18 July, 2017
Trump Energy Plan Will Give US Independence From OPEC
Shortly after the nomination of Rick Perry to head the Energy Department, President Trump unveiled the America First Energy Plan on the White House’s website.
The Plan outlines the energy policy of the Trump Administration. The document affirms the commitment to "achieving energy independence from the OPEC cartel and any nations hostile to our interests."
U.S. energy independence policy started in the seventies as a result of the nationalization of oil supplies by producing countries and the formation of the OPEC cartel.
After OPEC imposed an embargo on U.S. oil in 1973, fuel prices were skyrocketing and reserves were almost depleted. In 1974 Henry Kissinger launched "Project Independence," a national energy plan to achieve energy independence. The United States relied upon foreign producers to cover its domestic demand for oil and gas and the scarcity of these commodities induced the Ford Administration to ban oil exports in 1975. Energy importers such as the United States, Israel, and European countries looked at solar and wind energy as an alternative to fossil fuels to cover their domestic demand without depending on OPEC.
Forty years later, new techniques of oil and gas extraction have released large volumes of fossil energy in the United States, transforming the U.S. from an energy importer to a net energy exporter. Today, the United States is the world’s largest producer of oil and gas.
This represented a major game changer in global energy policy. America can now compete with Russia and the Middle East in setting oil and gas prices. Currently the United States is importing just one fourth of its oil demand.
In December 2015 Congress struck a deal to lift the oil export ban in exchange for an extension of tax credits for solar energy. As an oil exporter, the United States can now play a major role in setting global oil prices, and OPEC decisions on oil production will have a lesser influence in energy markets.
Although some OPEC members are strategic partners of the United States in the Middle East, American energy corporations shall have the right to pursue their economic interests in the context of free market competition.
The America First Energy Plan clearly states that "the United States will work with our Gulf allies to develop a positive energy relationship as part of our anti-terrorism strategy." Therefore, the Trump administration reiterated the solidity of America’s strategic relation with its allies in the Middle East.
The Energy Plan promises "to boost the extraction of an estimated $50 trillion in untapped shale, oil, and natural gas reserves and use the revenues from energy production to rebuild public infrastructure." Such policy reflects the renewed role of the United States as a global oil and gas exporter. The shift to renewable energy will happen once solar and wind energy will become cost effective to replace fossil fuels as the main source of energy generation. In the meanwhile, the United States shall embrace the economic boom generated by extracting its large reserves of fossil fuels.
The America First Energy Plan would create additional jobs and revenue for the U.S. economy while pursuing American energy security by reducing U.S. dependence on foreign fossil fuels.
By implementing the new Energy Plan, the United States can emancipate itself from OPEC and achieve true energy independence.
Francesco Stipo is the President of the Houston Energy Club, a member of the National Press Club in Washington D.C., a Fellow of the World Academy of Art and Science, and recently joined the Bretton Woods Committee. Born in Italy in 1973, Dr. Stipo is a naturalized United States citizen. He holds a Ph.D. in International Law and a Master Degree in Comparative Law from the University of Miami. To read more of his reports, Click Here Now.