Offshore Nat Gas Aff
Contents
Offshore Nat Gas Aff ...................................................................................................................... 1
1AC ................................................................................................................................................. 4
Plan: 1AC ................................................................................................................................ 5
Offshore Advantage: 1AC ...................................................................................................... 6
Exports Advantage: 1AC ...................................................................................................... 18
Offshore Advantage ...................................................................................................................... 30
Economy ................................................................................................................................... 31
Econ Outweighs – Probability .............................................................................................. 32
Econ Collapse = War ............................................................................................................ 33
OCS K2 Economy................................................................................................................. 37
OCS K2 Shipbuilding ........................................................................................................... 47
Shipbuilding K2 Economy .................................................................................................... 49
A2 “US ≠ K2 Global Econ.................................................................................................... 51
A2 “Econ = Resilient” .......................................................................................................... 53
Solves Oceans: 2NC ............................................................................................................. 55
Navy .......................................................................................................................................... 56
OCS K2 Shipbuilding ........................................................................................................... 57
Shipbuilding K2 Military ...................................................................................................... 59
Impact – Navy – 2AC ........................................................................................................... 61
Impact – Navy – 2AC Deterrence ......................................................................................... 63
Exports Advantage ........................................................................................................................ 64
Uniqueness ................................................................................................................................ 65
Exports Down Now............................................................................................................... 66
China ......................................................................................................................................... 67
China– 1AC .......................................................................................................................... 68
A2 China Won’t Purchase LNG ........................................................................................... 75
China Relations – A2: Resiliency/Energy Not Key .............................................................. 79
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China Relations – A2: No Nuclear War ............................................................................... 82
China Relations – A2: China Threat Con ............................................................................. 85
China K2 Solve Warming ..................................................................................................... 88
Japan ......................................................................................................................................... 90
Japan – 1AC .......................................................................................................................... 91
Relations – Link – Exports Solve ......................................................................................... 96
Relations – Japan Needs US LNG ........................................................................................ 99
Relations – Impact – Global Nuclear War .......................................................................... 101
Add-Ons .................................................................................................................................. 102
Economy: 2AC.................................................................................................................... 103
Price Volatility: 2AC .......................................................................................................... 105
LNG K2 Econ: Ext.............................................................................................................. 107
LNG K2 Manufacturing ...................................................................................................... 112
LNG K2 Free Trade ............................................................................................................ 113
LNG K2 Asian Economy .................................................................................................... 114
LNG K2 Europe Economy.................................................................................................. 115
Solvency.................................................................................................................................. 116
OCS K2 Exports ................................................................................................................. 117
Industry Ready .................................................................................................................... 119
LNG Safe ............................................................................................................................ 122
LNG Key............................................................................................................................. 124
2AC A2 Insuff. Infrastructure ............................................................................................. 126
2AC Ext. Plan Solves.......................................................................................................... 127
Solvency...................................................................................................................................... 128
Shale........................................................................................................................................ 129
Shale Unsustainable: 2AC .................................................................................................. 130
Feasibility................................................................................................................................ 133
A2 Safety Issues .................................................................................................................. 134
Disad Answers ............................................................................................................................ 136
Environment DA ..................................................................................................................... 137
No Link ............................................................................................................................... 138
Environment Resilient ........................................................................................................ 145
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Artificial Reefs Solve Impact.............................................................................................. 146
No Impact - Methane .......................................................................................................... 147
LNG Turns Environment .................................................................................................... 148
A2 Russia Gas DA .................................................................................................................. 150
No Tradeoff ......................................................................................................................... 151
Politics..................................................................................................................................... 157
2AC No Link....................................................................................................................... 158
2AC No Link - Jobs ............................................................................................................ 159
Plan Popular ........................................................................................................................ 160
1AR – Bipartisan Link Turn ............................................................................................... 163
1AR – Boehner Link Turn .................................................................................................. 165
3
1AC
4
Plan: 1AC
The United States federal government should substantially increase access to
its outer continental shelf for natural gas exploration and development.
5
Offshore Advantage: 1AC
Contention __: Offshore Development
US Economic recovery has stalled – permanent recession and collapse are
coming now – revival is possible through significant business and public
investments
Appelbaum 14 (Binyamin Appelbaum, “U.S. Economic Recovery Looks Distant as Growth
Stalls,” 7-11-14, http://www.nytimes.com/2014/06/12/business/economy/us-economic-recoverylooks-distant-as-growth-lingers.html)
WASHINGTON — Recessions
are always painful, but the Great Recession that ran from late 2007
to the middle of 2009 may have inflicted a new kind of pain: an era of slower growth. It has
been five years since the official end of that severe economic downturn. The nation’s total annual output has moved
substantially above the prerecession peak, but economic growth has averaged only about 2
percent a year, well below its historical average. Household incomes continue to stagnate, and millions of Americans still can’t find jobs.
And a growing number of experts see evidence that the economy will never rebound
completely. For more than a century, the pace of growth was reliably resilient , bouncing
back after recessions like a car returning to its cruising speed after a roadblock. Even after the
prolonged Great Depression of the 1930s, growth eventually returned to an average pace of more than 3 percent a year. But Treasury Secretary
Jacob J. Lew, citing the Congressional Budget Office, said on Wednesday that the
government now expected annual
growth to average just 2.1 percent, about two-thirds of the previous pace. “Many today wonder
whether something that has always been true in our past will be true in our future,” Mr. Lew told members of the Economic Club of New York.
“There
are questions about whether America can maintain strong rates of growth and
doubts about whether the benefits of technology, innovation and prosperity will be shared
broadly.” The most recent recession and the slow recovery have “left lasting scars on the economy,” the Labor Department concluded late
last year in a report that declared slower growth “the new normal” for the American economy. The Federal Reserve,
persistently optimistic in its previous forecasts, said in March that it no longer expected a
full recovery in the foreseeable future. Lawrence H. Summers, formerly President Obama’s chief economic adviser
and now a leading member of this Cassandra chorus, has warned that growth may fall short of expectations
unless the federal government increases its spending on things like upgrading deteriorating
roads and bridges and the development of new technologies. “A soft economy casts a substantial shadow
forward onto the economy’s future output and potential,” he said in a speech in April. The pessimism is a striking departure from economic
orthodoxy. Recessions cause considerable suffering, including permanent disruptions to individual lives, but most economists have long asserted
that recessions do not reduce the economy’s capacity to supply goods and services. Some economists still expect a complete recovery. They say it
takes a long time to recover from financial crises, and that the healing process has been set back unexpectedly by cuts in government spending, by
Europe’s woes and, most recently, by a hard winter. Other economists, also committed to the orthodox view of recessions, argue that the slower
growth is here to stay, but say that it is the result of longer-term trends that predate the recession, like fewer Americans entering the work force
and less innovation. “We have recovered” from the recession, said Tyler Cowen, a professor of economics at George Mason University. “We just
don’t like what that looks like.” The emerging view espoused by an eclectic range of economists — including Mr. Summers; Paul Krugman of
Princeton and an Op-Ed page columnist for The New York Times; and Robert E. Hall of Stanford University’s conservative Hoover Institution
— accepts that slower growth is partly the result of long-term trends. It
is an unfortunate coincidence, in effect, that
just as the floor was giving way, the ceiling was falling, too. But these analysts also see mounting evidence that
recessions, and slow recoveries, can have enduring consequences. Since 2007, the Congressional Budget Office has
cut its estimate of potential economic output in 2017 by a total of about 7 percent, or $2,500
per American. The budget office says the recession is responsible for a quarter of the cuts. It attributes the rest to long-term trends. An
6
analysis published last month by Mr. Hall argued that the recession played an even larger role. Much
of the scrutiny has
focused on the labor market . The share of adults with jobs fell sharply during the
recession and has rebounded only slightly because many people have simply stopped
looking for work. The situation is likely to improve somewhat as the economy gains strength, but part of the decline is tied to factors
that are more permanent. They include the share of Americans claiming federal disability benefits, which rose sharply in recent years. Few of
those people will ever return to the work force after receiving benefits. At the same time, fewer immigrants have been arriving. There
are
almost two million fewer people over the age of 16 than the federal government had
projected back in 2007. The recession also reduced the number of future workers. The birthrate has declined each year from 2007 to
2012, the most recent for which data is available. Economic prosperity is determined not just by the number
of workers but, even more important, by their output per hour of work. There is growing speculation
that decisions made in the wake of the recession have weakened that output, too. Government spending and public
investment has fallen by almost 8 percent, the largest decline in more than half a century.
Corporate investment has also been lackluster. As with the labor market, there is a clear short-term problem and also
a long-term trend. John G. Fernald, an economist at the Federal Reserve Bank of San Francisco and a leading expert on productivity, argued in a
2012 paper that the
growth of productivity had slowed as companies completed a cycle of
technological investment. But in a much-discussed paper last year, three senior Fed economists argued that productivity growth
could take a long-term hit because fewer businesses were being created and existing ones were spending
less on research and development. This view remains controversial. “Productivity forecasts have had no success historically,”
Mr. Hall wrote in his recent analysis. “Whether the return to a normal economy will result in a catch-up in productivity growth in the longer term
is an unsettled question.” Another unsettled question is whether the federal government can help. Gauti Eggertsson and Neil Mehrotra, economics
professors at Brown University, argued in a recent paper that the
combination of the financial crisis, fewer
workers and rising income inequality could leave the economy in a state of “permanent
recession.”
The paper, which sought to formalize recent conceptualizing about so-called secular stagnation, argued that in a normal cycle,
falling interest rates would eventually generate sufficient demand to restore the economy to its historical growth rate. But the Fed has held
interest rates near zero since late 2008 and there has been no such rebound. The
researchers concluded that the
economy might experience “a permanent slump in output” without bold new measures to
spur investment, like a large increase in government spending or higher inflation. Mr. Lew, the Treasury secretary, argued on
Wednesday that smaller steps, like increased immigration and improved education, could help too. “The choices we make over
the years to come can alter this projection” of slower growth, he said.
Removing OCS natural gas restrictions provides a long term economic
stimulus and makes the shipbuilding industry sustainable
Mason 11 (Joseph – Senior Fellow, The Wharton School, Louisiana State University
Endowed Chair of Banking and nationally-renowned economist, “House Natural
Resources Subcommittee on Energy and Mineral Resources Hearing; Fisheries, Wildlife,
Oceans and Insular Affairs Legislative Hearing on H.R. 306, H.R. 588, S. 266 and H.R.
285”, 4/6, lexis)
Apart from national energy concerns, however, economic considerations also favor increased
development of OCS energy resources. Specifically, the boost provided to local onshore economies
by offshore production would be particularly welcome in the present economic climate. Similar to fiscal
alternatives presently under consideration, OCS development would provide a long-run economic stimulus
to the U.S. economy because the incremental output, employment, and wages provided by
7
OCS development would be spread over many years. Unlike those policies, however, this stimulus would not
require government expenditures to support that long-term growth. A. The Present State of Offshore U.S. Oil and Gas Production Despite its
importance, U.S. oil and natural
gas production in offshore areas is currently limited
to only a few
regions. At the present time, oil and gas is only actively produced off the coast of six U.S. states: Alabama, Louisiana, Mississippi, Texas,
California, and Alaska. The Energy Information Administration (EIA) reports that Alabama, Louisiana, Mississippi, and Texas are the only
coastal states that provide access to all or almost all of their offshore energy resources. Only two additional states--Alaska and California--are
producing any offshore energy supplies. All California OCS Planning Areas and most Alaska OCS Planning Areas, however, were not open to
any new facilities until the recent end of the Congressional and Presidential moratoria. The remaining 16 coastal states are not open to new
production and are not presently extracting any offshore energy resources. Even without those remaining sixteen states, plus California and
Alaska, the
OCS is already the most important source of U.S. energy supplies. According to the MMS,
"the Federal OCS is a major supplier of oil and natural gas for the domestic market, contributing more energy (oil
and natural gas) for U.S. consumption than any single U.S. state or country in the world." That is, OCS production presently meets more U.S.
energy demand than any other single source, including Saudi Arabia. B. Offshore Oil Production Stimulates Onshore Economies
Offshore
gas production has a significant effect on local onshore economies as well as the
national economy. There are broadly three "phases" of development that contribute to state economic growth: (1)
the initial exploration and development of offshore facilities; (2) the extraction of oil and gas
reserves; and (3) refining crude oil into finished petroleum products. Industries supporting those phases are most evident in the sections of
the Gulf of Mexico that are currently open to offshore drilling. For example, the U.S. shipbuilding industry - based largely in
the Gulf region - benefits significantly from initial offshore oil exploration efforts. Exploration and
development also requires specialized exploration and drilling vessels, floating drilling rigs,
oil and
and miles and miles of steel pipe, as well as highly educated and specialized labor to staff
the efforts. The onshore support does not end with production . A recent report prepared for the U.S.
Department of Energy indicates that the Louisiana economy is "highly dependent on a wide variety of industries that depend on offshore oil and
gas production" and that offshore
production supports onshore production in the chemicals, platform
fabrication, drilling services, transportation, and gas processing. Fleets of helicopters and U.S.built vessels also supply offshore facilities with a wide range of industrial and consumer
goods, from industrial spare parts to groceries. As explained in Section IV.G, however, the distance between offshore
facilities and onshore communities can affect the relative intensity of the local economic effects. The economic effects in the refining phase are
even more diffuse than the effects for the two preceding phases. Although significant capacity is located in California, Illinois, New Jersey,
Louisiana, Pennsylvania, Texas, and Washington, additional U.S. refining capacity is spread widely around the country. As a result, refinery jobs,
wages, and tax revenues are even more likely to "spill over" into other areas of the country, including non-coastal states like Illinois, as those are
home to many refining and chemical industries that ride the economic coattails of oil exploration and extraction. II. OFFSHORE OIL AND GAS
RESERVE ESTIMATES AND THE SOURCES OF THEIR ECONOMIC BENEFITS As described in my 2009 white paper, "The Economic
Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies," available at
www.americanenergyalliance.org/images/aea_offshore_updated_final.pdf, significant oil and gas
reserves lie under the
U.S. Outer Continental Shelf (OCS). According to the Energy Information Administration (EIA), the OCS (including
Alaskan OCS Planning Areas) contains approximately 86 billion barrels of recoverable oil and approximately 420 trillion
cubic feet of recoverable natural gas. As noted by the White House, however, the OCS estimates are
conservative . Of the total OCS reserves, a significant portion was unavailable to exploration until recently. Specifically, Presidential and
Congressional mandates banned production from OCS Planning Areas covering approximately 18 billion barrels of recoverable oil and 77.61
trillion cubic feet of recoverable natural gas. These bans covered approximately 31 percent of the total recoverable OCS oil reserves and 25
percent of the total recoverable OCS natural gas reserves. Economic
benefits of utilizing OCS reserves accrue
from three primary sources: (1) exploration/platform investments; (2) production; and (3) refining. Sources (1) and
(3) produce initial effects--that is, new industry expenditures--today; in contrast, source (2) produce economic
8
effects
only once production begins. The analysis therefore considers "initial" economic effects as those that flow from exploration or
investments in new refining capacity and long-term economic effects as those that flow from production and ongoing refining. A. Exploration and
Offshore Facility Development In contrast to other industries, the
high fixed investment costs associated with
offshore oil and gas production produce large initial investments that reverberate throughout
the economy. Once oil or gas reserves are located, billions of additional dollars must be spent
before the well produces even $1 of revenue. For example, oil exploration costs can amount to between $200,000 and $759,000 per day per site.
Additional production in the U.S. will also require a costly expansion refining capacity as well. Taken together, the
fixed
expenditures that precede actual offshore oil and gas production can amount to billions of dollars. For example,
Chevron's "Tahiti" project in the Gulf of Mexico is representative of the large investments that firms must make before production is achieved. In
2002, Chevron explored the Tahiti lease--which lies 100 miles off the U.S. coast at a depth of 4,000 feet--and found "an estimated 400 million to
500 million barrels of recoverable resources." Chevron estimates that it will take seven years to build the necessary infrastructure required to
begin production at Tahiti. The firm estimates that its total development costs will amount to "$4.7 billion--before realizing $1 of return on our
investment." As a typical U.S. offshore project, the Tahiti project provides a wealth of information regarding the up-front investment costs, length
of investment, and lifespan of future OCS fields. As noted above, the Tahiti field is estimated to hold between 400 million and 500 million barrels
of oil and oil equivalents (primarily natural gas) and is expected to require an initial fixed investment of $4.7 billion. Using the mid-point reserve
estimate of 450 million barrels of oil equivalent, up-front development costs amount to approximately $10.44 per barrel of oil reserves or $1.86
per 1,000 cubic feet of natural gas reserves. These costs will be spread over 7 years, resulting in average up-front development expenditures equal
to $1.49 per barrel of oil and $0.27 per 1,000 cubic feet of natural gas. Chevron also estimates that the Tahiti project will produce for "up to 30
years". Although investment and production times vary widely, the analysis that follows uses the Tahiti project numbers - an average initial
investment period of seven years followed by an average production period of 30 years - as indicative of the "typical" offshore project. I will thus
assume an average initial investment period of seven years followed by an average production period of 30 years. The speed of OCS development
also factors into the analysis. Because
most areas of the U.S. OCS have been closed to new exploration
and production for almost forty years, it is unclear how quickly firms would move to develop new
offshore fields. Given its large potential reserves, however , the OCS is sure to attract significant
investment. Without the benefit of government data, a rough estimate suggests that annual total
investment in OCS fields would be $9.09 billion per year. Those annual expenditures are expected to last, on
average, the full seven years of the development phase. Additional investment in states that already support significant production - Alabama,
Louisiana, Mississippi, and Texas - are limited. Some of the greatest benefits accrue to areas that are home to enormous - but unavailable - total
reserves: California and Florida. B. Production The
likely value of state recoverable oil and gas reserves are estimated
using the likely lifetime revenue that could be generated by the project. In that case, average wholesale
energy prices provide the information necessary to translate reserves into revenues. Taking the simple average of the EIA's latest inflationadjusted energy price forecasts through 2030 as provided by its Annual Energy Outlook 2009, the average inflation-adjusted price of oil will be
$110.64 per barrel and the average inflation-adjusted price of natural gas will be $6.83 per thousand cubic feet. At these prices,
the
estimated OCS reserves are worth about $13 trillion . The value of each state's available reserves are calculated as
the sum of (1) its share of available OCS Planning Area oil reserves times $110.64 per barrel and (2) its share of available OCS Planning Area
natural gas reserves times $6.83 per thousand cubic feet. The same method applies to the valuation of total state OCS reserves. By those
estimation methods, states such as California, facing a budget crisis in the current recession, have an estimated $1.65 trillion in resources
available in nearby OCS planning areas. Florida, while not facing as dire a fiscal crisis, has about $0.55 trillion in resources available in nearby
OCS planning areas. Hence, a
permanent relaxation of all federal OCS production moratoria would
unlock more than $3.4 trillion in new production among all the coastal states. C. Investments in Incremental
Refining Capacity Since U.S. refineries are presently operating near maximum capacity increased offshore oil and gas
production would also spur investment in new refineries . The U.S. refining industry is presently operating at 97.9
percent of capacity and can no longer depend on excess foreign refining to meet production shortfalls arising from seasonality or repairs. In
response, many large refiners are already considering refinery expansions: ConocoPhillips announced that it planned to spend $6.5 billion to $7
billion on capacity expansion at its U.S. facilities; Chevron has also considered a major refinery expansion; and while Shell is completing a $7
billion expansion and its Port Arthur, Texas refinery they are considering further expansion elsewhere. Additional refinery investments are likely
to occur in the few U.S. states that already host significant U.S. refineries. This result is largely due to environmental restrictions that severely
limit the placement of new refining capacity. Current capacity is primarily concentrated in California, Louisiana, and Texas. The U.S. presently
has an operating refining capacity of approximately 6.287 billion barrels of crude oil per year. Conservative estimates of OCS production would
add approximately 3.773 billion barrels per year, or about sixty percent of current U.S. operating refinery capacity. Because some OCS refining
production would most likely substitute for foreign production, however, the analysis conservatively assumes that only one-quarter of this new
OCS production necessitates additional U.S. refinery capacity. That is, I estimate that U.S. refinery demand would increase by 943.25 million
9
barrels per year, or 15 percent of current installed capacity. Even this modest capacity increase would require substantial new investments. In
response to existing capacity constraints, Shell is already increasing the capacity of its Port Arthur, Texas refinery. This expansion will take
approximately two and one-half years to complete and cost $7 billion. The facility will add 325,000 barrels per day (or 118.6 million barrels per
year) in new capacity, at a cost of approximately $59.02 per barrel of new annual capacity. As noted above, since tough environmental
regulations effectively limit new refinery capacity to a few states, refinery investments are likely to be limited to only a few states with large
existing capacity. These states can be reasonably assumed to be the same states the already have large installed refinery capacity. Hence,
incremental refinery capacity will be added predominantly in states already home to large refining capacity--those with a present capacity of more
than 200 million barrels per year. There are seven such states: California, Illinois, Louisiana, New Jersey, Pennsylvania, Texas, and Washington.
