to steal deepwater drilling technology from an energy company called Trellberg Offshore for China. In February of this year, a Chinese national admitted to stealing $1 billion worth of trade secrets while working for Phillips 66. As long as America has a technological advantage over China, China will have an incentive to steal our oil industry’s trade secrets.
A Better Way
Proponents of American fossil fuels like to say that they give America more independence in her foreign policy, but the reality is that foreign countries can just find new ways to sabotage them. True energy independence requires independence from fossil fuels and greater reliance on energy sources that are immune to foreign propaganda and price cuts.