Mr. Putin’s Energy Bet

Mark Green
Posted June 9, 2021

Russian President Vladimir Putin’s negative comments last week about fracking – “truly a catastrophic type of production” – and U.S. natural gas are hardly surprising.

Putin has disparaged U.S. hydraulic fracturing before, and we get it: Few heads of state are as threatened by U.S. global energy leadership, built by the fracking/horizontal drilling revolution. Putin’s newest remarks come as Russia nears completion of a new natural gas pipeline, Nord Stream 2, to Germany that will vie with exported U.S. natural gas. It’s all in the marketing, right?

More seriously, the Russian leader’s comments are one among many reminders that energy markets are global, that there’s rigorous competition between energy-producing nations to meet global demand and that domestic natural gas and oil production and the infrastructure to transport it are critically important to our economy, security and way of life.

U.S. energy needs don’t exist in a vacuum. Decisions made today – on domestic pipelines, leasing federal onshore and offshore reserves and natural gas and oil exports – are vital to America’s near- and long-term future. Other nations, including Russia, are at work on energy, too. The energy they produce and the way it’s produced have geopolitical, environmental and climate impacts.

It’s not boasting to say that because of U.S. leadership in advanced energy technologies – including fracking – the professionalism of U.S. energy workers, industry standards and more, the environmental record of U.S. natural gas and oil production stacks up well against any other country’s record, including Russia’s.

EPA’s latest greenhouse gas emissions report shows methane emissions from natural gas systems decreased 4% since 2005 – even as marketed natural gas production over the same period increased by more than 90%. Methane emissions per unit of production from key basins fell nearly 70% between 2011 and 2019, pointing to industry’s increased efficiency in reducing those emissions, according to data from EPA and the U.S. Energy Information Administration.

Flaring from U.S. natural gas and oil production decreased 32% from 2019-2020, according to a World Bank report that cited infrastructure improvements to capture and use gas as well as lower production. Industry initiatives such as The Environmental Partnership will continue to build on that progress. The U.S. is among the world leaders in lowest flaring intensity 2016-2020:

The Environmental Partnership, whose 90 upstream and midstream companies represent 74% of new U.S. onshore natural gas and oil production, has implemented a flare management program to continue reducing flare volumes.

API’s newly launched Climate Action Framework details paths for meeting the world’s growing need for energy while also bringing about a lower-carbon future – including measures to reduce emissions from producing the energy the U.S. and the world use.

The larger energy context, the one in which Mr. Putin and others around the world have impact, is a simple question: If not U.S. energy, then whose energy?

The U.S. and the world are going to need more energy, and if the U.S. is adopting policies that restrict domestic energy production while also neglecting or opposing energy infrastructure, that demand will be supplied from somewhere else.

Ultimately, isn't that Mr. Putin's energy bet?