Expected increases in offshore oil production will induce approximately $22 billion in refining capacity investments each year for two and one
half years. California, Texas, and Louisiana will receive the bulk of this investment, but investments of more than $1 billion annually can be
expected in Illinois, New Jersey, Pennsylvania, and Washington. III. INCREASED INVESTMENTS IN OFFSHORE OIL AND GAS
PRODUCTION WILL CAUSE SUBSTANTIAL INCREASES IN WAGES, EMPLOYMENT, AND TAXES, AND PROFOUND EFFECTS
ON COMMUNITIES THROUGHOUT THE NATION Onshore state and local economies
benefit from the
development of OCS reserves by providing goods and services to offshore oil and gas
extraction sites. Onshore communities provide all manner of goods and services required by offshore oil and gas extraction. A
variety of industries are involved in this effort : shipbuilders provide exploration vessels,
permanent and movable platforms, and resupply vessels; steelworkers fashion the drilling machinery and
specialized pipes required for offshore resource extraction; accountants and bankers provide financial services; and other onshore employees
provide groceries, transportation, refining, and other duties. These onshore jobs, in turn, support other jobs and other industries (such as retail and
hospitality establishments). The statistical approach known as an "input-output" analysis measures the economic effects associated with a
particular project or economic development plan. This approach, which was pioneered by Nobel Prize winner Wassily Leontif, has been refined
by the U.S. Department of Commerce. The most recent version of the Commerce Department's analysis is known as the Regional Input-Output
Modelling System, or "RIMS II." The RIMS II model provides a variety of multipliers that measure how an economic development project--such
as offshore drilling--would "trickle down" through the economy providing new jobs, wages, and government revenues. This analysis can be
broken down into two parts: (1) a "direct" analysis measuring the benefits that arise from industries that directly supply offshore oil and gas
exploration and (2) the "final" analysis that measures the direct and indirect benefits associated with offshore exploration. The RIMS II model is
the standard method governmental authorities use to evaluate the benefits associated with an economic development project. According to the
Commerce Department, the RIMS II model has been used to evaluate the economic effects of many projects, including: opening or closing
military bases, tourist expenditures, new energy facilities, opening or closing manufacturing plants, shopping malls, sports stadiums, and new
airport or port facilities. A. Opening OCS Planning Areas would Unleash More than $11 trillion in Economic Activity The
broadest
measure of the incremental effect of increased OCS oil and natural gas extraction is the effect
on total economic output. Until OCS production begins, onshore communities will realize
only the benefits associated with offshore investment. These benefits take two forms: (1) the
development of the offshore facilities
themselves and (2) the expansion of onshore refining capacity. These two effects,
taken together, provide a rough approximation of the additional output that would be created by allowing greater access to offshore reserves. Of
course, the investment expenditures and resulting output estimated above is only made to facilitate oil and gas extraction. Once extraction begins,
additional economic activity continues for the lifetime of the oil and natural gas reserves. Using the total U.S. multipliers (2.2860 for refining and
2.3938 for extraction), the total increase in U.S. output from initial investment is estimated to be a total of about $0.5 trillion, or approximately
$73 billion per year for the first seven years the OCS is open. For comparative purposes, a $73 billion stimulus amounts to approximately 0.5
percent of total U.S. output (GDP) per year. Increased OCS oil and gas extraction would yield approximately $5.75 trillion in new coastal state
output over the lifetime of the fields. Approximating the total increase in output associated with increasing offshore resource production
throughout the U.S. (including states in the interior), yields approximately $2.45 trillion in additional output. The total increase in output in the
United States is estimated to total approximately $8.2 trillion or about $273 billion per year, which amounts to just over two percent of GDP.
Because the OCS areas are currently unavailable, the entire amount--$8.2 trillion--is completely new output created by a simple change in policy
allowing resource extraction in additional OCS Planning Areas. B. Opening OCS Planning Areas could Create Millions of New Jobs An
economic expansion tied to increased OCS resource production would also create millions of
new jobs both in the extraction industry and in other sectors that serve as suppliers or their
employees. The annual increase in coastal state employment from initial investments in previously unavailable OCS planning areas and
additional refining capacity is estimated to be 185,320 full-time jobs per year. Again, this number does not consider the spill-over effects of
investment in productive capacity and refining to other U.S. states. The total increase in U.S. employment from the investment phase is
approximately 271,570 full-time jobs per year. Applying the BEA multipliers to the estimated production value results in approximately 870,000
coastal state jobs in addition to the jobs created during the initial investment phase. Again, the total increase in U.S. employment in all states
(including those in the interior) resulting from increased OCS production is 340,000 greater, for a total of approximately 1,190,000 jobs be
sustained for the entire OCS production period. Increased
investment and production in previously
unavailable OCS oil and gas extraction and the ancillary industries that support the offshore industry would produce
10
thousands of new jobs in stable and valuable industries . Among the 271,572 jobs created in the investment
phase and sustained during the first seven years of the investment cycle. The majority of new positions (162,541 jobs, or 60 percent) would be
created in high-skills fields, such as health care, real estate, professional services, manufacturing, administration, finance, education, the arts,
information, and management. Although the largest total increase in employment in the production phase would occur (quite naturally) in the
mining industry, significant numbers of jobs would be created in other industries. Again, many
of these new jobs would be
created in high-skills fields, representing approximately 49 percent of all new jobs and approximately 61 percent of all new nonmining jobs. C. Opening OCS Planning Areas can Release Trillions of Dollars of Wages to Workers Hit by Recession Those jobs pay
wages. OCS development is estimated to yield approximately $10.7 billion in new wages in
coastal states each year. OCS production would yield approximately $1.406 trillion in additional wage income to workers in coastal states over
the lifetime of the fields (or $46 billion per year over 30 years). Across the U.S., the
investment phase would generate
approximately $15.7 billion in additional annual wages per year for the first seven years and $70 billion
per year for the next thirty years, or approximately $2.1 trillion in additional wage income. BLS data suggest that all four
broad industry classifications related to oil and gas extraction pay higher wages and similar jobs in other industries. Jobs in: (1) Oil and Gas
Extraction, (2) Pipeline Transportation of Crude Oil, (3) Petroleum and Coal Products Manufacturing, and (4) Support Activities for Mining,
typically pay higher wages than the average American job. Taking this broader measure, the average job created by increased offshore oil and gas
production pays approximately 28 percent more than the average U.S. job. D. Opening OCS Planning Areas can Contribute Trillions of Dollars in
Taxes and other Public Revenues to Local, State, and Federal Governments Greater
output, more jobs, and higher
wages translate into higher tax collections and increases in other sources of public
revenues . The MMS Report to Congress suggests that public revenues derived from OCS extraction are
significant--the U.S. federal government has collected more than $156 billion in lease and levy payments for OCS oil and natural gas
production. Note that this amount counts only lease and royalty payments and thus does not include any sales and income taxes paid by firms or
workers supported by OCS production. Conservative estimates suggest that seven years
of initial annual exploration and
refining investments would produce approximately $4.8 billion annually in coastal state and local tax revenue and $11.1
billion in U.S. federal tax income. Over thirty years of production, I estimate that the extraction phase of OCS
development would yield approximately $561 billion ($18.7 billion per year) in coastal state and local tax revenue and
approximately $1.64 trillion ($54.7 billion per year) in new U.S. federal tax income.
Specifically, expanded OCS drilling boosts coastal economies
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
Figure 1 illustrates the percent of mortgages ninety or more days delinquent by county in the third quarter 2008. It is easy to see
that most of the hard-hit regions are in the coastal states, including especially those close to
restricted OCS resources. States like California and Florida , especially hard hit with mortgage
foreclosures and facing fiscal crises resulting from decreased property, sales, and income
taxes, could benefit dramatically from OCS development. Even interior states like Illinois,
Pennsylvania, and Indiana stand to benefit, however, as those are home to many refining
and chemical industries that ride the economic coattails of oil exploration and extraction. In
summary, the benefits of OCS development, while particularly focused on coastal states, are to be found nationwide.
The rest of this paper is devoted to estimating the magnitude of those benefits to provide valuable economic estimates to be used in rational
decision making on the costs and benefits of OCS development.
11
And, coastal economies are crucial to overall US economic health – preRecession data proves
Colgan 4 [Charles S. Colgan, Professor of Public Policy and Management Edmund S. Muskie School of Public Service University of
Southern Maine, Ph.D. Associate Director, MCBER EDA University Center, Chair, CPD Program and Professor of Public Policy &
Management, Muskie School of Public Service Chief Economist National Ocean Economics Project He is chair of the Community Planning and
Development Program and Associate Director of the U.S.M. Center for Business and Economic Research and the University of Maine System
Center for Tourism Research and Outreach. He also currently holds positions as a Research Fellow at the United States Bureau of Labor Statistics
and Chief Economist for the National Ocean Economics Program. Dr. Colgan is also Chair of the State of Maine Consensus Economic
Forecasting Commission. Prior to coming to USM, he served 12 years in the Maine State Planning Office, including positions as Maine State
Economist and Special Assistant to the Governor for International Trade; “The Changing Ocean and Coastal Economy of the United States: A
Briefing Paper for Governors” March 25, 2004 http://www.seagrant.umaine.edu/files/pdf-global/06MWRcd/06MWR08.pdf\\ML]
activity in coastal regions is very large. Seventy-five percent of the nation’s
Gross State Product came from the coastal states in 2000. Almost half of the economy came from the
coastal watershed counties, and more than one-third came from those counties in which states
operate their Coastal Zone Management programs. The near shore area, which is 4% of the nation’s land,
produces more than 11% of the nation’s economic output. 6. The ocean economy is also
large, with 2.3 million people employed and $117 billion in output (gross state product) in 2000. The
ocean economy comprised 1.6% of the nation’s employment - ranging from 17.7 % of Hawaii’s employment
5. Economic
to 0.6% of Ohio and Indiana’s employment.
US is key to the global economy – trade, banking and currency reserves
Lagarde 13 (Christine Lagarde, Managing Director, International Monetary Fund, “The
Interconnected Global Economy: Challenges and Opportunities for the United States—and the
World,” U.S. Chamber of Commerce, 9-19-13,
https://www.imf.org/external/np/speeches/2013/091913.htm)
The United States plays a unique role in the global economy . I am thinking, for instance, of global
trade—of which the U.S. accounts for 11 percent. The U.S. also represents 20 percent of global
manufacturing value-added. I know that you recognize the potential of an even bigger market. Tom and others at the Chamber
have often referred to 95 percent of your potential customers living “outside the U.S.” America’s global financial ties are
even deeper. Foreign banks hold about $5½ trillion of U.S. assets, while American banks hold
about $3 trillion of foreign claims. Meanwhile, close to half of the S&P500’s sales originate from
foreign operations. These interconnections have great benefits for the United States. But they
are not without risks— two-way risks —and we saw some of these play out during this
crisis. We all remember, five years ago, how the collapse of one U.S. bank ushered in a harsh new reality
across sectors, across countries, and across the world. As those tensions traveled across the Atlantic, for example,
they exposed tensions in Europe. Considering that 20 percent of U.S. exports are destined for Europe,
and that more than half of U.S. overseas assets are held in Europe, you clearly have a large
stake in the recovery there. And yet, despite the risks, I know that you are also deeply aware of how much can be gained from
engaging with the rest of the world. President Taft, who helped establish the Chamber, captured this when he said: “I am in favor of helping the
prosperity of all countries because, when
we are all prosperous, the trade with each becomes more
valuable to the other.” What was true in President Taft’s day is even more true in today’s
interconnected world : a strong U.S. economy and a strong global economy are two sides
of the same coin .
12
No Resilience – mitigation measures are already in place – interest rate
reductions and government spending cannot be extended – hard landing
coming absent real growth
Dendrinou 14 (Viktoria Dendrinou, “Global Markets' Strength Doesn't Reflect Economic
Outlook, Central Banks Say,” 6-29-14, Wall Street Journal, http://online.wsj.com/articles/globalmarkets-strength-doesnt-reflect-economic-outlook-central-banks-say-1404037802)
BRUSSELS—Buoyant
financial markets are out of sync with the shaky global economic and
geopolitical outlook , the Bank for International Settlements said in its annual report published Sunday. The warning from
the BIS, a consortium of the world's top central banks, comes as financial markets from
stocks to bonds to commodities have been enjoying a broad-based rally in the first half of
2014, reflecting investor optimism over expansionary central-bank monetary policies.
"Overall, it is hard to avoid the sense of a puzzling disconnect between the markets' buoyancy
and underlying economic developments globally," the report read. Investor optimism stems
partly from the commitment by the world's largest central banks, such as the U.S. Federal
Reserve and European Central Bank, to keep interest rates low while economies continue
to recover from recession. Markets have been resilient in the face of uneven economic growth in the U.S. and Europe, as well as
political and economic unrest in Ukraine, the Middle East and elsewhere. "Financial markets are euphoric, in the grip
of an aggressive search for yield…and yet investment in the real economy remains weak
while the macroeconomic and geopolitical outlook is still highly uncertain," said Claudio Borio, the
head of the BIS's monetary and economic department. Central bankers meet about every two months at the BIS's headquarters in Basel,
Switzerland. The
group doesn't set policy but rather serves as a forum for central bankers to
exchange views about financial markets and the global economy. While global growth has
firmed, the BIS said, it is still below its precrisis levels. The world economy expanded 3% in the first quarter of
2014 compared with a year earlier—weaker than the 3.9% average growth rate between 1996 and 2006. In some advanced
economies, output, productivity and employment remain below their precrisis peaks. But Mr.
Borio said the effectiveness of policies aiming to boost domestic demand—and therefore
growth—has been stunted by large overhangs of debt. Governments in advanced
economies have made progress in reducing their fiscal deficits since the crisis, but debt
levels are higher than ever and still rising . The BIS report cited data that showed 2014 debt exceeding 100% of gross
domestic product in most major economies, including Italy, Spain, France, the U.S. and the U.K. In a speech on Sunday, BIS General Manager
Jaime Caruana warned
that increased debt levels make borrowers' ability to repay more sensitive
to a fall in income and increases in interest rates. "Thus, higher debt translates into greater
financial fragility and financial cycles that may become increasingly disruptive," he said. The
organization cautioned that while low interest rates may keep service costs low for some time, they don't
solve the problem of high debt levels because "by encouraging rather than discouraging the
accumulation of debt they amplify the effect of the eventual normalization" of interest
rates. The BIS voiced concerns that although central banks have signaled they will
normalize monetary policy—after six years of low rates—investors may still be unprepared
for the consequences. But the risk of central banks normalizing too late and too gradually shouldn't be underestimated, the BIS said,
mainly because of the extremely accommodative monetary policy's diminished effectiveness over time. This is partly because
13
nominal interest rates are near zero, the report said, meaning central banks can't reduce
them further to boost economic growth. Because businesses and individuals have been
trying to reduce debts—a so-called balance-sheet recession—the financial sector hasn't been boosting its
lending to the real economy despite successive interest-rate cuts. Furthermore, keeping up ultraaccommodative monetary policy can be a source of turmoil for other economies. Some emergingmarket economies and small, open advanced economies have gone through bouts of market turbulence because of loose monetary policy in major
advanced countries. Some of the money these policies have pumped into markets has found its way to emerging economies as investors sought
higher-yielding assets, strengthening those country's currencies and weakening exports. But
when in May last year the Fed
hinted at reducing its stimulative bond-purchase program , exchange rates and asset
prices in emerging markets stumbled . Returning to normal monetary policy too slowly
could also be dangerous for government finances, the BIS warned. "Keeping interest rates
unusually low for an unusually long period can lull governments into a false sense of
security that delays the needed consolidation," it said, as the glut of cash encourages cheap government borrowing.
Economic decline causes global war
Royal 10 (Jedediah, Director of Cooperative Threat Reduction – U.S. Department of Defense,
“Economic Integration, Economic Signaling and the Problem of Economic Crises”, Economics
of War and Peace: Economic, Legal and Political Perspectives, Ed. Goldsmith and Brauer, p.
213-215)
Less intuitive is how periods of economic
decline may increase the likelihood of external conflict . Political
science literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of
interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow.
First, on the systemic level, Pollins (2008) advances Modelski and Thompson's (1996) work on leadership cycle theory, finding that rhythms
in the global economy are associated with the rise and fall of a pre-eminent power and the
bloody transition from one pre-eminent leader to the next. As such, exogenous shocks such as
economic crises could usher in a redistribution of relative power (see also Gilpin. 1981) that leads to
uncertainty about power balances, increasing the risk of miscalculation (Feaver, 1995). Alternatively,
even a relatively certain redistribution of power could lead to a permissive environment for
conflict as a rising power may seek to challenge a declining power (Werner. 1999). Separately, Pollins (1996) also shows that global
often
economic cycles combined with parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he
suggests that the causes and connections between global economic conditions and security conditions remain unknown. Second, on a dyadic
level, Copeland's (1996, 2000) theory of trade expectations suggests that 'future
expectation of trade' is a significant
variable in understanding economic conditions and security behaviour of states. He argues that
interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic view of future trade relations. However, if
the expectations of future trade decline, particularly for difficult to replace items such as energy resources, the
likelihood for conflict increases, as states will be inclined to use force to gain access to those
resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it
triggers protectionist moves by interdependent states.4 Third, others have considered the link between economic
decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong
correlation between internal conflict and external conflict, particularly during periods of economic
downturn. They write: The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic
conflict tends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to
14
amplify the extent to which international and external conflicts self-reinforce each other. (Blomberg
& Hess, 2002. p. 89) Economic decline has also been linked with an increase in the likelihood of
terrorism
(Blomberg, Hess, & Weerapana, 2004), which has the capacity to spill across borders and lead to external tensions.
"Diversionary theory" suggests that, when
facing unpopularity arising from economic decline, sitting governments have increased incentives
to fabricate external military conflicts to create a 'rally around the flag' effect. Wang (1996), DeRouen
Furthermore, crises generally reduce the popularity of a sitting government.
(1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly
correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the
tendency towards diversionary
tactics are greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more
susceptible to being removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of
weak economic performance in the U nited S tates, and thus weak Presidential popularity, are statistically linked
to an increase in the use of force. In summary, recent economic scholarship positively correlates economic integration with an
increase in the frequency of economic crises, whereas political science scholarship links economic decline with
external conflict at systemic, dyadic and national levels.5 This implied connection between integration, crises and
armed conflict has not featured prominently in the economic-security debate and deserves more attention.
