Trade Isn’t a Bad Word
Dan Haley, President and CEO, Colorado Oil & Gas Association
Even though you may have heard differently during the presidential campaign, trade isn’t a bad word.
A cornerstone of our global economy, international trade was often maligned by both leading candidates during the campaign and has been put under the spotlight by unions, activists and the media.
Earlier this month, I was honored to participate in a round-table discussion on the importance of free trade with Denver Mayor Michael Hancock and others at Denver International Airport.
Trade, panelists argued, was a vital key to our economy.
Chad Vorthmann, Executive Vice President of the Colorado Farm Bureau, said trade provides economic security.
“If we’re not involved with trade, we’re not winning,” he said when asked how President-elect Trump might view trade.
That’s so true. Trade is not only important to the oil and gas industry, but to our entire economy.
Earlier this year, Congress finally gave the United States the ability to export crude oil. It’s something we had stopped doing in the early 1970s because Congress, on the heels of the Arab oil embargo, decided that what we produced here should stay here.
It may have made sense politically in the 1970s to do that, but it didn’t make sense economically – even back then — and it certainly didn’t make sense to hamstring ourselves like that today in this global economy.
As our economy grew in the 70s and 80s, we began importing oil – often from countries that were fairly hostile to the United States – to accommodate that growth. Our refineries were built to process that foreign oil so some of it could be used for gasoline.
We haven’t built a major refinery in decades in this country so when we began producing a lot of our own oil in recent years – it’s a light, sweet crude that can’t really be processed in our refineries — it was important to find ways to export some of what we’re producing.
We also need the ability to export our natural gas. We have been blessed with an abundance of cleaner burning, efficient and affordable natural gas here in Colorado. We need to be able to get it to other countries that would rather trade with us than with, say, Russia.
How important is this? The U.S. is now a net exporter of gas. For the first time in almost 60 years, the U.S. has shipped out more natural gas than it imported.
The domestic energy revolution in this country — the fact that we’re now the world’s largest producer of oil and natural gas — has changed everything. And the ability to export and the ability for trade will shape and change the dynamics of global diplomacy for years to come.
The presence of U.S. oil and natural gas in the world marketplace gives other countries more choice in how and where they import their energy.
For example, Cheniere Energy recently sent a large shipment of LNG — liquefied natural gas — to China, a country which has been trading with Russia for oil and natural gas.
We need to be forward thinking about our trade policies and consider how we want to position ourselves 5, 10, 50 years from now. Our ability to trade oil and natural gas will be a key part of how we negotiate future trade deals.
Citigroup recently estimated that by 2020 the U.S. will be the world’s third largest producer of LNG, which will be crucial to countries like Japan who are working to move away from coal as they look for cleaner burning, cost-effective ways to meet their energy demands.
We have those resources here. If we can export them, that means more good-paying jobs in Colorado. And it means a cleaner environment for the world.
With the proper diplomacy and protocol, when it comes to energy and our foreign policy, we can finally begin to move in this country from “boots on the ground” to “words on paper” when it comes to energy policy.