Obama Vows to “Step on Gas” in Response to Putin
Address to Nation
Shift in Energy Policy to Increase U.S. Exports,
Reduce European Dependence on Russia, Curb Emissions
By Keith Beidermeyer and Philip Furlinger
WASHINGTON — In a ten minute speech from the oval office, U.S. President Barack Obama outlined a plan to accelerate development of American oil and natural gas resources in a bid to reduce Russian influence in Europe. “It is time for America to step on the gas. If we move decisively, in concert with our European friends and allies,” Mr. Obama said, “we can increase U.S. exports, reduce European reliance on Russian natural gas, raise the living standards of America’s working families, and cut global emissions of greenhouse gasses that threaten our planet.” The plan has four main elements. First, immediate approval of the Keystone XL Pipeline, which will move crude oil from Canada to America’s gulf coast. Second, permitting renewed exports of crude oil from the United States, which were banned during the oil crisis of the early 1970s. Third, open up more Federal land in the United States to oil and gas production, while encouraging states to speed up drilling permits. Fourth, accelerate permits for construction of liquefied natural gas (LNG) export facilities in U.S. ports.
Financial markets reacted swiftly to the unexpected news. Asian stocks rallied strongly, as Obama’s plan was believed to cut the risk of a violent confrontation with Russia over Ukraine. In Japan, which imports most of its energy, the Nikkei index was up 2.3% at mid-day; the Shanghai Composite Index rose 1.7%. U.S. stock index futures were up 1.5%. Natural gas prices plunged on an expected increase in global supply. The price on contracts for May delivery fell 12.7% to $5.23 per million British thermal units. Brent crude oil prices declined $2.86 to $102.35 per barrel. Currency markets were also volatile. The Euro climbed 1% versus the U.S. dollar to $1.393 on the improved energy outlook in Europe and reduced tensions in the Ukraine. But the Russian ruble fell 5.2% and shares of Gazprom, the Russian energy giant, plummeted 12.8% to a ten-year low. Russian share prices were broadly lower. “The Russian economy is a one-trick pony, and that pony just broke its leg,” said Erhard Zimmerman, senior emerging market economist at Deutsche Bank in Frankfurt.
Mr. Obama’s plan is likely to be controversial with environmental activists within the Democratic Party. But administration officials pointed out that it would actually reduce greenhouse gas emissions in Europe, which has increasingly been relying on importing U.S. coal, whose price has declined as it is displaced by cheap natural gas in the U.S. electricity sector. “This is an economic, environmental, and geopolitical win for both the U.S. and Europe.” said Barton Howard Wentworth, Undersecretary of State for Economic Affairs, “U.S. exports will increase while European energy security improves. And carbon emissions will decline as Europe uses less coal.” Opposition to the Keystone Pipeline has been a major priority for environmental advocates. Mr. Wentworth noted that pipelines were safer than moving crude oil by rail cars, which have been involved in several major accidents in recent years. Cleopatra Franpoui, spokesman for the Progressive Energy Coalition, vowed to fight Obama’s plan, saying “This stop-gap measure will only increase American addiction to . . . .
Copyright Thomas Doerflinger 2014. All Rights Reserved.