The industry is key to naval power – commercial shipyards are key
NLUS 12 (Navy League of the United States, “America’s Maritime Industry The foundation of
American seapower”, 2012, http://www.navyleague.org/files/americas-maritime-industry.pdf,
Date Verification – http://gsship.org/industry-links/)
Defense Industrial Base: Shipbuilding The American Maritime Industry also contributes
to our national defense by sustaining the shipbuilding and repair sector of our national
defense industrial base upon which our standing as a seapower is based. History has proven
that without a strong maritime infrastructure —shipyards, suppliers, and seafarers—no
country can hope to build and support a Navy of sufficient size and capability to protect its
interests on a global basis. Both our commercial and naval fleets rely on U.S. shipyards
and their numerous industrial vendors for building and repairs. The U.S. commercial shipbuilding and
repair industry also impacts our national economy by adding billions of dollars to U.S. economic output annually. In 2004, there were 89
shipyards in the major shipbuilding and repair base of the United States, defined by the Maritime Administration as including those shipyards
capable of building, repairing, or providing topside repairs for ships 122 meters (400 feet) in length and over. This includes six large shipyards
that build large ships for the U.S. Navy. Based on U.S. Coast Guard vessel registration data for 2008, in that year U.S. shipyards delivered 13
large deep-draft vessels including naval ships, merchant ships, and drilling rigs; 58 offshore service vessels; 142 tugs and towboats, 51 passenger
vessels greater than 50 feet in length; 9 commercial fishing vessels; 240 other self- propelled vessels; 23 mega-yachts; 10 oceangoing barges; and
224 tank barges under 5,000 GT. 11 Since the mid 1990’s, the industry has been experiencing a period of modernization and renewal that is
largely market-driven, backed by long-term customer commitments. Over the six-year period from 2000-05, a total of $2.336 billion was invested
The state of
the industrial base that services this nation’s Sea Services is of great concern to the U.S.
in the industry, while in 2006, capital investments in the U.S. shipbuilding and repair industry amounted to $270 million.12
Navy. Even a modest increase in oceangoing commercial shipbuilding would give a
substantial boost to our shipyards and marine vendors. Shipyard facilities at the larger shipyards in the United
States are capable of constructing merchant ships as well as warships, but often cannot match the output of shipyards in Europe and Asia. On the
other hand, U.S.
capability, but
yards construct and equip the best warships, aircraft carriers and submarines in the world. They are unmatched in
must maintain that lead . 13
15
Naval power solves multiple scenarios of great power conflict and regional
conflict escalation – those go nuclear
Conway et. al 7 (James – General, US Marine Corps, Commandant of the Marine Corps, Gary
Roughead – Admiral, U.S. navy, Chief of Naval Operations, Thad Allen – Admiral, U.S. Coast
Guard, Commandant of the Coast Guard, A Cooperative Strategy for 21st Century Seapower, p.
http://www.navy.mil/maritime/MaritimeStrategy.pdf)
The world economy is
tightly interconnected . Over the past four decades, total sea borne trade has more than
quadrupled: 90% of world trade and two-thirds of its petroleum are transported by sea. The sea-lanes and supporting
shore infrastructure are
the
lifelines of the modern global economy, visible and vulnerable symbols of the modern distribution
system that relies on free transit through increasingly urbanized littoral regions. Expansion of the global system has increased the prosperity of
many nations. Yet their continued growth may create increasing competition for resources and capital with other economic powers, transnational
corporations and international organizations. Heightened popular expectations and increased competition for resources,
coupled with scarcity, may encourage nations to exert wider claims of sovereignty over greater expanses of ocean,
waterways, and natural resources—potentially
resulting in conflict . Technology is rapidly expanding marine activities such as energy
development, resource extraction, and other commercial activity in and under the oceans. Climate
change is gradually opening up the
waters of the Arctic, not only to new resource development, but also to new shipping routes that may reshape the global transport system.
While these developments offer opportunities for growth, they are potential sources of competition and conflict for access and
natural resources. Globalization is also shaping human migration patterns, health, education, culture, and the conduct of conflict. Conflicts
are increasingly characterized by a hybrid blend of traditional and irregular tactics, decentralized planning and execution, and non-state actors
using both simple and sophisticated technologies in innovative ways. Weak or corrupt governments, growing dissatisfaction
among the disenfranchised, religious extremism, ethnic nationalism, and changing demographics—often spurred on by
the uneven and sometimes unwelcome advances of globalization—exacerbate tensions and are contributors to conflict. Concurrently,
a rising number of transnational actors and rogue states, emboldened and enabled with unprecedented access to the global stage, can cause
systemic disruptions in an effort to increase their power and influence. Their actions, often designed to purposely incite conflict between other
parties, will complicate attempts to defuse and allay regional conflict. Proliferation of weapons technology and information has
increased the capacity of nation-states and transnational actors to challenge maritime access, evade accountability for attacks, and
manipulate public perception. Asymmetric use of technology will pose a range of threats to the United States and its partners. Even more
worrisome, the
appetite for
nuclear
and other
weapons
of mass destruction is
growing among nations and non-state
antagonists. At the same time, attacks on legal, financial, and cyber systems can be equally, if not more, disruptive than kinetic weapons. The
vast majority of the world’s population lives within a few hundred miles of the oceans . Social instability in increasingly
crowded cities, many of which exist in already unstable parts of the world, has the potential to create significant disruptions. The effects of
climate change may also amplify human suffering through catastrophic storms, loss of arable lands, and coastal flooding, could lead to loss of
life, involuntary migration, social instability, and regional crises. Mass communications will highlight the drama of human suffering, and
disadvantaged populations will be ever more painfully aware and less tolerant of their conditions. Extremist ideologies will become increasingly
attractive to those in despair and bereft of opportunity. Criminal elements will also exploit this social instability. These
conditions combine to create an uncertain future and cause us to think anew about how we view
seapower . No one nation has the
resources required to provide safety and security throughout the entire maritime domain. Increasingly, governments, non-governmental
organizations, international organizations, and the private sector will form partnerships of common interest to counter these emerging threats.
Maritime Strategic Concept This strategy reaffirms the use of seapower to influence actions and activities at sea and ashore. The expeditionary
character and versatility of maritime forces provide the U.S. the asymmetric advantage of enlarging or contracting its military footprint in areas
where access is denied or limited. Permanent or prolonged basing of our military forces overseas often has unintended economic, social or
political repercussions. The sea is a vast maneuver space, where the presence of maritime forces can be adjusted as
conditions dictate to
enable flexible approaches to escalation,
de-escalation and deterrence of conflicts . The speed,
flexibility, agility and scalability of maritime forces provide joint or combined force commanders a range of options for responding to crises.
Additionally, integrated maritime operations, either within formal alliance structures (such as the North Atlantic Treaty Organization) or
more informal arrangements (such as the Global Maritime Partnership initiative), send
that we will act with others to ensure collective security and prosperity.
powerful messages to would-be aggressors
U nited S tates seapower will be globally postured to secure our
homeland and citizens from direct attack and to advance our interests around the world. As our security and prosperity are inextricably linked
16
with those of others, U.S. maritime forces will
be deployed to protect and sustain the
peaceful global system
comprised of interdependent networks of trade, finance, information, law, people and governance . We will employ the
global reach, persistent presence, and operational flexibility inherent in U.S. seapower to accomplish six key tasks, or strategic imperatives.
Where tensions are high or where we wish to demonstrate to our friends and allies our commitment to security and stability, U.S. maritime
forces will be characterized by regionally concentrated, forward-deployed task forces with the combat power to
limit regional
conflict , deter major power war , and should deterrence fail, win our Nation’s wars as part of a joint or combined
campaign. In addition, persistent, mission-tailored maritime forces will be globally distributed in order to contribute to homeland defense-indepth, foster and sustain cooperative relationships with an expanding set of international partners, and prevent or mitigate disruptions and crises.
Regionally Concentrated, Credible Combat Power Credible combat power will be continuously postured in the Western Pacific and the Arabian
Gulf/Indian Ocean to protect our vital interests, assure our friends and allies of our continuing commitment to regional security, and deter and
dissuade potential adversaries and peer competitors. This combat power can be selectively and rapidly repositioned to meet contingencies that
may arise elsewhere. These forces will be sized and postured to fulfill the following strategic imperatives: Limit regional conflict with forward
deployed, decisive maritime power. Today regional conflict has ramifications far beyond the area of conflict. Humanitarian crises,
violence spreading across borders, pandemics, and the interruption of vital resources are all possible when regional
crises erupt. While this strategy advocates a wide dispersal of networked maritime forces, we cannot be everywhere, and we cannot act to
mitigate all regional conflict. Where conflict threatens the global system and our national interests, maritime forces will be ready to
respond alongside other elements of national and multi-national power, to give political leaders a range of options for deterrence,
escalation and de-escalation. Maritime forces that are persistently present and combat-ready provide the Nation’s primary forcible entry
option in an era of declining access, even as they provide the means for this Nation to respond quickly to other crises. Whether over the horizon
or powerfully arrayed in plain sight, maritime forces can deter the ambitions of regional aggressors, assure friends and allies, gain and maintain
access, and protect our citizens while working to sustain the global order. Critical to this notion is the maintenance of a powerful fleet—ships,
aircraft, Marine forces, and shore-based fleet activities—capable of selectively controlling the seas, projecting power ashore, and protecting
friendly forces and civilian populations from attack. Deter major power war. No other disruption is as potentially disastrous to
global stability as war among major powers. Maintenance and extension of this Nation’s comparative seapower advantage is
a
key component of deterring major power war . While war with another great power strikes many as improbable,
the near-certainty of its ruinous effects demands that it be actively deterred using all elements of national power. The
expeditionary character of maritime forces—our lethality, global reach, speed, endurance, ability to overcome barriers to access, and
operational agility—provide the joint commander with a range of deterrent options. We will pursue an approach to deterrence that includes
a credible and scalable ability to retaliate against aggressors conventionally, unconventionally, and with nuclear forces. Win our Nation’s wars. In
times of war, our ability to impose local sea control, overcome challenges to access, force entry, and project and sustain
power ashore, makes our maritime forces an
indispensable element of the joint or combined force. This expeditionary
advantage must be maintained because it provides joint and combined force commanders with freedom of maneuver. Reinforced by a robust
sealift capability that can concentrate and sustain forces, sea control and power projection enable extended campaigns ashore.
17
Exports Advantage: 1AC
87% of the Outer Continental Shelf is off-limits to natural gas development,
expansion of leases is crucial to sustaining US Natural Gas Renaissance
Davis 14 (Carolyn, “Interior Takes First Step to Formulate 2017-2022 OCS Lease Sales,” 6-1314, Natural Gas Intelligence, http://www.naturalgasintel.com/articles/98695-interior-takes-firststep-to-formulate-2017-2022-ocs-lease-sales)
The Department of Interior on Friday took the initial step to develop the next schedule of
potential offshore oil and natural gas lease sales from 2017-2022, a multi-year process to evaluate all of the
Outer Continental Shelf (OCS) planning areas. Interior Secretary Sally Jewell and Acting Bureau of Ocean Energy Management (BOEM)
Director Walter Cruickshank jointly made the announcement in what they said would be a "robust public engagement process" to develop the
next schedule of offshore lease sales. A notice, published in the Federal Register, begins a 45-day period for a request for information (RFI) and
comments on preparing the OCS oil and gas leasing program. The notice does not identify any specific course of action. All of the planning areas
are to be reviewed in the first stage. "Substantial public involvement and extensive analysis will accompany all stages of the planning process,
which will take up to three years to complete," Jewell said. "The development of the next five-year program will be a thorough and open process
that incorporates stakeholder input and uses the best available science to develop a proposed offshore oil and gas program that creates jobs and
safely and responsibly meets the energy needs of the nation." The publication Friday "marks the first step of engaging interested parties across the
spectrum to balance the various uses and values inherent in managing the resources of federal offshore waters that belong to all Americans and
future generations." The
OCS leasing plan now in place was published in mid-2012 and extended to
2017 (see Daily GPI, June 29, 2012; Dec. 18, 2012). That plan proposed 15 lease sales in six offshore areas, including three in the Western and
Central Gulf of Mexico (GOM), and the portion of the Eastern GOM not under a Congressional moratorium (see Daily GPI, Dec. 2, 2010). The
No sales were scheduled for
the Atlantic or Pacific coasts. The OCS Lands Act requires the Interior secretary, through
BOEM, to prepare and maintain a schedule of proposed lease sales in federal waters,
indicating the size, timing and location of auctions that would best meet national energy needs for the five-year
program also included three potential lease sales in Alaska's Cook Inlet, Chukchi and Beaufort seas.
period following its approval. In developing the program, the secretary is required to achieve" an appropriate balance among the potential for
environmental impacts, for discovery of oil and gas, and for adverse effects on the coastal zone." "In issuing the RFI, BOEM does not propose to
schedule sales in particular areas, or make any preliminary decisions on what areas will be included in the schedule," said Cruickshank. "Rather,
the RFI provides an opportunity for interested parties to submit comments and suggestions about the potential for leasing and to identify
environmental and other concerns and uses that may be affected by offshore leasing." BOEM wants to consider a "wide array of input" on the
"economic, social and environmental values of all OCS resources, as well as the potential impact of oil and gas exploration and development on
other resource values of the OCS and the marine, coastal and human environments." With the information received, a draft proposed program
would be prepared by BOEM, followed by a proposed program and a proposed final program. At the same time, BOEM would prepare a
programmatic environmental impact statement, as required by the National Environmental Policy Act, to evaluate the potential environmental
impacts of various OCS leasing alternatives under the proposed program and to help inform decisions on the proposed final program. BOEM has
held five sales thus far in the 2012-2017 program, including annual auctions in the Central and Western GOM and a single sale in the portion of
the Eastern GOM. The five auctions have offered more than 60 million offshore acres, with 4.3 million leased, generating more than $2.3 billion
in high bids. A sixth lease sale scheduled for August is to offer 21 million acres in the Western GOM (see Daily GPI, April 15). Offshore Alaska,
the current five-year program, bedeviled by lawsuits filed by conservation groups and stakeholders, still includes one potential sale each for the
Chukchi Sea, Beaufort Sea and Cook Inlet. BOEM manages about 6,200 active OCS leases, mostly in the GOM, that cover more than 33 million
acres. Of those, 1,064 are producing leases covering 5.2 million producing acres -- the highest acreage under production since 2008. In 2013,
OCS oil and gas leases accounted for about 18% of domestic oil production and 5% of U.S. natural gas production. Industry
groups
wasted no time in offering their take on the Interior plan. "Opening new areas like the
Atlantic and eastern Gulf of Mexico would send a signal to the markets and to the world
that America's oil and natural gas renaissance is here to stay," said American Petroleum Institute Senior
Policy Adviser Andy Radford. "America's long-term energy security can only be ensured with a lasting
commitment to expanding oil and natural gas development both on and offshore." National Ocean Industries
Association (NOIA) President Randall Luthi called the announcement "a long anticipated first step toward what could mean more jobs, energy
and revenue to the people of the United States." The
current program expiring in 2017 "included no new
18
access , and has put the U.S. far behind many other nations that are actively pursuing
offshore oil and natural gas energy development, particularly in the Atlantic basin and the Arctic... "Canada,
Mexico, Venezuela, Brazil, Norway, Russia, Cuba and West African nations are examples
of countries actually moving ahead with Atlantic and Arctic offshore exploration and
development plans. Contrast that with the United States, where almost 87% of the Outer
Continental Shelf has been off limits for decades to even geophysical and geological
surveys, let alone exploratory drilling." Friday's action "is a crucial, but still only a first, step in truly adopting an all the
above energy policy," said the NOIA chief. Sen. Mary Landrieu (D-LA), chair of the Committee on Energy and Natural Resources, said
offshore exploration had helped to fuel the U.S. energy revolution and positioned the
country "to become an energy superpower...We need to open more areas to offshore oil
and gas exploration, not fewer. We need to press forward, not scale back."
Currently, perception of inadequate supply of natural gas causes domestic
infighting over LNG exports – new, sustainable supply is key to export
feasibility
Ebinger et al 12 (Charles, Senior Fellow and Director of the Energy Security Initiative –
Brookings, Kevin Massy, Assistant Director of the Energy Security Initiative – Brookings, and
Govinda Avasarala, Senior Research Assistant in the Energy Security Initiative – Brookings,
“Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas,” Brookings
Institution, Policy Brief 12-01,
http://www.brookings.edu/~/media/research/files/reports/2012/5/02%20lng%20exports%20ebing
er/0502_lng_exports_ebinger.pdf)
For an increase in U.S. exports of LNG to be considered feasible, there has to be an adequate and
sustainable domestic resource base to support it. Natural gas currently accounts for
approximately 25 percent of the U.S. primary energy mix.3 While it currently provides only a minority of U.S. gas
supply, shale gas production is increasing at a rapid rate: from 2000 to 2006, shale gas production increased by an average annual rate of 17
percent; from 2006 to 2010, production increased by an annual average rate of 48 percent (see Figure 2).4 According to the Energy Information
Adminis- tration (EIA), shale gas production in the United States reached 4.87 trillion cubic feet (tcf) in 2010, or 23 percent of U.S. dry gas
production. By 2035, it is estimated that shale gas production will account for 46 percent of total domestic natural gas production. Given the
centrality of shale gas to the future of the U.S. gas sector, much
of the discussion over potential exports hinges on
the prospects for its sustained availability and development. For exports to be feasible, gas from shale
and other unconventional sources needs to both offset declines in conventional production and compete
with new and incumbent domestic end uses. There have been a number of reports and studies that attempt to identify the
total amount of technically recoverable shale gas resources—the volumes of gas retrievable using current technology irrespective of cost—
available in the United States. These estimates vary from just under 700 trillion cubic feet (tcf) of shale gas to over 1,800 tcf (see table 1). To put
these numbers in context, the United States consumed just over 24 tcf of gas in 2010, suggesting that the estimates for the shale gas resource
alone would be enough to satisfy between 25 and 80 years of U.S. domestic demand. The estimates for recoverable shale gas resources also
compare with an estimate for total U.S. gas resources (onshore and offshore, including Alaska) of 2,543 tcf. Based on the range of estimates
below, shale gas could therefore account for between 29 percent and 52 percent of the total technically recoverable natural gas resource in the
United States. In addition to the size of the economically recoverable resources, two other major
factors will have an impact
on the sustainability of shale gas production: the productivity of shale gas wells; and the demand
for the equipment used for shale gas production. The productivity of shale gas wells has been a subject of much recent
debate, with some industry observers suggesting that undeveloped wells may prove to be less productive than
19
those developed to date. However, a prominent view among independent experts is that sustainability of shale gas production is not a
cause for serious concern, owing to the continued rapid improvement in technologies and production processes.
Perception is key – new supply removes uncertainty over shale gas – that
makes LNG exports economical
Ebinger et al 12 (Charles, Senior Fellow and Director of the Energy Security Initiative –
Brookings, Kevin Massy, Assistant Director of the Energy Security Initiative – Brookings, and
Govinda Avasarala, Senior Research Assistant in the Energy Security Initiative – Brookings,
“Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas,” Brookings
Institution, Policy Brief 12-01,
http://www.brookings.edu/~/media/research/files/reports/2012/5/02%20lng%20exports%20ebing
er/0502_lng_exports_ebinger.pdf)
Aside from the price impact of potential U.S.
would diminish U.S. “energy security”; that
LNG exports, a major concern among opponents is that such exports
exports would deny the United States of a strategically important
resource. The extent to which such concerns are valid depends on several factors, including the
size of the domestic resource base , and the liquidity and functionality of global trade. As Part I of this report notes,
geological evidence suggests that the volumes of LNG export under consideration would not materially affect
the availability of natural gas for the domestic market. Twenty years of LNG exports at the rate of 6 bcf/day, phased in
over the course of 6 years, would increase demand by approximately 38 tcf. As presented in Part I, four existing estimates of total technically
recoverable shale gas resources range from 687 tcf to 1,842 tcf; therefore, exporting 6 bcf/day of LNG over the course of twenty years would
consume between 2 and 5.5 percent of total shale gas resources. While the estimates for shale
gas reserves are uncertain, in a
scenario where reserves are perceived to be lower than expected , domestic natural gas prices
would increase and exports would almost immediately become uneconomic . In the long-term, it is
possible that U.S. prices and international prices will converge to the point at which they settle at similar levels. In that case, the United
States would have more than adequate import capacity (through bi-directional import/export facilities) to import
gas when economic.
Lifting federal restrictions diversifies US energy portfolio – natural gas firms
would export any surplus supply
Hartley and Medlock 7 (Dr. Peter, Professor of Economics – Rice University, Rice Scholar –
Baker Institute for Public Policy, and Dr. Kenneth B., Fellow in Energy Policy – Baker Institute
for Public Policy, Adjunct Assistant Professor of Economics – Rice University, “North American
Security of Natural Gas Supply in a Global Market,” James A. Baker III Institute for Public
Policy, November, http://www.bakerinstitute.org/programs/energy-forum/publications/energystudies/docs/natgas/ng_security-nov07.pdf)
Higher Lower 48 production as a result of opening access also results in lower imports of
LNG . Figure 13 depicts the change in LNG imports when access restrictions are lifted and all other factors remain unchanged. Total
LNG imports into the United States in 2015 fall by about 0.85 tcf (or from about 2.4 tcf to 1.55 tcf) and in 2030 by 1.6 tcf
(or from 8.8 tcf to 7.3 tcf). This figure includes pipeline imports to the United States from Mexico and Canada that
are being reshipped from LNG import terminals from those countries. The decline under this scenario is represents a fall
in LNG market share in the United States from just over 31 percent in the Reference Case in 2030 to 22 percent. The LNG receiving
20
terminals that are most directly affected by the opening of access for drilling are those that are
closest to these newly opened areas of the Atlantic, Pacific and east Gulf of Mexico OCS. For
example, the terminals at Baja, New Brunswick, Pascagoula, Cove Point, and Delaware Bay see the largest volume
reductions, in some years accounting for over 80 percent of the difference in overall import flows .
