National

The Bipartisan Budget Act passed last week directs the Department of Energy to sell 100 million barrels of oil from the Strategic Petroleum Reserve, adding to 189 million barrels already scheduled for sale by four other major laws since 2015. (The reserve held 695 million barrels at the start of 2017.)

Why it matters:  If Congress is the portfolio manager of America's public assets, lawmakers are rotating out of energy security to secure funds for drug development, infrastructure and other new priorities. The shift away from four decades of scarcity-driven energy policy is likely to reduce support for vehicle efficiency, renewable fuels mandates and alternative energy spending.

Yes, but: Selling government oil into a crowded market can dampen prices, thinning U.S. producer margins and making it harder for new technologies to compete. Meanwhile, electric cars are five to ten years away from gasoline parity and another fifteen years after that from dominating the U.S. fleet.

The bottom line: Oil prices are global and the U.S. accounts for only 10% of supply, which still leaves U.S. drivers vulnerable to disruptions half a world away.

Kevin Book is managing director at ClearView Energy Partners LLC and nonresident senior associate in the Energy and National Security Program at CSIS.

How the oil boom is changing U.S. energy policy

The end of a scarcity ethos will have far-reaching effects.

Oil tanks at the St. James Strategic Petroleum Reserve Terminal near Baton Rouge. Photo: Julie Dermansky / Corbis via Getty Images

Energy

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Expert Voices

Politics

The Bipartisan Budget Act passed last week directs the Department of Energy to sell 100 million barrels of oil from the Strategic Petroleum Reserve, adding to 189 million barrels already scheduled for sale by four other major laws since 2015. (The reserve held 695 million barrels at the start of 2017.)Why it matters: If Congress is the portfolio manager of America&#x27;s public assets, lawmakers are rotating out of energy security to secure funds for drug development, infrastructure and other new priorities. The shift away from four decades of scarcity-driven energy policy is likely to reduce support for vehicle efficiency, renewable fuels mandates and alternative energy spending.

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

The new tariffs on U.S. steel imports were already poised to raise costs for steel-intensive domestic oil and gas production. But China's proposed retaliatory tariffs on ethanol and propane pose the greatest threat yet to the U.S. energy trade.

The big picture: If tensions continue to escalate, Beijing might target U.S. oil and natural gas, too. While all businesses could face weaker margins if tariffs, quotas and other barriers slow global GDP growth, a trade war with China would prove especially damaging to U.S. energy producers, which have grown increasingly dependent on overseas markets.

Today’s fight goes back to the Great Recession, a turning point in geopolitical and economic history. When the frothy tide of debt that had buoyed global fortunes receded, it revealed the craggy and unequal landscape within and across nations. Changes in labor and capital allocation due to globalization also came into view: While the market-based OECD floundered, with a 3.5% GDP drop in 2009, China emerged ascendant, with GDP growth of 9.4% under a state-backed model of “command capitalism.”   

During the recession, G20 economies spent $2 trillion in a fiscal stimulus. But while China invested $218 billion in green energy, the U.S. invested about half that, borrowing tomorrow's money to protect yesterday's factories. Years of protecting those investments amid flagging global demand may have contributed to today’s mistrust. It also explains why solar panels and biofuels featured early in these trade conflicts.

The bottom line: The energy industry is fast becoming a battleground for the U.S.–China rivalry. China’s plans to dominate electric vehicles could set up future green energy fights.

In tariff reprisal, China puts U.S. energy in the crosshairs

China is starting to punish the U.S. attachment to old energy

Chinese workers prepare panels that will be part of a large floating solar farm project under construction

Workers prepare panels that will be part of a large floating solar farm project under construction on June 13, 2017, in Huainan, Anhui province, China. Photo: Kevin Frayer via Getty Images

Tariffs

World

The new tariffs on U.S. steel imports were already poised to raise costs for steel-intensive domestic oil and gas production. But China&#x27;s proposed <a class="gtmContentClick" data-vars-link-text="retaliatory tariffs" data-vars-click-url="https://www.axios.com/china-slaps-new-tariffs-on-128-us-imports-48d45f66-18ab-427a-a3e5-6870df8be84f.html" data-vars-content-id="ea911b29-dd47-4008-8834-7b4cfba92759" data-vars-headline="In tariff reprisal, China puts U.S. energy in the crosshairs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/china-slaps-new-tariffs-on-128-us-imports-48d45f66-18ab-427a-a3e5-6870df8be84f.html" target="_self">retaliatory tariffs</a> on ethanol and propane pose the greatest threat yet to the U.S. energy trade.The big picture: If tensions continue to escalate, Beijing might target U.S. oil and natural gas, too. While all businesses could face weaker margins if tariffs, quotas and other barriers slow global GDP growth, a trade war with China would prove especially damaging to U.S. energy producers, which have grown increasingly dependent on overseas markets.

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Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Kevin Book

Stories

In tariff reprisal, China puts U.S. energy in the crosshairs

How the oil boom is changing U.S. energy policy