This, like the situation with Alaska, represents some cannibalization of market share as companies who might drill in the now
restricted OCS would be the same firms whose LNG would be pushed out of the U.S. market. One
offsetting factor to the loss of market share for LNG and Alaskan supplies is that fact that lower average prices give a slight boost to overall U.S.
demand. When access restrictions are lifted, lower prices encourage a modest increase in demand of about 1.3 bcfd by 2030, of which 1.0 bcfd is
added natural gas demand in the power generation sector. While the change in average annual prices under this unrestricted scenario is not large,
open access also allows existing demand to be served at lower cost. Thus, the net surplus benefits (including added consumer welfare) associated
with expanded use of gas at lower prices can be quite large. For example, the benefit to consumers of a $0.42 reduction in price in 2017 (the
maximum decrease seen over the modeling period) results in an annual saving of $10.3 billion for natural gas consumers. Of course, the benefits
are lower in other years, but cumulative benefits still range into the many billions of dollars. Open
access also brings other
potential benefits, such as providing a degree of diversification that mitigates the extent to which
a cartel in international natural gas markets can operate effectively to threaten U.S. energy
security. This increased diversification is evident in Figure 14, which depicts the changes in LNG imports by major regions around the world.
We see that when access restrictions are removed, the resulting decline in North American LNG imports
is accompanied by an increase in LNG imports in other regions around the world. This occurs as global prices are
reduced and demand is encouraged. Thus, both energy security benefits as well as welfare benefits accrue to
nations outside the United States as a result of eliminating access restrictions. 30 In addition, when
access restrictions are removed, LNG exports from the more marginal producers, which tend to be
OPEC countries (Iran, other Middle East exporters, Venezuela, and to a lesser extent countries in North and West Africa), decline at
the margin, falling collectively by 0.27 tcf in 2015, and as much as 0.43 tcf by 2030 (see Figure 15). Even though the volumes are small, the
analysis suggests that this
less constrained supply picture for the global market can contribute to
rendering the United States and its allies less vulnerable to the will of any one producer, or the
collective will of any group of producers, by enhancing the diversification of supply options. The wider swath of
alternative supplies for Europe and northeast Asia translates into significantly reduced potential for producers in Russia and the Middle East to
exert market power.
Offshore terminals solve these issues and makes exports feasible
Kilisek 12 (Roman – Foreign Policy Association, Researcher - Energy Security Desk & Europe
Desk, Master of Arts, International Relations & Diplomacy – Seton Hall University, Researcher
for the President & CEO Frederick Kempe, The Atlantic Council of the United States, “The
Bright Future of Floating LNG Liquefaction, Regasification and Storage Units”, 7/19,
http://foreignpolicyblogs.com/2012/07/19/the-bright-future-of-floating-lng-liquefactionregasification-and-storage-units/)
This is a newsworthy event in the LNG (Liquefied Natural Gas) industry because it is the first time
that a floating liquefaction unit is moving from concept to commercial reality . What are
the advantages of those floating LNG facilities over conventional liquefaction plants? First off,
there is an obvious advantage in tapping offshore resources . In addition to the ability to
station the floating vessel directly over distant offshore fields and thereby saving on a
costly subsea pipeline to shore , it allows the operator of the facility to move the production
facility to a new location once a field is depleted. This would also allow energy companies to
exploit smaller fields and now earn a realistic return on investment. Other cost savings are to be
21
expected during the construction phase for the required marine and loading facilities which often end up costing billions of
dollars. Finally , in a world full of risk it can significantly reduce the security and political risk
(inter alia, environmental regulation and permits) involved in choosing a land-based site for
LNG export facilities in African countries (Nigeria, Angola and Mozambique) and countries in the Middle East as well as South
America. The US should contemplate something like this along the East Coast for export to
Europe, and along the West Coast for export to South America (Chile) and Asia.
Global export contracts are being renegotiated – now is key to get the US in
the LNG export game
Ebinger et al 12 (Charles, Senior Fellow and Director of the Energy Security Initiative –
Brookings, Kevin Massy, Assistant Director of the Energy Security Initiative – Brookings, and
Govinda Avasarala, Senior Research Assistant in the Energy Security Initiative – Brookings,
“Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas,” Brookings
Institution, Policy Brief 12-01,
http://www.brookings.edu/~/media/research/files/reports/2012/5/02%20lng%20exports%20ebing
er/0502_lng_exports_ebinger.pdf).
LNG exports will help to sustain market liquidity in what looks to be an increasingly tight LNG
market beyond 2015 (see Figure 10). Should LNG exports from the United States continue to be permitted, they will add to roughly 10
bcf/day of LNG that is expected to emerge from Australia between 2015 and 2020. Nevertheless, given the projected growth in demand for
natural gas in China and India and assuming that some of Japan’s nuclear capacity remains offline, demand for natural gas will outpace the
incremental supply. This makes U.S. LNG even more valuable on the international market. Although it will be important to global LNG markets,
it is unlikely that the emergence of the United States as an exporter of LNG will change the existing pricing structure overnight. Not only is the
market still largely dependent on long-term contracts, the overwhelming majority of new liquefaction capacity emerging in the next decade
(largely from Australia) has already been contracted for at oil-indexed rates.108 The incremental LNG volumes supplied by the United States at
floating Henry Hub rates will be small in comparison. But while U.S. LNG will not have a transformational impact, by
establishing an
alternate lower price for LNG derived through a different market mechanism, U.S. exports may
be central in catalyzing future changes in LNG contract structure . As previously mentioned, this impact is
already being felt in Europe. A number of German utilities have either renegotiated contracts or are
seeking arbitration with natural gas suppliers in Norway and Russia. The Atlantic Basin will be a
more immediate beneficiary of U.S. LNG exports than the Pacific Basin as many European contracts allow for periodic
revisions to the oil-price linkage.109 In the Pacific Basin this contractual arrangement is not as common and most consumers are tied to their
respective oil-linkage formulae for the duration of the contract.110 Despite the increasing demand following the Fukushima nuclear accident,
however, Japanese
LNG consumers are actively pursuing new arrangements for LNG
contracts .111 There are other limits to the extent of the impact that U.S. LNG will have on global markets. It is unlikely that many of the
LNG export facilities under consideration will reach final investment decision. Instead, it is more probable that U.S. natural gas prices will have
rebounded sufficiently to the point that exports are not commercially viable beyond a certain threshold. (Figure 11 illustrates the estimated costs
of delivering LNG to Japan in 2020.) This threshold, expected by many experts to be roughly 6 bcf/day by 2025, is modest in comparison to the
roughly 11 bcf/day of Australian LNG export projects that have reached final investment decision and are expected to be online by 2020.
Sustainable US LNG exports spurs cooperative LNG trading with China –
that’s key to overall relations
Livingston and Tu 12 (David, Junior Fellow in the Energy and Climate Program – Carnegie
Endowment for International Peace, and Kevin Jianjun, Senior Associate in the Energy and
Climate Program – Carnegie Endowment for International Peace, “Feeding China’s Energy
22
Appetite, Naturally,” Energy Tribune, 7-17,
http://www.energytribune.com/articles.cfm/11206/Feeding-Chinas-Energy-Appetite-Naturally)
Ever since CNOOC, one of China’s “big three” national oil companies, made an ill-fated bid to take over Unocal Corporation in 2005, Sino-
U.S. energy relations have been
marred with mistrust . Foreign acquisitions by China’s national oil
companies thereafter have largely avoided the United States. Many were thus caught off guard by recent reports that Sinopec has
emerged as a leading suitor for some of the $7 billion in natural gas assets that Chesapeake Energy must shed to avoid a breach of its debt
covenants. Yet upon closer inspection, the move is deft and bears the imprint of lessons well-learned. Chinese national oil companies
know from prior experience that in the United States they must wear kid gloves to avoid getting burned . With U.S.
natural gas prices projected to remain at $2-4/Mmbtu and far higher returns on investment elsewhere around the globe, why would Sinopec pour
capital into American shale gas production when so many U.S. companies are shutting down rigs? There are a number of macro- and microdynamics at play here. China’s demand for gas is expected to grow rapidly in the coming years. Natural gas currently
accounts for only 4 percent of the country’s energy mix, but the International Energy Agency projects this rising to 13 percent by
2035. The same organization predicts that China will account for roughly a quarter of global gas demand growth over the
same period. There is also a high level of uncertainty over how reliant the country will be on foreign gas. Much of this will depend on China’s
ability to exploit its vast domestic shale gas resources. If unconventional development is well-orchestrated, Chinese gas imports as a share of total
demand could be as low as 20 percent in 2035. Alternatively, slow progress in unconventional gas development could lead to a dependency rate
north of 50 percent, according to the IEA. In either scenario, a stake in Chesapeake’s gas assets could potentially pay dividends
for China. Chesapeake was one of the first to commit wholeheartedly to the potential of shale gas in the United States. It has snatched up vast
swaths of shale acreage, and possesses the technology and know-how to efficiently extract unconventional gas from these basins. Sinopec would
love nothing more than to gain firsthand experience with hydraulic fracturing and horizontal drilling techniques that could eventually be applied
to China’s massive shale resources. According to the U.S. Energy Information Administration, technically recoverable shale gas reserves in
China are at least 50 percent greater than the sizeable shale endowment in the United States. Sinopec drilled its first shale gas well in Chongqing
on June 9, but until it develops the capacity to unlock domestic resources en masse at low cost, acquisitions are the quickest way to bolster its gas
reserves. The company might be seeking to secure a dedicated stream of U.S. natural gas production for shipping to
China as liquefied natural gas in the future. This is a complicated proposition, especially considering that the scale of
U.S. LNG exports is highly uncertain. The prospect of rising domestic gas prices as a consequence of satiating Chinese demand would
become a thorny political issue, whether merited or not. At the corporate level, Sinopec’s own characteristics reveal an internal logic to the
prospective Chesapeake deal. The move is driven by its international market-oriented new boss, Fu Chengyu. Fu served at the helm of CNOOC
until 2010 and his failure to secure the Unocal deal in 2005 will undoubtedly inform his current attempt. Evidence of this can already be seen in
Sinopec’s preference for partial assets over outright ownership. Of course, Sinopec precluding itself from an operational role also potentially
distances it from the technologies and methodologies that it covets. Nevertheless, Fu has remains tempted by U.S. shale gas assets with
attractive valuations. Sinopec has been slower getting into America than its rival CNOOC, which recently entered into two billion-dollar
joint ventures with Chesapeake in the Niobrara and Eagle Ford shale. Moreover, Sinopec suffers from an unbalanced portfolio, with too many
loss-making refineries and too few premiere upstream assets. Oil and gas projects in Iran that have been abandoned by Western
companies would normally be an attractive target, but Beijing has increasingly pressured national oil companies to
curtail involvement in the pariah state. Unsurprisingly, Sinopec has recently returned its gaze to the United States. Although U.S. natural
gas won’t offer lucrative returns until prices rise, Chesapeake’s acreage is likely to sell at a discount and would allow Sinopec to hedge its
holdings in more geopolitically tenuous markets. After his $2.5 billion deal with Devon Energy in January for stakes in five different liquids-rich
shale plays, a tie-up with Chesapeake would solidify Fu’s reputation as a shrewd CEO. For China, the deal offers another geopolitical
hedge—the opportunity to turn dollar-denominated treasury bills into real energy assets. The Chinese government
would likely play a key role in financing any large deals pursued by its national oil companies. This is an aspect of the
deal worth watching. CNOOC’s critics back in 2005 objected to the assortment of low-interest and interest-free loans backed by Chinese
government coffers. Were Sinopec to rely on a similar arrangement of state support, it might be met with resistance in the United States. But the
U.S. congress is in a much weaker position than it was in 2005. Partial asset ownership is not the wholesale surrender of a strategic corporation,
and the American natural gas industry would welcome with open arms the capital inflow. This points to the most
constructive way forward for both Washington and Beijing. China is still trying to grow a domestic shale gas industry without
opening the market to international players. During the second round of shale gas bids in China, a small window was opened for other domestic
companies, but none of them have more sophisticated technology than CNPC, Sinopec, or CNOOC. Sooner or later, China will realize that
there are no shortcuts if shale gas is to be developed safely, efficiently, and responsibly. It
should follow its own offshore oil
exploration model, offering up its domestic market in return for cutting-edge technology. The Chesapeake deal may pay
dividends to both the United States and China, but
the synergy will go even further
if Beijing eventually returns the favor at
home.
23
Specifically – that removes Chinese fears of US encirclement – solves USChina conflict and spills over to clean tech cooperation
Stone 11 (Matt, Energy Consultant, US Foreign Policy Analyst, and Junior Associate –
McKinsey & Company, “Natural Gas,” The Diplomat, 2-15, http://thediplomat.com/whats-nextchina/natural-gas/)
In the space of just a couple of years, natural
gas has become the 'next big thing' in energy circles. The recent expansion of unconventional
gas production in North America has transformed the United States into the world’s top producer of the fuel . Cleanerburning than coal, gas is expected to benefit in a carbon-constrained world as it displaces coal in the electricity-generation sector. Moreover a burgeoning
interconnected global gas market, spurred by the expansion of the sea-borne liquefied natural gas (LNG) trade, is helping to increase
market flexibility so that disruptions like those caused by Russia-Ukrainian disputes have less pernicious effects on
downstream countries. Hoping to take advantage of these developments, China has crafted a strategy for natural gas that aims to increase domestic
production and secure access to gas resources in neighbouring countries. For Beijing, gas offers an opportunity to power its growing economy in a less polluting way
than burning coal (although coal is expected to remain vital to China’s rapid economic ascent). Natural gas may also have a role to play in the transportation sector,
where Beijing is experimenting in dramatic fashion with compressed natural gas (CNG) in automobiles. Historically, oil’s prominent and essential role in the
transportation sector has driven its centrality in international affairs. A
would allow China to be marginally
transportation sector that could rely jointly on oil and natural gas
more indifferent to Middle Eastern geopolitics—in stark contrast with the US experience
of the past half-century. The BP Statistical Review of World Energy 2010 estimates that China produced approximately 85 billion cubic metres (bcm) of natural gas in
2009, while consuming 89 bcm, an import gap that’s expected to expand rapidly in the coming years as gas demand outpaces domestic supply. Indeed, the
International Energy Agency (IEA) sees China’s gas demand increasing by 6 percent annually through 2035. The reality is, though, that the
country’s own
conventional natural gas resources are nowhere near enough to meet this growing demand, forcing Beijing to ramp
up its efforts to access gas supplies abroad—particularly in Central Asia, Russia and Burma . It’s here that the frequent portrayal
of Beijing as a cash-flush power willing to throw money around to lock up resources is misplaced. China has in fact been carefully expanding its influence in Central
Negotiations with Russia over gas supplies, for example, have
been ongoing for years (much to Moscow’s consternation). The proposal on the table now would mean two pipelines entering China—one in Xinjiang from
Asia and Russia in particular, biding its time until the right deal has come along.
the Russian region of Altai and another in Manchuria from the Russian Far East. The former line would have a capacity of 30 bcm per year, the latter 38 bcm per year.
But lack of agreement on the price Russian state gas company Gazprom will charge has stalled things. Of course, there’s more to this than pricing. Although
Moscow enjoys a privileged position in the export of Russian oil and gas for both economic and political reasons, its manipulation of
energy flows to Europe has tarnished the country’s reputation as a reliable supplier of hydrocarbons. Meanwhile,
investments in the gas fields that would supply China have been slow to materialize . Both points will likely have
made Beijing think carefully about the implications of an inconsistent supply of Russian gas. This reticence over gas is in contrast with a deal
struck over crude oil, with China having issued a $25 billion loan to Russia in February 2009 to secure a 20-year supply of crude oil. At the same time, Beijing
has postponed a decision on a loan for natural gas—a conspicuous vote of no confidence in Russia’s short-term
attractiveness as a gas supplier. If the story of the Russia-China gas trade relationship is one of chess-like negotiations and Beijing’s reticence,
China’s experience in Central Asia has been more straightforward . China signed an agreement to build a gas pipeline out of Turkmenistan
via Uzbekistan and Kazakhstan in 2006. Backstopped with a $4 billion loan to Ashgabat and upstream contracts for China’s state-owned CNPC in Turkmenistan, the
pipeline came online in December 2009—impressively swift. However, now that it’s operational, Beijing has leveraged its position to extract concessions from the
countries along the pipeline. Turkmenistan in particular is under pressure. Russia has cut its purchases of Turkmen gas by three-quarters since 2008, prompting
Ashgabat to push China to buy more gas. But Beijing, keenly aware of its negotiating advantage, has held out, purchasing only 4 bcm this
year. In the case of Uzbekistan and Kazakhstan, China has spurred competition for access to the pipeline, with the two engaging in development of gas fields and
infrastructure in order to access the pipeline before the other. That said, China may decide it’s in its own interests to selectively manage access to the pipeline in order
to win concessions on price and upstream contracts in each country, which would provide it potent political leverage with countries that would prefer to develop
robust alternatives to exporting hydrocarbons to Russia. But can Beijing afford to play the long game with neighbouring gas suppliers given its fast-growing demand?
A look at China’s alternative sources of supply, particularly domestic production and increasing volumes of LNG in the
country’s gas supply mix, offer a
glimpse of a possible answer . Beijing has prioritized the development of domestic gas supply,
Washington has
promoted this cooperation through the US-China Shale Gas Resource Initiative, a mechanism announced in November 2009 to share
expertise and technology for unconventional gas production. In addition, LNG spot prices are currently depressed , prompting Chinese
energy firms to purchase spot cargoes through the country’s three LNG import terminals . Sixteen more LNG import
partnering with a number of Western oil firms to develop the country’s unconventional gas resources, which are thought to be large.
terminals are
under consideration . Such trends point to a relative decline in the importance of Russian and Central Asian gas to China’s
energy security future—a narrative that Beijing’s diplomats are sure to promote in Moscow, Ashgabat, Tashkent and Astana. Chinese national oil companies operate
with the explicit backing of the Chinese state–including the state budget.In a region where governments treat their oil and gas resources as strategic commodities to be
traded for political perquisites, Chinese companies therefore possess an in-built advantage. But more importantly, China’s unity of effort—political and commercial—
allows Beijing to act strategically, with long time horizons, in order to secure the best deal. While China couldn’t have predicted the revolution in unconventional gas
production or the global recession, its patience has strengthened its bargaining position vis-à-vis Russia and the Central Asian states. Beijing’s engagement also has
24
the tacit consent of Washington. Western policy in the post-Soviet period has been designed to reinforce Central Asian sovereignty by developing export corridors for
oil and gas that avoid Russian (and Iranian) territory. While the United States and Europe have had some success on the western edge of the Caspian Sea by
constructing the Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas pipeline, large-volume trans-Caspian projects for Kazakh and Turkmen oil and
gas have been delayed for commercial and geopolitical reasons. In this regard, China has developed a non-Russian, non-Iranian export corridor for Turkmen, Uzbek,
and Kazakh gas where the West couldn’t (there’s also a Kazakhstan-China oil pipeline in operation). In a sense, this
should provide
greater
stability in an important and strategic part of the world. And China, meanwhile, appears to have not yet attempted to
translate its newfound economic heft into political influence to the West’s detriment: Beijing has so far avoided
pushing for the curtailment of the Western military presence in Central Asia despite ongoing worries about
‘encirclement.’ China’s energy trade relationships with Russia and Central Asia should also make the Middle Kingdom feel more assured about its energy
security future. Much
of China’s
naval build-up and assertive behaviour , especially in the South China Sea, in recent years is
motivated by concerns about the security of China’s sea-borne energy imports from the Middle East, both oil and LNG. In
the post-World War II period, the US Navy has played the role of guarantor of open trade on the high seas, but Beijing
appears to believe this commitment won't continue in the event of conflict with Washington over Taiwan or North Korea.
The United States’ efforts to help China expand domestic gas production and its lack of opposition to China-bound pipelines out of
Central Asia and Russia should
be interpreted by Beijing as
indicative of the US commitment to help China grow
comfortable about its place in the American-led world order. Natural gas is clearly an important component of
Beijing’s energy strategy over the next century. Thus far, China’s approach to accessing foreign and domestic sources of
supply has proven collaborative, rather than confrontational, in nature. US assistance on Chinese unconventional gas
production presages
greater cooperation on energy matters , including in clean-tech where Beijing and Washington
can best address climate-altering carbon emissions. In Russia and Central Asia, meanwhile, China has husbanded its resources and influence to
achieve advantageous deals.
That’s the most likely for escalated US-China conflict
Glaser 12 (Bonnie S., Senior Fellow – Center for Strategic and International Studies, “Armed
Clash in the South China Sea,” CFR, April, http://www.cfr.org/east-asia/armed-clash-southchina-sea/p27883)
The risk of conflict in the South China Sea is significant. China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines have
competing territorial and jurisdictional claims, particularly over rights to exploit the region's possibly extensive
reserves of oil and gas. Freedom of navigation in the region is also a contentious issue, especially between the United
States and China over the right of U.S. military vessels to operate in China's two-hundred-mile exclusive economic zone
(EEZ). These tensions are shaping—and being shaped by—rising apprehensions about the growth of China's military
power and its regional intentions. China has embarked on a substantial modernization of its maritime paramilitary
forces as well as naval capabilities to enforce its sovereignty and jurisdiction claims by force if necessary. At the same
time, it is developing capabilities that would put U.S. forces in the region at risk in a conflict , thus potentially denying
access to the U.S. Navy in the western Pacific. Given the growing importance of the U.S.-China relationship, and the Asia-Pacific
region more generally, to the global economy, the United States has a major interest in preventing any one of the various disputes
in the South China Sea from
escalating militarily . The Contingencies Of the many conceivable contingencies
involving an armed clash in the South China Sea, three especially threaten U.S. interests and could potentially prompt the United
States to use force. The
most likely and dangerous contingency is a clash stemming from U.S. military
operations within China's EEZ that provokes an
armed Chinese response . The United States holds that nothing in the
United Nations Convention on the Law of the Sea (UNCLOS) or state practice negates the right of military forces of all nations to conduct
military activities in EEZs without coastal state notice or consent. China insists that reconnaissance activities undertaken without prior
notification and without permission of the coastal state violate Chinese domestic law and international law. China routinely intercepts
U.S. reconnaissance flights conducted in its EEZ and periodically does so in
the risk of an accident
Hainan Island. A comparable
aggressive ways that increase
similar to the April 2001 collision of a U.S. EP-3 reconnaissance plane and a Chinese F-8 fighter jet near
maritime incident could be triggered by Chinese vessels harassing a U.S. Navy
25
surveillance ship operating in its EEZ, such as occurred in the 2009 incidents involving the USNS Impeccable and the USNS
Victorious. The large growth of Chinese submarines has also increased the danger of an incident, such as when a Chinese submarine collided
with a U.S. destroyer's towed sonar array in June 2009. Since neither U.S. reconnaissance aircraft nor ocean surveillance vessels are armed, the
United States might respond to dangerous behavior by Chinese planes or ships by dispatching armed escorts. A miscalculation or
misunderstanding could then result in a
deadly exchange of fire , leading to further military escalation
and precipitating a major political crisis. Rising U.S.-China mistrust and intensifying bilateral strategic competition
would likely make managing such a crisis more difficult. A second contingency involves conflict between China and the
Philippines over natural gas deposits, especially in the disputed area of Reed Bank, located eighty nautical miles from Palawan. Oil survey
ships operating in Reed Bank under contract have increasingly been harassed by Chinese vessels. Reportedly, the United Kingdom-based Forum
Energy plans to start drilling for gas in Reed Bank this year, which could provoke an aggressive Chinese response. Forum Energy is only one of
fifteen exploration contracts that Manila intends to offer over the next few years for offshore exploration near Palawan Island. Reed Bank is a red
line for the Philippines, so this
contingency could
quickly escalate to violence
if China intervened to halt the drilling. The United States could be
drawn into a China-Philippines conflict because of its 1951 Mutual Defense Treaty with the Philippines. The treaty states, "Each Party recognizes that an armed attack in the Pacific Area on either of the Parties would be dangerous to
its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes." American officials insist that Washington does not take sides in the territorial dispute in the South
China Sea and refuse to comment on how the United States might respond to Chinese aggression in contested waters. Nevertheless, an apparent gap exists between American views of U.S. obligations and Manila's expectations. In
mid-June 2011, a Filipino presidential spokesperson stated that in the event of armed conflict with China, Manila expected the United States would come to its aid. Statements by senior U.S. officials may have inadvertently led Manila
to conclude that the United States would provide military assistance if China attacked Filipino forces in the disputed Spratly Islands. With improving political and military ties between Manila and Washington, including a pending
agreement to expand U.S. access to Filipino ports and airfields to refuel and service its warships and planes, the United States would have a great deal at stake in a China-Philippines contingency. Failure to respond would not only set
back U.S. relations with the Philippines but would also potentially undermine U.S. credibility in the region with its allies and partners more broadly. A U.S. decision to dispatch naval ships to the area, however, would risk a U.S.China naval confrontation. Disputes between China and Vietnam over seismic surveys or drilling for oil and gas could also trigger an armed clash for a third contingency. China has harassed PetroVietnam oil survey ships in the past
that were searching for oil and gas deposits in Vietnam's EEZ. In 2011, Hanoi accused China of deliberately severing the cables of an oil and gas survey vessel in two separate instances. Although the Vietnamese did not respond with
force, they did not back down and Hanoi pledged to continue its efforts to exploit new fields despite warnings from Beijing. Budding U.S.-Vietnam relations could embolden Hanoi to be more confrontational with China on the South
China Sea issue. The United States could be drawn into a conflict between China and Vietnam, though that is less likely than a clash between China and the Philippines. In a scenario of Chinese provocation, the United States might
opt to dispatch naval vessels to the area to signal its interest in regional peace and stability. Vietnam, and possibly other nations, could also request U.S. assistance in such circumstances. Should the United States become involved,
subsequent actions by China or a miscalculation among the forces present could result in exchange of fire. In another possible scenario, an attack by China on vessels or rigs operated by an American company exploring or drilling for
hydrocarbons could quickly involve the United States, especially if American lives were endangered or lost. ExxonMobil has plans to conduct exploratory drilling off Vietnam, making this an existential danger. In the short term,
however, the likelihood of this third contingency occurring is relatively low given the recent thaw in Sino-Vietnamese relations. In October 2011, China and Vietnam signed an agreement outlining principles for resolving maritime
Strategic warning signals that indicate heightened
risk of conflict include political decisions and statements by senior officials, official and unofficial media reports,
and logistical changes and equipment modifications. In the contingencies described above, strategic warning indicators
could include heightened rhetoric from all or some disputants regarding their territorial and strategic interests . For
example, China may explicitly refer to the South China Sea as a core interest ; in 2010 Beijing hinted this was the case but subsequently backed away from the
issues. The effectiveness of this agreement remains to be seen, but for now tensions appear to be defused. Warning Indicators
assertion. Beijing might also warn that it cannot "stand idly by" as countries nibble away at Chinese territory, a formulation that in the past has often signaled willingness to use force. Commentaries and editorials in authoritative
media outlets expressing China's bottom line and issuing ultimatums could also be a warning indicator. Tough language could also be used by senior People's Liberation Army (PLA) officers in meetings with their American
counterparts. An increase in nationalistic rhetoric in nonauthoritative media and in Chinese blogs, even if not representing official Chinese policy, would nevertheless signal pressure on the Chinese leadership to defend Chinese
interests. Similar warning indicators should be tracked in Vietnam and the Philippines that might signal a hardening of those countries' positions. Tactical warning signals that indicate heightened risk of a potential clash in a specific
time and place include commercial notices and preparations, diplomatic and/or military statements warning another claimant to cease provocative activities or suffer the consequences, military exercises designed to intimidate another
claimant, and ship movements to disputed areas. As for an impending incident regarding U.S. surveillance activities, statements and unusual preparations by the PLA might suggest a greater willingness to employ more aggressive
means to intercept U.S. ships and aircraft. Implications for U.S. Interests The United States has significant political, security, and economic interests at stake if one of the contingencies should occur. Global rules and norms. The
United States has important interests in the peaceful resolution of South China Sea disputes according to international law. With the exception of China, all the claimants of the South China Sea have attempted to justify their claims
based on their coastlines and the provisions of UNCLOS. China, however, relies on a mix of historic rights and legal claims, while remaining deliberately ambiguous about the meaning of the "nine-dashed line" around the sea that is
drawn on Chinese maps. Failure to uphold international law and norms could harm U.S. interests elsewhere in the region and beyond. Ensuring freedom of navigation is another critical interest of the United States and other regional
states. Although China claims that it supports freedom of navigation, its insistence that foreign militaries seek advance permission to sail in its two-hundred-mile EEZ casts doubt on its stance. China's development of capabilities to
deny American naval access to those waters in a conflict provides evidence of possible Chinese intentions to block freedom of navigation in specific contingencies. Alliance security and regional stability. U.S. allies and friends around
the South China Sea look to the United States to maintain free trade, safe and secure sea lines of communication (SLOCs), and overall peace and stability in the region. Claimants and nonclaimants to land features and maritime waters
in the South China Sea view the U.S. military presence as necessary to allow decision-making free of intimidation. If nations in the South China Sea lose confidence in the United States to serve as the principal regional security
guarantor, they could embark on costly and potentially destabilizing arms buildups to compensate or, alternatively, become more accommodating to the demands of a powerful China. Neither would be in the U.S. interest. Failure to
reassure allies of U.S. commitments in the region could also undermine U.S. security guarantees in the broader Asia-Pacific region, especially with Japan and South Korea. At the same time, however, the United States must avoid
getting drawn into the territorial dispute—and possibly into a conflict—by regional nations who seek U.S. backing to legitimize their claims. Economic interests. Each year, $5.3 trillion of trade passes through the South China Sea;
U.S. trade accounts for $1.2 trillion of this total. Should a crisis occur, the diversion of cargo ships to other routes would harm regional economies as a result of an increase in insurance rates and longer transits. Conflict of any scale in
the South China Sea would hamper the claimants from benefiting from the South China's Sea's proven and potential riches. Cooperative relationship with China. The stakes and implications of any U.S.-China incident are far greater
than in other scenarios. The United States has an abiding interest in preserving stability in the U.S.-China relationship so that it can continue to secure Beijing's cooperation on an expanding list of regional and global issues and more
tightly integrate China into the prevailing international system. Preventive Options Efforts should continue to resolve the disputes over territorial sovereignty of the South China Sea's land features, rightful jurisdiction over the waters
and seabed, and the legality of conducting military operations within a country's EEZ, but the likelihood of a breakthrough in any of these areas is slim in the near term. In the meantime, the United States should focus on lowering the
risk of potential armed clashes arising from either miscalculation or unintended escalation of a dispute. There are several preventive options available to policymakers—in the United States and other nations—to avert a crisis and
conflict in the South China Sea. These options are not mutually exclusive. Support U.S.-China Risk-reduction Measures Operational safety measures and expanded naval cooperation between the United States and China can help to
reduce the risk of an accident between ships and aircraft. The creation of the Military Maritime Consultative Agreement (MMCA) in 1988 was intended to establish "rules of the road" at sea similar to the U.S.-Soviet Incidents at Sea
Agreement (INCSEA), but it has not been successful. Communication mechanisms can provide a means to defuse tensions in a crisis and prevent escalation. Political and military hotlines have been set up, though U.S. officials have
low confidence that they would be utilized by their Chinese counterparts during a crisis. An additional hotline to manage maritime emergencies should be established at an operational level, along with a signed political agreement
committing both sides to answer the phone in a crisis. Joint naval exercises to enhance the ability of the two sides to cooperate in counter-piracy, humanitarian assistance, and disaster relief operations could increase cooperation and
help prevent a U.S.-China conflict. Bolster Capabilities of Regional Actors Steps could be taken to further enhance the capability of the Philippines military to defend its territorial and maritime claims and improve its indigenous
domain awareness, which might deter China from taking aggressive action. Similarly, the United States could boost the maritime surveillance capabilities of Vietnam, enabling its military to more effectively pursue an anti-access and
area-denial strategy. Such measures run the risk of emboldening the Philippines and Vietnam to more assertively challenge China and could raise those countries' expectations of U.S. assistance in a crisis. Encourage Settlement of the
Sovereignty Dispute The United States could push for submission of territorial disputes to the International Court of Justice or the International Tribunal for the Law of the Sea for settlement, or encourage an outside organization or
mediator to be called upon to resolve the dispute. However, the prospect for success in these cases is slim given China's likely opposition to such options. Other options exist to resolve the sovereignty dispute that would be difficult,
but not impossible, to negotiate. One such proposal, originally made by Mark Valencia, Jon Van Dyke, and Noel Ludwig in Sharing the Resources of the South China Sea, would establish "regional sovereignty" over the islands in the
South China Sea among the six claimants, allowing them to collectively manage the islands, territorial seas, and airspace. Another option put forward by Peter Dutton of the Naval War College would emulate the resolution of the
dispute over Svalbard, an island located between Norway and Greenland. The Treaty of Spitsbergen, signed in 1920, awarded primary sovereignty over Svarlbard to Norway but assigned resource-related rights to all signatories. This
solution avoided conflict over resources and enabled advancement of scientific research. Applying this model to the South China Sea would likely entail giving sovereignty to China while permitting other countries to benefit from the
resources. In the near term, at least, such a solution is unlikely to be accepted by the other claimants. Promote Regional Risk-reduction Measures The Association of Southeast Asian Nations (ASEAN) and China agreed upon
multilateral risk-reduction and confidence-building measures in the 2002 Declaration on the Conduct of Parties in the South China Sea (DOC), but have neither adhered to its provisions (for example, to resolve territorial and
jurisdictional disputes without resorting to the threat or use of force) nor implemented its proposals to undertake cooperative trust-building activities. The resumption of negotiations between China and ASEAN after a hiatus of a
decade holds out promise for reinvigorating cooperative activities under the DOC. Multilaterally, existing mechanisms and procedures already exist to promote operational safety among regional navies; a new arrangement is
unnecessary. The United States, China, and all ASEAN members with the exception of Laos and Burma are members of the Western Pacific Naval Symposium (WPNS). Founded in 1988, WPNS brings regional naval leaders together
biennially to discuss maritime security. In 2000, it produced the Code for Unalerted Encounters at Sea (CUES), which includes safety measures and procedures and means to facilitate communication when ships and aircraft make
contact. There are also other mechanisms available such as the International Maritime Organization's Regulations for Preventing Collisions at Sea (COLREGS) and the International Civil Aviation Organization's rules of the air. In
addition, regional navies could cooperate in sea environment protection, scientific research at sea, search and rescue activities, and mitigation of damage caused by natural calamities. The creation of new dialogue mechanisms may
also be worth consideration. A South China Sea Coast Guard Forum, modeled after the North Pacific Coast Guard Forum, which cooperates on a multitude of maritime security and legal issues, could enhance cooperation through
information sharing and knowledge of best practices. The creation of a South China Sea information-sharing center would also provide a platform to improve awareness and communication between relevant parties. The informationsharing center could also serve as an accountability mechanism if states are required to document any incidents and present them to the center. Advocate Joint Development/Multilateral Economic Cooperation Resource cooperation is
another preventive option that is underutilized by claimants in the South China Sea. Joint development of petroleum resources, for example, could reduce tensions between China and Vietnam, and between China and the Philippines,
on issues related to energy security and access to hydrocarbon resources. Such development could be modeled on one of the many joint development arrangements that exist in the South and East China seas. Parties could also
cooperate on increasing the use of alternative energy sources in order to reduce reliance on hydrocarbons. Shared concerns about declining fish stocks in the South China Sea suggest the utility of cooperation to promote conservation
and sustainable development. Establishing a joint fisheries committee among claimants could prove useful. Fishing agreements between China and its neighbors are already in place that could be expanded into disputed areas to
encourage greater cooperation .
Clearly Convey U.S. Commitments The United States should avoid inadvertently
26
encouraging the claimants to engage in confrontational behavior. For example, Secretary of State Hillary Clinton's reference in
November 2011 to the South China Sea as the West Philippine Sea could have unintended consequences such as emboldening Manila to
antagonize China rather than it seeking to peacefully settle their differences.
Extinction
Lieven 12 (Anatol, Professor in the War Studies Department – King’s College (London), Senior
Fellow – New America Foundation (Washington), “Avoiding US-China War,” New York Times,
6-12, http://www.nytimes.com/2012/06/13/opinion/avoiding-a-us-china-war.html)
Relations between the United States and China are on a course that
may one day lead to war . This month,
Defense Secretary Leon Panetta announced that by 2020, 60 percent of the U.S. Navy will be deployed in the Pacific. Last November, in
Australia, President Obama announced the establishment of a U.S. military base in that country, and threw down an ideological gauntlet to China
with his statement that the United States will “continue to speak candidly to Beijing about the importance of upholding international norms and
respecting the universal human rights of the Chinese people.” The dangers inherent in present developments in American, Chinese and regional
policies are set out in “The China Choice: Why America Should Share Power,” an important forthcoming book by the Australian international
affairs expert Hugh White. As he writes, “Washington and Beijing are already sliding toward rivalry by default.” To escape this, White makes a
strong argument for a “concert of powers” in Asia, as the best — and perhaps only — way that this looming confrontation can be avoided. The
economic basis of such a U.S.-China agreement is indeed already in place. The danger of conflict does not stem from a Chinese desire for global
leadership. Outside East Asia, Beijing is sticking to a very cautious policy, centered on commercial advantage without military components, in
part because Chinese leaders realize that it would take decades and colossal naval expenditure to allow them to mount a global challenge to the
United States, and that even then they would almost certainly fail. In East Asia, things are very different. For most of its history, China has
dominated the region. When it becomes the largest economy on earth, it will certainly seek to do so. While China cannot build up naval
forces to challenge the United States in distant oceans, it would be very surprising if in future it will not be able to
generate missile and air forces sufficient to deny the U.S. Navy access to the seas around China . Moreover, China is
engaged in territorial disputes with other states in the region over island groups — disputes in which Chinese popular
nationalist sentiments have become heavily engaged. With communism dead, the Chinese administration has relied very heavily —
and successfully — on nationalism as an ideological support for its rule. The problem is that if clashes erupt over these
islands, Beijing may find itself in a position where it cannot compromise
without severe damage to its
domestic legitimacy — very much the position of the European great powers in 1914. In these disputes, Chinese nationalism collides
with other nationalisms — particularly that of Vietnam, which embodies strong historical resentments. The hostility to China of Vietnam
and most of the other regional states is at once America’s greatest asset and greatest danger. It means that most of China’s neighbors
want the United States to remain militarily present in the region. As White argues, even if the United States were to withdraw, it
is highly unlikely that these countries would submit meekly to Chinese hegemony. But if the United States were to commit itself to a military
alliance with these countries against China, Washington would risk embroiling America in their territorial disputes. In the event of a military
clash between Vietnam and China, Washington would be faced with the choice of either holding aloof and seeing its credibility as an ally
destroyed, or fighting China. Neither the United States nor China would “win” the resulting war outright, but they would
certainly inflict
catastrophic damage on each other and on the world economy. If the conflict escalated into a
nuclear exchange , modern civilization would be wrecked . Even a prolonged period of military and
strategic rivalry with an economically mighty China will gravely weaken America’s global position . Indeed, U.S.
overstretch is already apparent — for example in Washington’s neglect of the crumbling states of Central America.
Independently – US-China clean tech cooperation solves warming
Lieberthal and Sandalow 9 (Kenneth, Visiting Fellow – Brookings Institution, Professor –
University of Michigan, and David, Senior Fellow – The Brookings Institution, January,
http://www.brookings.edu/~/media/research/files/reports/2009/1/climate%20change%20liebertha
l%20sandalow/01_climate_change_lieberthal_sandalow)
Climate change is an epic threat. Concentrations of greenhouse gases in the atmosphere are higher
than at any time in human history and rising sharply. Predicted consequences include sea-level rise,
more severe storms, more intense droughts and floods, forest loss and the spread of tropical disease. Each of
27
these phenomena is already occurring. Every year of delay in reducing greenhouse gas emissions puts the
planet at greater risk. The United States and China play central roles in global warming. During the past
century, the United States emitted more greenhouse gases than any other country—a fact often noted,
since carbon dioxide, the leading greenhouse gas, remains in the atmosphere for roughly 100 years. However, in 2007, China may have
surpassed the United States as the world’s top annual emitter of carbon dioxide. 1 Together, the two
countries are responsible for over 40% of the greenhouse gases released into the atmosphere each
year. For the world to meet the challenge of global warming, the United States and China must
each make the transition to a low-carbon economy. Far-reaching changes will be needed. To date, however, each
nation has used the other as one reason not do to more. Enormous benefits would be possible if
this dynamic were replaced with mutual understanding and joint efforts on a large scale. Yet cooperation will not be easy.
The U.S. and China are separated by different histories, different cultures, and different
perspectives. Opportunities for collaboration in fighting climate change and promoting clean energy are plentiful, but moving forward at
the scale needed will require high-level political support in two very different societies and systems that have considerable suspicion of the other.
The time for large-scale U.S.China cooperation on climate change and clean energy is now. Unless both countries change
course soon, ongoing investments in 20th century technologies will commit the world as a whole
to dangerous levels of greenhouse gases in the atmosphere in the decades ahead. Recent political and
technological developments make the benefits of such cooperation especially compelling.
Furthermore, thirty years after normalization and with the start of a new administration in the United States, the U.S. China
relationship is ready to move to a new stage. This new stage will initiate full bilateral
consultation and cooperation where possible on the most critical global issues of the era. Climate change and clean
energy are at the top of the list. This “new stage” does not envision a U.S.-China condominium or alliance. Any U.S.-China
This report identifies major barriers to cooperation and recommends ways to overcome them.
agreements must be supplements to—not substitutes for—other relationships and obligations. If handled properly, such agreements will increase
bilateral and global capacities to manage critical world challenges. The
major failing in U.S.-China relations to date is
that, despite much progress over the past 30 years, mutual distrust over each other’s long-term intentions
remains deep—and perhaps has even grown in recent years. By making active cooperation on critical global
issues a centerpiece of the relationship, both countries’ governments can increase trust over longterm intentions and thereby reduce the chances of slipping into mutual antagonism over the coming 1020 years. In particular, U.S.-China cooperation can make each side less inclined to point to the other as a
reason to do less at home to fight global warming. It can also contribute to the success of
multilateral climate change negotiations. Having the U.S. and China successfully manage issues that
have divided industrialized and developing countries in the global climate change negotiations can help shape acceptable
multilateral climate change agreements for the post-Kyoto period. Finally, U.S.-China cooperation on
climate change and clean energy can also help each country enhance its energy security and
pursue a sustainable economic path that will create jobs and promote economic recovery.
Extinction
Mazo 10 (Jeffrey Mazo – PhD in Paleoclimatology from UCLA, Managing Editor, Survival
and Research Fellow for Environmental Security and Science Policy at the International Institute
for Strategic Studies in London, 3-2010, “Climate Conflict: How global warming threatens
security and what to do about it,” pg. 122)
The best estimates for global warming to the end of the century range from 2.5-4.~C above pre-industrial levels, depending
on the scenario. Even in the best-case scenario, the low end of the likely range is 1 .goC, and in the worst 'business as usual'
28
projections, which actual emissions have been matching, the range of likely warming runs from 3.1--7.1°C. Even
keeping emissions at
constant 2000 levels (which have already been exceeded), global temperature would still be expected to reach 1.2°C (O'9""1.5°C)above preindustrial levels by the end of the century."
Without early and severe reductions in emissions , the effects of
climate change in the second half of the twenty-first century are likely to be catastrophic for the stability and
security of countries in the developing world - not to mention the associated human tragedy. Climate change could even
undermine the strength and stability of emerging and advanced economies, beyond the knock-on effects on security
of widespread state failure and collapse in developing countries.' And although they have been condemned as melodramatic and
alarmist, many informed observers believe that unmitigated climate change beyond the end of the century could pose
an existential threat to civilisation ." What is certain is that there is no precedent in human experience for such rapid change
or such climatic conditions, and even in the best case adaptation to these extremes would mean profound social, cultural and political changes.
29
Offshore Advantage
30
Economy
31
Econ Outweighs – Probability
Probability –– conflict now is highly likely given other economic stressors
Mootry 9 (Primus, B.A. Northern Illinois University “Americans likely to face more difficult
times” – The Herald Bulletin,
http://www.theheraldbulletin.com/columns/local_story_282184703.html?keyword=secondarysto
ry)
These are difficult times. The direct and indirect costs associated with the war on Iraq have
nearly wrecked our economy. The recent $700 billion bailout, bank failures, and the failure of
many small and large businesses across the nation will take years — perhaps decades — to
surmount. Along with these rampant business failures, we have seen unemployment rates
skyrocket, record numbers of home foreclosures, an explosion of uninsured Americans, and
other economic woes that together have politicians now openly willing to mention the "D" word:
Depression. These are difficult days. We have seen our international reputation sink to all time
lows. We have seen great natural disasters such as hurricanes Ike and Katrina leaving hundreds
of thousands of citizens stripped of all they own or permanently dislocated. In all my years, I
have never seen a time such as this. To make matters worse, we are witnessing a resurgence of
animosities between the United States and Russia, as well as the rapid growth of India and
China. As to the growth of these two huge countries, the problem for us is that they are
demanding more and more oil — millions of barrels more each week — and there is not much
we can say or do about it. In the meantime, if America does not get the oil it needs, our entire
economy will grind to a halt. In short, the challenges we face are complex and enormous.
Incidentally, one of the factors that makes this time unlike any other in history is the potential
for worldwide nuclear conflict . There has never been a time in the long history of man
when, through his own technologies — and his arrogance — he can destroy the planet. Given the
tensions around the world, a mere spark could lead to global conflagration.[This evidence has
been gender paraphrased].
32
Econ Collapse = War
Econ decline causes nuke war
Harris and Burrows 9 Mathew, PhD European History @ Cambridge, counselor in the
National Intelligence Council (NIC) and Jennifer is a member of the NIC’s Long Range Analysis
Unit “Revisiting the Future: Geopolitical Effects of the Financial Crisis”
http://www.ciaonet.org/journals/twq/v32i2/f_0016178_13952.pdf Increased Potential for Global
Conflict
Of course, the report encompasses more than economics and indeed believes the future is likely to be the result of a number of intersecting and interlocking forces. With so many
possible permutations of outcomes, each with ample Revisiting the Future opportunity for unintended consequences, there is a growing sense of insecurity. Even so,
history
may be more instructive than ever. While we continue to believe that the Great Depression is not likely to be repeated, the
lessons to be drawn from that period include the harmful effects on fledgling democracies and
multiethnic societies (think Central Europe in 1920s and 1930s) and on the
sustainability of multilateral institutions (think League of Nations in the same period). There is no reason to
think that this would not be true in the twenty–first as much as in the twentieth
century. For that reason, the ways in which the potential for greater conflict could grow would seem to be even more apt in
a constantly volatile economic environment as they would be if change would be steadier. In surveying those risks, the report stressed
the likelihood that terrorism and nonproliferation will remain priorities even as resource issues move up on the international agenda. Terrorism’s appeal will
decline if economic growth continues in the Middle East and youth unemployment is
reduced. For those terrorist groups that remain active in 2025, however, the diffusion of technologies and scientific knowledge will place some of the world’s most dangerous
capabilities within their reach. Terrorist groups in 2025 will likely be a combination of descendants of long established groups_inheriting organizational
structures, command and control processes, and training procedures necessary to conduct sophisticated attacks_and newly emergent collections of the angry and disenfranchised that
become self–radicalized, particularly in the absence of economic outlets that would
become narrower in an economic downturn. The most dangerous casualty of any
economically–induced drawdown of U.S. military presence would almost certainly be the
Middle East. Although Iran’s acquisition of nuclear weapons is not inevitable, worries about a nuclear–armed Iran could lead states in
the region to develop new security arrangements with external powers, acquire
additional weapons, and consider pursuing their own nuclear ambitions. It is not clear that the type of
stable deterrent relationship that existed between the great powers for most of the Cold War would emerge naturally in the Middle East with a nuclear Iran. Episodes of low intensity
conflict and terrorism taking place under a nuclear umbrella could lead to an unintended escalation and broader
conflict if clear red lines between those states involved are not well established. The close proximity of potential nuclear
rivals combined with underdeveloped surveillance capabilities and mobile dual–capable Iranian missile systems also will produce inherent
difficulties in achieving reliable indications and warning of an impending nuclear attack. The lack of strategic depth in neighboring states like Israel, short
warning and missile flight times, and uncertainty of Iranian intentions may place more focus on
preemption rather than defense, potentially leading to escalating crises. 36 Types of conflict that the world continues to experience,
such as over resources, could reemerge, particularly if protectionism grows and there is a resort to
neo–mercantilist practices. Perceptions of renewed energy scarcity will drive countries to take actions to assure their future access to energy
supplies. In the worst case, this could result in interstate conflicts if government leaders deem assured
access to energy resources, for example, to be essential for maintaining domestic stability and the survival of their
regime. Even actions short of war, however, will have important geopolitical implications. Maritime security concerns are providing a rationale for naval buildups and
modernization efforts, such as China’s and India’s development of blue water naval capabilities. If the fiscal stimulus focus for these countries
indeed turns inward, one of the most obvious funding targets may be military. Buildup
of regional naval capabilities could lead to increased tensions, rivalries, and
counterbalancing moves, but it also will create opportunities for multinational cooperation in protecting critical sea lanes. With water also
33
becoming scarcer in Asia and the Middle East, cooperation to manage changing water
resources is likely to be increasingly difficult both within and between states in a more
dog–eat–dog world.
Economic crises cause states to “underbalance” against foreign threats –
political fragmentation, inward focus and prioritizing growth encourage
aggressive revisionism –escalating miscalculated conflicts
Royal 10 (Jedediah, Director of Cooperative Threat Reduction at the US Department of
Defense, MPhil from the University of New South Wales, Australian Defence Force Academy,
“Economic Integration, Economic Signalling, and the Problem of Economic Crises,” in
Economics of War and Peace: Economic, Legal, and Political Perspectives, Emerald Group
Publishing Limited, p. 215-218)
war is costly and risky’ so rational states should have incentives to
locate negotiated settlements that all would prefer to the gamble of war' (Eeatoli. 1995). However, states
are not always able to find negotiated settlements, and inter-state war doe s occur , often because states are uncertain
about the private information of other states, such as resolve and capabilities, which can
lead to miscalculation , escalation and conflict . Costly signaling, including through the use of economic costly
The rationalist theory of war suggests that ‘
signals as described above,
is a means of overcoming uncertainty . However, economic costly signalling theorists have not described
under what conditions economic costly signals are useful for settling disputes short of the use of force. For example, how useful is signalling among divergent types of
political systems (autocratic and democratic), economic systems (capitalist and socialist) and dependency levels (asymmetric and co-dependent)? Each of these
economic crises
have a dichotomous effect on the utility of economic costly signals. On the one hand, crises decrease
the willingness of states to undertake economic costly signals because they are relatively
more costly during crises. On the other hand, the very fact that they are more costly should increase the efficacy of such signals should they be
used. However, the potential for states to 'underbalance' against foreign threats , including by
declining to send economic costly signals, also increases as a result of economic crises. This
conditions are worthy of further study. This section considers the impact of economic crises on the practicality of ECST. I propose that
tendency undermines the practical utility of ECST during and following economic crises. As economic growth becomes scarce, its value increases to states and their
societies. Negative economic shocks, therefore, increase the costs of economic costly signals, because those signals further undercut the prospects for economic
a state that enjoys strong economic stability can
accept economic (trade and financial) costs vis-a-vis a potential adversary with less relative
repercussion than an economically weakened state. At times of general economic growth,
accepting some economic costs for the sake of national security is a more palatable policy
adjustment than during times of economic weakness. Along with increasing economic (monetary) costs, the
political costs of economic costly signals also increase as a result of economic crises.
Economic stability is a key public good for which leaders of states, particularly in open
societies, are held responsible. Given that leaders desire to retain power, and given that leaders consider their political
survivability when crafting foreign policies (Bueno de Mesquita. Smith. Siverson. & Morrow. 2003). leaders are thus unlikely
voluntarily to undermine economic recovery during and following economic crises. In other words, domestic political interests in
economic growth are relatively stronger during an economic crisis, leading to a greater
probability that a political leader would be punished by an electorate or selectorate for
undermining foreign trade and financial linkages that promote economic growth." This problem of
increased costs ought to be particularly acute for states that increase their role in the economy as a mechanism of supporting economic recovery from a crisis. That
growth at a time when it is scarce. A corollary of this argument would be that
34
is, governments have a strong interest in immediate stabilisation of the domestic economy
during a crisis. They may undertake interventionist policies such as economic stimulus packages, bailouts for vulnerable industries or even nationalisation
of companies that are particularly important for the country's overall economic health. As a result, the involvement of the state in commerce, trade and financial flows
tends to increase during economic crises as it takes a more activist role in directing the economy's recovery. In the most recent economic crisis of 2007-2009, French
President Nicholas Sarkozy went so far to announce that 'laissez-faire is dead', an emotive claim that can be attributed to political posturing rather than historical
clairvoyance. Nevertheless, it does poignantly convey how an economic crisis can draw governments into new levels of engagement and commitment in the private
The increasing government role in the economy can lead to a blending of national and
private sector interests: governments want to protect their investments. The problem for economic
signalling is that states begin to act on this new set of interests in their foreign policies. The government is
incentivised to ensure public funds are not lost, reducing its willingness to allow the very industries it has
sector.
propped up to suffer for the sake of foreign policy posturing. The result is a further
internal constraining of a state's capacity to undertake economic costly signals. The link between
changes in the amount of a government’s intervention in its domestic economy and changes in its foreign policy is an area worthy for further study in the economic-
economic crises increase the costs of signalling can be observed
among the broader international audience. Where many states depend on a single system for their economic well-being, the costs
of any one state signalling within that system impact the many. In periods of economic health, a costly move by one
state would likely have little impact on the integrity of the system. However, during an
economic crisis when the entire system is under duress, adverse economic moves by those relatively important to the functioning of
the entire system could be interpreted by third-party states as undermining their own economic
well-being. This external constraint is thus manifested as diplomatic audience costs. Indeed, one could posit that the aggregate level of importance of an
security literature. Yet another perspective of how
interdependent dyad to crisis recovery would be inversely related to their willingness to take punitive economic measures. Pressure by third-party states on the dyad to
support the integrity of the system through continued integration would be at a maximum during a period of economic crisis. Although states may be less inclined to
undertake economic costly signals, the simple fact that they are so costly during an economic crisis should indicate that, if undertaken, the signal itself will be more
credible and thus more effective. A receiving (targeted) state that recognises the severity of the cost assumed by the sending state ought to be more convinced of the
genuine nature of the signal. The efficacy of the signal is made stronger by the elevated cost. One can therefore come to the conclusion that economic crises strengthen
There is, however, another trend at play. Economic crises tend
to fragment regimes and divide polities . A decrease in cohesion at the political leadership
level and at the electorate level reduces the ability of the state to coalesce a sufficiently strong political
base required to undertake costly balancing measures such as economic costly signals.
Schweller (2006) builds on earlier studies (see. e.g., Christensen. I996: Snyder. 2000) that link political fragmentation with
decisions not to balance against rising threats or to balance only in minimal and ineffective
ways to demonstrate a tendency for states to 'underbalance'. Where political and social cohesion is strong, states are
more likely to balance against rising threats in effective and costly ways. However, 'unstable and fragmented regimes that rule
over divided polities will be significantly constrained in their ability to adapt to systemic
incentives: they will be least likely to enact bold and costly policies even when their nations
the conditions for economic costly signals to be successful.
survival is at stake and they are needed most' (Schweller. 2006. p. 130). Papayoanou (1997) observes
this tendency in British, French and American behaviour towards Germany in the 1930s.
The Great Depression led states to become inward-looking , prioritising domestic economic
interests above external national security threats . The inherent weakness in the disparate
political outlooks that coincided with the economic crisis hindered their ability to balance
effectively against Germany. Indeed, in the case of Great Britain, Papayoanou indicates that even though the political
elite wanted to break Britain's strong economic ties with Germany for fear of 'sleeping with
the enemy', a weak political base and relatively stronger interests in domestic economic
growth bound the hands of the British government. Great Britain thus elected not to
35
undertake economic costly signals despite the presence of a clear and growing threat .
Papayoanou (1997, pp. l14-ll5) concludes that when 'status quo powers have strong economic links with
threatening powers, weaker balancing postures and conciliatory policies by status quo
powers, and aggression by aspiring revisionist powers , are more likely'. Underbalancing (in
this case, by not sending economic costly signals) during economic crises is consistent with a
growing body of literature on the influence of domestic 'veto players' on the decision to use
force. Veto players are those vested interests within an electorate or selectorate that have the authority to resist change in status quo policies. The
tendency to under- balance is disproportionately strong in states with large numbers of
veto players, a situation more prevalent in democracies than autocracies. Where relatively higher
numbers of veto players exist within a polity, the opportunity to change status quo economic and trade policies, for example, through costly signaling, decreases
(Tsebelis. 2002; Mansfield. Milner. & Pevehouse. 2008; St. Marie. Hansen. & Tuman. 2006: Maclntyre. 200l; Walsh. 2007). In summary, I hypothesise that
the
occurrence of an economic crisis increases the cost associated with ECST and thus
decreases the willingness of states to send economic costly signals. Although the fact that increased costs should
make the signal more effective, scholarship on underbalancing theory and veto player theory provide rationale for why economic crises may
inhibit the use of economic costly signals, even in the face of a direct threat .7
36
OCS K2 Economy
Key to the economy – shipbuilding, labor, jobs, and taxes
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
Offshore oil and gas production has a significant effect on local onshore economies as well
as the national economy. There are broadly three “phases” of development that contribute
to state economic growth: (1) the initial exploration and development of offshore facilities;
(2) the extraction of oil and gas resources; and (3) refining crude oil into finished petroleum
products. Industries supporting those phases are most evident in the sections of the Gulf of Mexico that are currently open to offshore
drilling. For example, the U.S. shipbuilding industry — based largely in the Gulf region – benefits significantly
from initial offshore oil exploration efforts .9 Exploration and development also requires
specialized exploration and drilling vessels, floating drilling rigs, and miles and miles of
steel pipe, as well as highly educated and specialized labor to staff the efforts. The onshore
support does not end with production. A recent report prepared for the U.S. Department of Energy indicates that the
Louisiana economy is “highly dependent on a wide variety of industries that depend on offshore oil and gas production”10 and that offshore
production supports onshore production in the chemicals platform fabrication, drilling services, transportation, and gas
processing.11 Fleets of helicopters and U.S. built vessels also supply offshore facilities with a wide range of industrial
and consumer goods, from industrial spare parts to groceries. As explained in Section IV.G, however, the distance between offshore facilities and
onshore communities can affect the relative intensity of the local economic effects. The economic effects in the refining phase are even more
diffuse than the effects for the two preceding phases. Although significant capacity is located in California, Illinois, New Jersey, Louisiana,
Pennsylvania, Texas, and Washington, additional U.S. refining capacity is spread widely around the country.12 As a result, refinery
jobs,
wages, and tax revenues are even more likely to extend into other areas of the country,
including non-coastal states like Illinois.
Benefits spillover nationwide – solve fiscal crises
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
Figure 1 illustrates the percent of mortgages ninety or more days delinquent by county in the third quarter 2008. It is easy to see
that most of the hard-hit regions are in the coastal states, including especially those close to
restricted OCS resources. States like California and Florida, especially hard hit with mortgage foreclosures
and facing fiscal crises resulting from decreased property, sales, and income taxes, could
benefit dramatically from OCS development. Even interior states like Illinois,
Pennsylvania, and Indiana stand to benefit, however, as those are home to many refining
and chemical industries that ride the economic coattails of oil exploration and extraction. In
summary, the benefits of OCS development, while particularly focused on coastal states, are to be found nationwide.
37
The rest of this paper is devoted to estimating the magnitude of those benefits to provide valuable economic estimates to be used in rational
decision making on the costs and benefits of OCS development.
The OCS contains substantial natural gas deposits
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
Significant oil and gas resources lie under the U.S. Outer Continental Shelf. According to the EIA,
the OCS (including Alaskan OCS Planning Areas) contains approximately 86 billion barrels of recoverable oil and
approximately 420 trillion cubic feet of recoverable natural gas.13 As noted by the White House,
however, the OCS estimates are conservative.14Of the total OCS resources, a significant portion was unavailable to
exploration until recently. Specifically, Presidential and Congressional mandates banned production
from OCS Planning Areas covering approximately 18 billion barrels of recoverable oil and
77.61 trillion cubic feet of recoverable natural gas.15 These bans covered approximately 31 percent of
the total recoverable OCS oil resources and 25 percent of the total recoverable OCS natural gas
resources. Figure 2, which was originally produced by the EIA, visually demonstrates the areas (in blue) that were previously unavailable.
As noted previously, the estimated resources illustrated in Figure 2 should be considered very conservative
lower bounds of recoverable energy resources.
Key to economy – careers, tax revenues, and GDP
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
permanently lifting the OCS moratoria would produce broad economic
benefits. Those benefits are analyzed on both short and long-term bases. Short-run effects are represented as expected annual effects during
The estimates suggest that
the first years of the investment (pre-production) phase; Long-run effects are represented as expected annual effects during the production phase.
increased offshore
investment and production would support hundreds of thousands of new careers and
provide billions of dollars in new wages and tax revenues. By the present estimates, increased
production is likely to contribute an additional 0.5 percent of GDP in immediate new
economic activity each year and will ultimately contribute more than 2 percent of GDP
each year for thirty or more years of production. That magnitude of economic growth is
expected to contribute federal and state and local tax revenue from production equivalent to approximately
$350 per person over the age of eighteen per year over a similar time horizon. The total incremental contribution of
increased OCS Planning Area production to GDP is more than $8 trillion (in current dollars), and
total tax benefits amount to some $2.2 trillion. Total royalty revenues amount to over $400 billion. Importantly,
those benefits would be realized without any increase in direct government spending. Rather,
increased OCS output would refill national, state, and local government coffers—currently
depleted by the real estate and credit crises —without additional government outlays. The effects of such a stimulus are
A summary of the estimated short and long-run effects is presented in Table 1. Summarizing the results,
particularly attractive in the face of a severe economic downturn.
38
Key to energy independence
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
Maintaining energy independence by increasing U.S. offshore oil and natural gas
production has long been recognized as a national imperative. In 2006, the U.S. Minerals
Management Service (MMS) reported to Congress that “much of the growth in the
Nation’s energy demand will have to be met by OCS…if further increases of imported
supplies are to be avoided.”2MMS also estimated that “OCS oil production could account
for as much as 40 percent of domestic oil production by 2010.”3 Furthermore, the MMS indicated
that the OCS natural gas resources would become an essential source of energy as imports from
other countries — particularly Canada—decline.
Key to economy – shipbuilding, steel, banks, and retail
Mason 9 [Joseph R. Mason, Ph D, UNIVERSITY OF ILLINOIS, School of Finances, 1996 MS, UNIVERSITY OF ILLINOIS, 1992 BS,
ARIZONA STATE UNIVERSITY, 1990, testified before the Senate Judiciary Committee, the Senate Committee on Banking, Housing, and
Urban Affairs, the House of Representatives Financial Services Committee, the European Parliament, and the Federal Reserve Board and advised
the Congressional Joint Economic Committee, Government Accountability Office (GAO), Federal Deposit Insurance Corporation (FDIC),
Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Richmond, and Public Company Accounting Oversight Board (PCAOB) on
structured finance, “The Economic Contribution of Increased Offshore Oil Exploration and Production to Regional and National Economies”
Feb. 2009; http://www.americanenergyalliance.org/docs/images/aea_offshore_updated_final.pdf\\ML]
Onshore state and local economies benefit from the development of OCS resources by
providing goods and services to offshore oil and gas extraction sites. Onshore communities provide all
manner of goods and services required by offshore oil and gas extraction. A variety of industries are involved in this
effort: shipbuilders provide exploration vessels, permanent and movable platforms, and
resupply vessels; steelworkers fashion the drilling machinery and specialized pipes
required for offshore resource extraction; accountants and bankers provide financial
services; and other onshore employees provide groceries, transportation, refining, and
other duties. These onshore jobs, in turn, support other jobs and other industries (such as
retail and hospitality establishments).
OCS Gas helps the economy in many ways
Gross 13
(Matt Gross, December 2013, Quest Offshore, “The Economic Benefits of Increasing U.S.
Access to Offshore Oil and Natural Gas Resources in the Atlantic”)
This report quantifies the significant potential benefits to the U.S. economy that would stem from
opening the Atlantic outer continental shelf to oil and natural gas exploration. Federal offshore
lease sales under existing U.S. law would be expected to lead to high levels of offshore oil and
natural gas activity. This activity would require large amounts of investment and operational
39
spending by oil and gas operators, an estimated $195 billion cumulative between 2017 and 2035,
which would be primarily spent inside the U.S. and the Atlantic coast states. If seismic activity
were to begin in 2017 and lease sales in 2018, first production could be expected as early as
2026. By 2035, offshore oil and natural gas development could produce an incremental 1.3
million barrels of oil equivalent per day (MMboe/d), generate nearly 280,000 jobs, contribute up
to $23.5 billion per year to the U.S. economy, and generate $51 billion in cumulative
government revenue (Table 1), Most of the benefits would be accrued to states along the east
coast (Table 2) but the economic impacts would be felt throughout the U.S. The amount of
revenue accrued to state governments would be dependent on legislated federal/state sharing
agreements. The offshore oil and natural gas industry within the United States is a significant
contributor to employment, the national economy, government revenues, and domestic energy
production. Current offshore oil and gas production in the U.S. is essentially limited to the
Central, Western and a small amount of the eastern Gulf of Mexico with limited additional
legacy production off Alaska and California. Total offshore oil and natural gas production in
federal waters was a combined 1.87 million barrels of oil equivalent per day as of June of 2013
or 9 percent of U.S. production. This report constructs a scenario of oil and natural gas
development in the Atlantic OCS, based on the resource potential of the area, geologic analogs,
and the full value chain of oil and natural gas development and production. It quantifies the
capital and other investments projected to be undertaken by the oil and natural gas industry,
identifies linkages to the oil and gas supply chain and supporting industries at both the state and
national levels, estimates both job creation and contributions to economies associated with oil
and natural gas development, as well as government revenues due to lease bids, rents and
production royalties. The report relies on Quest Offshore Resources, Inc. (Quest) proprietary
database3 on the offshore oil and natural gas supply chain.
Atlantic OCS development would lead to an increase in domestic energy production. The first oil
and natural gas production in the Atlantic OCS is projected to start in 2026, given the scenarios’
leasing assumptions. Initial annual production would be just over 6 thousand barrels of oil
equivalent per day (BOED); by the second year production is projected to increase to over 65
thousand BOED. Production is projected to reach 1.34 million BOED by 2035, approximately 40
percent of which is expected to be oil at 550 thousand BOED, and 60 percent natural gas at 790
thousand barrels of oil equivalent (or 4.6 billion cubic feet) per day. Production from deepwater
projects is expected to account for 75 percent of production in 2035, compared to 25 percent of
production for shallow water fields. Although the impacts of Atlantic OCS oil and natural gas
development would be felt nationwide, the majority of the employment, economic, and revenue
effects of increased access benefits would be expected to go to the states along the east coast.
Although some states such as the Carolinas, Virginia, Massachusetts, New York and Maine are
expected to see larger benefits, the effects of offshore oil and natural gas activity are expected to
be felt all along the Atlantic coast. Each state is expected to see annual spending by the industry
of over $100 million dollars per year by 2028, with spending continuing to increase on average
through 2035. Each state is also expected to see between three thousand five hundred and 55
thousand jobs created by 2035, and contributions to their economies ranging from $315 million
to over $4 billion per year. Additionally, state governments have the potential to receive large
increases in revenues if state/Federal revenue sharing legislation is enacted. A 37.5 percent
40
sharing agreement would produce cumulative state government revenues of $330 million to $4
billion.
OCS Natural Gas booms US Econ
Leschper 13
(Mary Leschper, December 05 2013, Mary Leschper is a Social Media Analyst for API. Before
joining API, she worked for the U.S. Senate on legislative issues and in a press shop. The People
of America’s Oil and Natural Gas Industry, “Tapping America’s Offshore Energy ‘Gold Mine’”
http://energytomorrow.org/blog/2013/december/dec-5-tapping-americas-offshore-energy-goldmine#sthash.gxsraw0S.dpuf)
America’s vast offshore energy reserves present an opportunity to improve our economy,
increase our energy security and create tens of thousands of jobs. According to a new study,
opening the U.S. Atlantic Outer Continental Shelf (OCS) to offshore oil and natural gas
development could turn that opportunity into reality. API’s Director of Upstream Erik Milito and
the National Ocean Industries Association’s Randall Luthi outlined the study for reporters today.
Milito:
“Oil and natural gas production off our Atlantic coast is a potential gold mine. Developing oil
and natural gas in the Atlantic could put hundreds of thousands of Americans to work, make us
more energy secure, and bring in needed revenue for the government. But none of these benefits
will appear unless the federal government follows pro-development energy policies.”
According to the study, oil and natural gas development in the Atlantic OCS between 2017 and
2035 could:
-
Create nearly 280,000 new jobs along the East Coast and across the country.
Result in an additional $195 billion in new private investment.
Contribute up to $23.5 billion per year to the U.S. economy.
Add 1.3 million barrels of oil equivalent per day to domestic energy production, which is
about 70 percent of current output from the Gulf of Mexico.
Generate $51 billion in new revenue for the government.
For the past five years, the Obama administration has been considering whether to allow seismic
surveying off the Atlantic coast, which would give energy producers better knowledge of actual
resources. Americans stand to benefit if seismic surveying permits are approved and the Atlantic
and other offshore areas that have been kept off-limits are included in the next five-year leasing
program. A decision on Atlantic OCS seismic testing is expected in Spring 2014.
41
OCS vital for the Econ
Hagerty 11
(Curry L. Hagerty, May 06 2011, Specialist in Energy and Natural Resources Policy,
Congressional Research Service,“Outer Continental Shelf Moratoria on Oil and Gas
Development”)
Congress has consistently found that domestic oil and gas development is vital to the nation,
despite debate over the economic feasibility of specific oil and gas projects. The potential for
federal revenue from OCS development drives economic aspects of the drilling debate. At issue
is whether OCS oil and gas production has sufficient fiscal benefits to warrant development, and
if so, what economic factors (in additional to fiscal impacts) affect the size, timing, and location
of OCS development. The economic feasibility of OCS development depends on oil prices,
future projections about oil markets, physical access to development areas, and economic values
assigned to competing ocean uses such as renewable energy development, fishing, tourism, and
conservation, as well as other factors.
The economic feasibility of development options is always based on estimation and forecasts. In
the absence of predictable regulatory directives, it is more difficult to estimate the economic
feasibility of development options. Development proponents contend that the economic
feasibility of development in the Gulf of Mexico and the Arctic, which have substantial proven
oil and gas deposits, is especially unpredictable during a time when DOI is overhauling the
regulatory framework to reorganize subdivisions of the federal bureaucracy for offshore
development.
Global economic factors play a major role in deliberations about OCS drilling activity. At the
end of FY2008, annual moratoria expired amid global economic turmoil and calls for greater
stability in the national economy. From this perspective, economic arguments—specifically
claims that other coastal countries are allowing greater access to offshore resources and that the
United States should not fall behind in the international race to develop offshore resources—
influenced moratorium policy. Economic events are a significant part of how moratoria are
considered as a tool for OCS policy development.
Offshore gas helps struggling economies
Mason 9
( Joseph R. Mason, February 2009, American Energy Alliance, “The Economic Contribution of
Increased Offshore Oil Exploration and Production to Regional and National Economies”)
42
Offshore oil and gas production has a significant effect on local onshore economies as well as the
national economy. There are broadly three “phases” of development that contribute to state
economic growth: (1) the initial exploration and development of offshore facilities; (2) the
extraction of oil and gas resources; and (3) refining crude oil into finished petroleum products.
Industries supporting those phases are most evident in the sections of the Gulf of Mexico that are
currently open to offshore drilling. For example, the U.S. shipbuilding industry — based largely
in the Gulf region – benefits significantly from initial offshore oil exploration efforts.9
Exploration and development also requires specialized exploration and drilling vessels, floating
drilling rigs, and miles and miles of steel pipe, as well as highly educated and specialized labor
to staff the efforts. The onshore support does not end with production. A recent report prepared
for the U.S. Department of Energy indicates that the Louisiana economy is “highly dependent on
a wide variety of industries that depend on offshore oil and gas production” and that offshore
production supports onshore production in the chemicals,
Platform fabrication, drilling services, transportation, and gas processing. Fleets of helicopters
and U.S. built vessels also supply offshore facilities with a wide range of industrial and
consumer goods, from industrial spare parts to groceries. As explained in Section IV.G, however,
the distance between offshore facilities and onshore communities can affect the relative intensity
of the local economic effects. The economic effects in the refining phase are even more diffuse
than the effects for the two preceding phases. Although significant capacity is located in
California, Illinois, New Jersey, Louisiana, Pennsylvania, Texas, and Washington, additional
U.S. refining capacity is spread widely around the country.12 As a result, refinery jobs, wages,
and tax revenues are even more likely to extend into other areas of the country, including noncoastal states like Illinois.
Offshore gas drilling benefits economy through revenue, employment, and
energy production
Guest Offshore 2013 (Quest Offshore Resources Inc., Report prepared for the NOIA, “The Economic
Benefits of Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic” December 2013
[http://www.api.org/~/media/Files/Oil-and-Natural-Gas/Exploration/Offshore/Atlantic-OCS/ExecutiveSummary-Economic-Benefits-of-Increasing-US-Access-to-Atlantic-Offshore-Resources.pdf])
This report quantifies the significant potential benefits to the U.S. economy that would stem
from opening the Atlantic outer continental shelf to oil and natural gas exploration. Federal
offshore lease sales under existing U.S. law would be expected to lead to high levels of offshore
oil and natural gas activity. This activity would require large amounts of investment and
operational spending by oil and gas operators, an estimated $195 billion cumulative
between 2017 and 2035, which would be primarily spent inside the U.S. and the Atlantic
coast states. If seismic activity were to begin in 2017 and lease sales in 2018, first
production could be expected as early as 2026. By 2035, offshore oil and natural gas
development could produce an incremental 1.3 million barrels of oil equivalent per day
(MMboe/d), generate nearly 280,000 jobs, contribute up to $23.5 billion per year to the U.S.
43
economy, and generate $51 billion in cumulative government revenue (Table 1), Most of the
benefits would be accrued to states along the east coast (Table 2) but the economic impacts
would be felt throughout the U.S. The amount of revenue accrued to state governments would
be dependent on legislated federal/state sharing agreements.1The offshore oil and natural gas
industry within the United States is a significant contributor to employment, the national
economy, government revenues, and domestic energy production. Current offshore oil and
gas production in the U.S. is essentially limited to the Central, Western and a small amount
of the eastern Gulf of Mexico with limited additional legacy production off Alaska and
California. Total offshore oil and natural gas production in federal waters was a combined 1.87
million barrels of oil equivalent per day as of June of 2013 or 9 percent of U.S. production.
Approximately 85 percent of acreage in federal offshore waters is inaccessible to offshore
oil and natural gas development,either through lack of federal lease sales or outright
moratoriums. Oil and gas development off the Atlantic coast has been restricted since the
1980’s. Only 51 exploratory wells were drilled in the 1970s and 1980s, mainly in shallow
water. A lease sale off the coast of Virginia was planned for 2011, but was subsequently
canceled. No lease sales in the Atlantic Outer Continental Shelf (OCS) are currently
scheduled. The next five-year plan of OCS lease sales, yet to be released, would start in
2017.
OCS drilling saves economy independently through employment
Guest Offshore 2013 (Quest Offshore Resources Inc., Report prepared for the NOIA, “The Economic
Benefits of Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic” December 2013
[http://www.api.org/~/media/Files/Oil-and-Natural-Gas/Exploration/Offshore/Atlantic-OCS/ExecutiveSummary-Economic-Benefits-of-Increasing-US-Access-to-Atlantic-Offshore-Resources.pdf])
Atlantic OCS oil and natural gas development is expected to lead to significant employment
gains, both along the east coast and nationally. Employment impacts are expected to grow
throughout the forecast period, with total incremental U.S. employment reaching nearly
280 thousand jobs by
2035.4 Total Atlantic coast employment in 2035 is projected to reach over 215 thousand
jobs with employment spread across the region. States outside the region are projected to
see employment gains of nearly 65 thousand jobs in 2035. The largest employment impact
of Atlantic OCS oil and natural gas activity is projected in the Mid-Atlantic states of North
and South Carolina and Virginia. North Atlantic states such as Massachusetts, Maine, and
New York are all also projected to see employment increases of at least 10 thousand jobs by
2035. The share of incremental employment within the Atlantic coast region is anticipated
to steadily grow as the proportion of goods and services that are supplied locally increases.
The resulting impact of Atlantic OCS development upon the economy will be widespread
among industries. Industries which are directly involved in oil and natural gas activities
such as the mining sector (which includes oil and gas development), manufacturing,
professional, scientific, and technical services (engineering), and construction (installation)
are expected to see the largest employment effects with a combined 125 thousand jobs in
44
2035. Of that total, employment in the oil and gas sector is projected to be 45 thousand
jobs. By 2035, the manufacturing sector which includes businesses that manufacture and
fabricate oil and gas equipment, platforms and otherwise produce the goods required to
develop oil and natural gas fields is projected at around 30 thousand jobs, of which over 20
thousand of these jobs are expected in the Atlantic coast states. The professional, scientific,
and technical service sector, which includes engineering employment, is expected to see
employment in excess of 32 thousand additional jobs. Employment in the construction
sector which includes offshore installation employment is projected to be around 19
thousand jobs in 2035. Sectors not directly related to oil and gas development or the supply
chain will also see impacts, mainly due to a general increase of income in the economy.
Retail sector employment is projected to increase by over 20 thousand jobs in 2035 due to
Atlantic OCS development. Health care and social assistance could increase by nearly 19
thousand jobs, administrative and waste management services by over 18 thousand jobs,
food services and drinking places by over 13 thousand jobs, and finance and insurance, and
real estate, rental, and leasing are both projected to see the creation of over 11 thousand
jobs in each sector by 2035.
OCS saves economy, drastically increases GDP
Guest Offshore 2013 (Quest Offshore Resources Inc., Report prepared for the NOIA, “The Economic
Benefits of Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic” December 2013
[http://www.api.org/~/media/Files/Oil-and-Natural-Gas/Exploration/Offshore/Atlantic-OCS/ExecutiveSummary-Economic-Benefits-of-Increasing-US-Access-to-Atlantic-Offshore-Resources.pdf])
Spending by the oil and gas industry, as well as the impact of increased revenues to state
governments is expected to lead to a significant increase of the nation’s GDP. Total
contributions to the economy are projected to be nearly $23.5 billion per year in 2035, with
roughly 75 percent of the total expected impact to occur in Atlantic coast states and 25
percent in the rest of the U.S. The largest contributions to states’ economies are expected to
be seen in the Mid-Atlantic states of North Carolina, South Carolina, and Virginia as well
as North Atlantic states such as Massachusetts, New York and Maine. Atlantic OCS oil and
natural gas development has the potential to significantly increase government revenue from
royalties, bonus bids, and rents on leases, a cumulative $51 billion from 2017 to 2035. Total
government revenues are projected to reach over $12 billion dollars per year in 2035 and
are projected to grow beyond the forecast. The majority of cumulative revenues are from
royalties on produced oil and natural gas at $40 billion, leasing bonus bids are projected to
account for around $9 billion, while rental income from offshore blocks is expected to account
for a cumulative amount of $2 billion. This report assumes that associated government
revenue is split 37.5 percent to the coastal
states and 62.5 percent to the Federal government. This is similar to the arrangement in the
Gulf of Mexico without an associated cap on state government revenue. Actual revenue
proportion going to state governments, if any, would be determined by future legislation.
Combined state revenues for the Atlantic coast states would reach approximately $4.5
45
billion per year by 2035, given that assumption.
Offshore gas development overall good for the economy
Hillegeist 13 — Paul Hillegeist, President & Co-Founder Quest Offshore. BA Economics UT
Austin. Quest serves 500 global energy focused clients, 2013. (“The Economic Benefits of
Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic”, API,
December, 2013, available at http://www.api.org/~/media/Files/Oil-and-NaturalGas/Exploration/Offshore/Atlantic-OCS/Executive-Summary-Economic-Benefits-of-IncreasingUS-Access-to-Atlantic-Offshore-Resources.pdf, accessed on 7/6/14)
By 2035, offshore oil and natural gas development could produce an incremental 1.3 million
barrels of oil equivalent per day (MMboe/d), generate nearly 280,000 jobs, contribute up to
$23.5 billion per year to the U.S. economy, and generate $51 billion in cumulative
government revenue (Table 1), Most of the benefits would be accrued to states along the
east coast (Table 2) but the economic impacts would be felt throughout the U.S. The
amount of revenue accrued to state governments would be dependent on legislated
federal/state sharing agreements.1 The offshore oil and natural gas industry within the
United States is a significant contributor to employment, the national economy,
government revenues, and domestic energy production. Current offshore oil and gas
production in the U.S. is essentially limited to the Central, Western and a small amount of the
eastern Gulf of Mexico with limited additional legacy production off Alaska and California.
Total offshore oil and natural gas production in federal waters was a combined 1.87 million
barrels of oil equivalent per day as of June of 2013 or 9 percent of U.S. production.
46
OCS K2 Shipbuilding
Offshore gas production will boost the ship building industry
Hillegeist 13 — Paul Hillegeist, President & Co-Founder Quest Offshore. BA Economics UT
Austin. Quest serves 500 global energy focused clients, 2013. (“The Economic Benefits of
Increasing U.S. Access to Offshore Oil and Natural Gas Resources in the Atlantic”, API,
December, 2013, available at http://www.api.org/~/media/Files/Oil-and-NaturalGas/Exploration/Offshore/Atlantic-OCS/Economic-Benefits-of-Increasing-US-Access-toOffshore-Oil-and-Natural-Gas-Resources-in-the-Atlantic.pdf, accessed on 7/6/14)
The makeup of Virginia’s economy, as well as the large amount of development activity
projected off its coast is expected to lead to high levels of engineering activity in the state,
with spending projected to reach nearly $400 million dollars a year in 2035. Virginia
possesses a strong marine background, hosting major offshore industry supplier
Oceaneering’s marine service division in Chesapeake, as well as one of the largest dry
docks in the U.S. at Newport News Shipbuilding. Other existing industry suppliers in
Virginia include Bauer Compressors in Norfolk who supplies compression equipment for
use on offshore platforms, PaR Marine Services which provides cargo handling equipment
for offshore vessels and platforms, and Strongwell of Bristol which provides high-tech
building materials used in the construction of floating production units. Virginia
employment due to Atlantic OCS oil and gas exploration and development activities is projected
to reach nearly 25 thousand jobs in 2035, with a direct employment level due to development
activity of nearly nine thousand jobs and an indirect and induced employment level of nearly 16
thousand jobs. (Figure 38) Atlantic OCS oil and natural gas production is also expected to
contribute significant sums to the Virginia state economy. In 2035, the contributions of this
activity are projected to reach nearly $2.2 billion per year. (Figure 39) Potential state government
revenue from offshore development would be dependent on any future legislated revenue sharing
agreements. Under a similar state percentage of revenue sharing as in the Gulf of Mexico at 37.5
percent, Virginia state revenues are projected to reach $400 million per year by 2035 at the end
of the study period, with the cumulative effects on the state budget from 2017 to 2035 projected
to reach nearly $1.9 billion. If a different revenue percentage were enacted, projected state
revenues should be adjusted proportionally. Massachusetts is expected to receive the fourth
highest levels of spending, employment, and gross state product due to offshore oil and natural
gas activity in the Atlantic OCS. Atlantic OCS oil and natural gas activity is expected to lead to
spending of over $1 billion per year in 2035 in Massachusetts. Spending driven by projects due
to the state’s large estimated resource base include operational expenditures (projected to be just
nearly $385 million per year in 2035), drilling spending ($190 million per year in 2035), and
installation spending ($60 million per year). (Figure 40) Massachusetts’ economic position
coupled with the oil and natural gas development activity in areas near to the state are projected
to lead to large engineering spending in the state reaching $194 million per year in 2035. In
2035, spending on manufacturing of SURF and platform equipment is expected to reach over
$160 million per year combined. Massachusetts is home to many suppliers to the offshore oil and
47
natural gas industry such as Aspen Aero Gels based in Northborough who provides high-tech
insulation for subsea pipelines and equipment. The state is also home to such providers of
equipment to the industry as Bluefin Robotics which provides autonomous underwater vehicles,
Lewa pumps which provides chemical injection equipment to offshore platforms, and Azonix
which produces hazardous-area computing equipment for platforms. Massachusetts is expected
to see significant employment due to Atlantic OCS oil and gas exploration and development
activities, with total employment reaching nearly 15 thousand jobs in 2035. Direct employment
due to offshore oil and natural gas exploration and production is projected to be over five
thousand jobs in 2035, with an indirect and induced employment level of nearly 10 thousand jobs
expected in the same year. (Figure 41) Offshore oil and natural gas exploration and production in
the Atlantic OCS is also expected to provide large contributions to the Massachusetts state
economy. In 2035, contributions to the state economy from Atlantic offshore oil and natural gas
exploration and production are projected to reach nearly $1.4 billion per year. (Figure 42) Under
a 37.5 percent revenue sharing agreement, state government revenues for Massachusetts from
bonuses, rents, and royalties are projected to reach $372 million per year in revenue in 2035,
with the cumulative effects on the state budget from 2017 to 2035 projected to be nearly $1.4
billion. If a different revenue percentage were enacted, projected state revenues should be
adjusted proportionally. New York is expected to receive the fifth highest levels of spending,
employment and gross domestic product due to offshore oil and natural gas activity in the
Atlantic OCS. Spending in the state is projected to reach just over $1 billion per year in 2035,
with spending especially focused on services to the offshore oil and gas industry. (Figure 43)
Spending in New York is expected to be driven by engineering and operational
expenditures, with these two categories accounting for around $315 million and $290
million per year respectively, in 2035. Manufacturing and fabrication spending on SURF
equipment and platforms is projected to reach over $150 million in the same year. New
York is home to Hess Corporation, a major offshore oil and gas operator, as well as many
supply chain companies. The companies include Dover Corporation which provides fluid
handling equipment for offshore drilling rigs, ITT Corporation which provides pumps,
valves and other equipment to platforms, FPSOs and drilling rigs and General Maritime
who builds tankers and other ships. Employment in New York due to Atlantic coast
offshore oil and gas production is projected to reach over 12 thousand jobs in 2035. Direct
employment due to offshore oil and natural gas exploration and production is expected to
reach nearly five thousand jobs in 2035, with an indirect and induced employment level of
over seven thousand jobs expected in the same year. (Figure 44) In 2035, contributions to the
state economy from Atlantic offshore oil and natural gas exploration and production in New
York are projected to reach over $1.2 billion per year. (Figure 45) Governmental revenues
collected under a 37.5 percent state/federal revenue sharing agreement would be expected to
create $205 million per year in new revenues for the state of New York in 2035, with cumulative
revenues from 2017 to 2035 projected to be nearly $870 million. If a different revenue
percentage were enacted, projected state revenues should be adjusted proportionally.
48
Shipbuilding K2 Economy
Shipbuilding key to the economy
MARAD 13 — Maritime Administration, an agency of the United States Department of
Transportation that maintains the National Defense Reserve Fleet (NDRF) as a ready source of ships for
use during national emergencies, and assists the NDRF in fulfilling its role as the nation's fourth arm of
defense, logistically supporting the military when needed, 2014. (“Importance of the U.S. Shipbuilding
and Repairing Industry”, USDOT, May 30, 2013, available at
http://www.marad.dot.gov/documents/MARAD_Econ_Study_Final_Report_2013.pdf, accessed
on 7/10/14)
In 2011, on a national basis, the U.S. shipbuilding and repairing industry directly provided
107,240 jobs (see Table 4). Including direct, indirect, and induced impacts, approximately
402,010 jobs were associated with the industry. Total labor income associated with all
direct, indirect, and induced jobs was $23.9 billion. The industry directly and indirectly
was associated with $36.0 billion in GDP in 2011. By segment, the majority of the direct
economic activity is in the primary industry code, shipbuilding and repairing (NAICS
336611), which was responsible for 97,450 jobs of the overall 107,240 direct jobs, paid $7.3
billion in labor income, and generated $9.2 billion in GDP in 2011. Routine ship
maintenance and repair activities (part of NAICS 488390) directly accounted for 9,790 jobs,
$574 million in labor income, and $593 million in GDP (see Table 5). Most of the indirect and
induced economic impact of the industry is associated with the industry’s ongoing operations,
rather than its capital expenditures (see Table 6). The largest amount of indirect and induced
economic activity associated with the industry is in the services sector. Other signficant indirect
and induced activities occur in manufacturing; finance, insurance and real estate; and wholesale
and retail trade. Considering the indirect and induced impacts, each direct job in the U.S.
shipbuilding and repairing industry is associated with another 2.7 jobs in other parts of the
national economy; each dollar of direct labor income and GDP is associated with another
$2.03 in labor income and $2.66 in GDP, respectively, outside of the shipbuilding and
repairing industry .
Shipbuilding benefits all 50 states
SIU 13 — Seafarers International Union, an organization of 12 autonomous labor unions of mariners,
fishermen and boatmen working aboard vessels flagged in the United States or Canada. Michael Sacco
has been its president since 1988. The organization has an estimated 35,498 members and is the largest
maritime labor organization in the United States, represents mariners and boatmen who sail aboard U.S.flagged vessels in deep sea, the Great Lakes, and inland waterways. Membership includes workers in the
deck, steward, and engine departments. SIU members are represented aboard a wide variety of vessels,
including: military support, commercial trade, tugboats, passenger ships, barges, and gaming vessels.
Military support vessels operated by the U.S. Department of Defense's Military Sealift Command (MSC)
provide a key source of jobs for seafarers. MSC operates some 110 noncombat ships that support U.S.
forces around the world, 2013.(“ Shipbuilding Remains Vital for U.S. Economy (6/20)”SIU, June 20,
2013, available at http://www.seafarers.org/news/2013/Q%202/MarAdIssuesShipyardStudy.htm,
accessed on 7/10/14)
49
LONG BEACH, Calif. – The U.S. Department of Transportation’s Maritime Administration
(MARAD) announced that the nation’s shipyards support $36 billion in gross domestic
product, as part of a report on the U.S. shipbuilding and repair industry issued today. Acting
Maritime Administrator Paul “Chip” Jaenichen shared the findings of the report, The Economic
Importance of the U.S. Shipbuilding and Repairing Industry, at the FuturePorts Annual
Conference in Long Beach, California. “Shipyards create quality jobs and support economic
growth far beyond our nation’s ports and waterways,” said U.S. Transportation Secretary
Ray LaHood. “This report shows that wherever you live across the country, Americans
benefit from opportunities generated by the shipbuilding and repair industry.” The report
notes that although most shipbuilders are located in coastal areas, the direct and indirect
economic benefits reach all 50 states. In 2011, the nation’s more than 300 shipyards directly
provided more than 107,000 jobs, $7.9 billion in labor income to the national economy and
contributed $9.8 billion in Gross Domestic Product (GDP). In addition, the average income
for these industry jobs, $73,000, is 45 percent higher than the national average. On a
nationwide basis, including direct, indirect, and induced impacts, the industry supported
402,010 jobs, $23.9 billion of labor income and $36 billion in GDP. The Obama
Administration recognizes the economic importance of the maritime industry and has provided
historic levels of funding to improve shipyards across the nation. Since 2009, the Department of
Transportation has provided nearly $150 million to improve infrastructure at U.S. shipyards
through its small shipyard grant program. “Our shipyard investments go directly toward an
industry that’s vital to our economic security and national defense,” said Acting Administrator
Jaenichen. The report notes the U.S. shipbuilding industry has run a trade surplus in six out
of the last ten years, with a cumulative trade surplus of $410 million over this period. The
report also shows that from 2010 to 2012, deliveries of vessels of all types, including tugs and
towboats, passenger vessels, commercial and fishing vessels, and oceangoing and inland barges,
exceeded 1,200 vessels per year, reaching 1,457 vessels in 2011.
50
A2 “US ≠ K2 Global Econ
US economic collapse will destroy the global economy
Mead 04 (Walter Russell, Senior Fellow at Council on Foreign Relations, “America's STICKY
Power,” Foreign Policy, Mar/Apr, Proquest)
Similarly, in the last 60 years, as foreigners have acquired a greater value in the United States–
government and private bonds, direct and portfolio private investments–more and more of them
have acquired an interest in maintaining the strength of the U.S.–led system. A collapse of the
U.S. economy and the ruin of the dollar would do more than dent the prosperity of the
United States. Without their best customer, countries including China and Japan would fall
into depressions . The financial strength of every country would be severely shaken should
the United States collapse. Under those circumstances, debt becomes a strength, not a weakness,
and other countries fear to break with the United States because they need its market and own its
securities. Of course, pressed too far, a large national debt can turn from a source of strength to a
crippling liability, and the United States must continue to justify other countries' faith by
maintaining its long–term record of meeting its financial obligations. But, like Samson in the
temple of the Philistines, a collapsing U.S. economy would inflict enormous, unacceptable
damage on the rest of the world . That is sticky power with a vengeance.
Studies prove
Arora & Vamvakidis 5 (Vivek&Athanasios, IMF Senior Resident Representatives,
“Economic Spillovers” Finance and Development; Sept, Vol 42, No 3;
http://www.imf.org/external/pubs/ft/fandd/2005/09/arora.htm)
Economists usually see the United States as an engine of the world economy: U.S. and world
output are closely correlated, and movements in U.S. economic growth appear to influence
growth in other countries to a significant degree. Certainly, given its size and close links
with the rest of the world, the United States could be expected to have a significant influence on
growth in other countries. In 2004, U.S. GDP accounted for over one–fifth of world GDP on a
purchasing power parity (PPP) basis and for nearly 30 percent of world nominal GDP at market
exchange rates. The United States accounted for nearly a quarter of the expansion in world real
GDP during the 1990s. World and U.S. growth have moved closely together in recent decades,
with a correlation coefficient of over 80 percent. Trade with the United States accounts for a
substantial share of total trade in a large number of countries. Estimates of the overall impact of
U.S. growth on growth in other countries during the past two decades, in the context of a
standard growth model, suggest that U.S. growth is a significant determinant of growth in a large
panel of industrial and developing countries, with an effect as large as one–for–one in some
cases (Arora and Vamvakidis, 2004). The impact of U.S. growth turns out to be higher than the
impact of growth in the rest of the world. This could be explained by the role of the United States
as a major global trading partner. The results are robust to changes in the sample, the period
51
considered, and the inclusion of other growth determinants, including common drivers of growth
in both the United States and other countries. We also found the impact of U.S. growth on
growth in other countries to be larger than that of other major trading partners . For
example, the impact of EU growth on the rest of the world is significant but smaller than the
impact of U.S. growth.
Downturn goes global
Boston Globe 2 (3–31, Lexis)
A coincidence? No way. More than any time in the recent past, the United States is the key
player in the world economy. "We are the only locomotive of growth," said Nariman Behravesh,
chief economist at DRI–WEFA, a Lexington forecasting firm. America's dominance is a function
both of our strength and the rest of the world's weakness. Europe and Japan, for different
reasons, aren't in a position to make much of a contribution. How did we get here? And what are
the implications of our leadership role? The answer to the first question is easier. America is
more critical to the world's economy, in part, because it represents a growing slice of the pie.
According to Economy.com, a Pennsylvania research firm, the United States now accounts for
32 percent of the world's economic output, up from 25 percent in 1990, and 24 percent in 1980.
The numbers climbed because America grew faster than its competitors, especially in the 1990s,
and because the US dollar, the measuring stick, has appreciated in value. The laws of arithmetic
dictate that when you get as big as America, you have a major impact on the other players in the
game. In some countries that impact is particularly large. In Singapore, for example, exports to
the US account for 27 percent of the gross domestic product. In Hong Kong, the comparable
number is 28 percent. In Mexico, about 25 percent. Simply put, when we stop buying, these
countries stop selling. And growing.
52
A2 “Econ = Resilient”
No resiliency – US economy still at grave risk of collapse following the
economic crisis
Yahoo News 9/16/12 ("U.S. economy still at 'grave risk' four years after Lehman Brothers
collapse," http://in.news.yahoo.com/u–economy–still–grave–risk–four–years–lehman–
082828101.html)
Washington, Sept. 16 (ANI): The American economy has not recovered four years after the
collapse of Lehman Brothers, a report has concluded. The financial crisis has cost the
country 12.8 trillion dollars, just in time for the four–year anniversary of the collapse.
According to ABC News, Better Markets, a non–profit organization whose self–described
mission is to 'promote the public interest in financial reform', estimated the cost of the 'Wall–
Street caused financial collapse and ongoing economic crisis' using figures from the
Congressional Budget Office and Gross Domestic Product estimates from the U.S. Bureau of
Economic Analysis. Lehman Brothers, the financial services firm, filed for bankruptcy on
September 15, 2008, with about 691 billion dollars in assets, the largest bankruptcy in U.S.
history. Dennis Kelleher, CEO of Better Markets, and co–author of the report, said his
organization timed its release with the anniversary to influence lawmakers to focus on tighter
regulations. "The message isn't to banks. It's to policy makers," Kelleher said, adding: "If you
look at the economic wreckage and suffering of the American people through the worst
economy since the Great Depression, and see that it caused trillions of dollars. The priority has
to be preventing this from ever happening again ." According to the report, Kelleher admitted
that the 12.8–trillion–dollar–figure is an estimate and not a comprehensive figure. The authors
focused on four categories of cost: unemployment, destroyed household wealth, government
bailouts and support, and human suffering. The report also estimates 'avoided GDP loss' from
2008 to 2012 at 5.2 trillion dollars, saying that figure describes 'the estimated additional amount
of GDP loss that was prevented only by extraordinary fiscal and monetary policy actions'.
According to the report, Kelleher said the United States is at 'grave risk' of another
financial crisis, despite the Wall Street financial overhaul implemented by the Dodd–Frank
Act.
No resilience – even Fed presidents concede the economy remains fragile
ForexLive 5/1/12 ("US Fed’s Lockhart, Evans See Fragile, Uncertain US Economy,"
http://www.forexlive.com/blog/2012/05/01/us–feds–lockhart–evans–see–fragile–uncertain–us–
economy/)
But both Fed presidents depicted a U.S. economy that has worked its way through stormy
seas, but still faces daunting challenges . Evans said the Fed is carefully watching how
policymakers in Congress and the White House navigate the coming fiscal cliff at the end of the
year in which the Bush era tax cuts are set to expire and deep spending cuts are set to be
implemented. He said he hopes “calmer heads prevail” and that Congress and the White House
53
find a way to avoid allowing sharply contractionary fiscal policies from going forward in 2013,
but also develop a credible framework to tackle future budget deficits. Sharp and immediate fiscal
tightening would provide a “very big headwind” for an economy that is already struggling to find
its footing and resume stronger growth, Evans said. And while long–term deficit reduction is
critical, “we don’t have to deal with it immediately.” Evans suggested a deficit reduction
framework that is agreed to now and implemented gradually and in the medium–term would be
optimal. “At the moment we need more accommodation for the entire economy,” Evans said,
adding that all policymakers are “frustrated” by the stubbornly high unemployment rate. The Fed
should continue to seek to reach its 2% inflation target, but Evans said he also is very concerned
that unemployment that is still greater than 8% is “way too high.” “I think we can get the
economy coming back” without having to tolerate a strongly inflationary policy, Evans said. And
the U.S. is still “pretty far away” from strong, robust economic growth. Evans said he is “not
optimistic” that Europe’s economy will strengthen in the near term. Lockhart also depicted an
American economy that is struggling. He said he sees a “certain amount of fragility” in the
economy , but added that it is “too early to tell” if the slowing will continue.
The economy isn't resilient—risk of economic downturn is increasing in light
of global economic fragility
Zandi 9/9/11 (Mark, Economist @ Moody's Analytics, "An Analysis of the Obama Jobs Plan,"
http://www.economy.com/dismal/article_free.asp?cid=224641)
The risk of a new economic downturn is as high as it has been since the Great Recession
ended more than two years ago. A string of unfortunate shocks and a crisis of confidence are
to blame. Surging gasoline and food prices and fallout from the Japanese earthquake hurt
badly in the spring; more recently, the debt–ceiling drama, a revived European debt crisis, and
the S&P downgrade have been especially disconcerting. Confidence, already fragile after the
nightmare of the Great Recession and Washington’s heated policy debates, was severely
undermined.
Whether the loss of faith in our economy results in another recession critically depends on
how policymakers respond . Whether they will succeed in shoring up confidence is a difficult
call. The odds of a renewed recession over the next 12 months are 40%, and they could go higher
given the current turmoil in financial markets. The old adage that the stock market has predicted
nine of the last five recessions is apt, but the recent free fall is disconcerting. Markets and the
economy seem one shock away from dangerously unraveling. Policymakers must work
quickly and decisively.
54
Solves Oceans: 2NC
Economic growth is key to ocean conservation
Marusiak 12 (Jenny, Former Deputy Editor of Eco-Business, “Growth and ocean conservation
must go hand in hand,” Eco-Business, 3-7-12, http://www.eco-business.com/news/growth-andocean-conservation-must-go-hand-in-hand/)
Businesses also have a role in ocean conservation , said experts. NGOs, in particular, often
seek private sector dollars and influence for conservation projects. GIST’s Mr Sukhdev said,
“Governments are not great at listening to scientists, but they do listen to corporations.”
Chief executive of Conservation International Peter Seligmann noted that CI had altered its
conservation strategy to include the needs of businesses and communities in long-term
plans to protect natural areas. The NGO’s original strategy of preserving natural resources by
restricting access was not working. Despite protecting hundreds of millions of acres of land in its
first two decades, CI’s efforts to preserve to them were losing to the pace of development - ‘the
most powerful driving force on earth’, he said. He further noted that getting the public and
business sectors to understand the value of the ocean’s resources was essential to preserving it,
and that progress was being made. The conservation movement had reached a turning point,
with both government and business leaders taking positive actions, said Mr Seligmann. “And
it is not philanthropic; it is enlightened self-interest,” he added. But there is a caveat to this,
warned several panellists. The head of sustainability for global consultancy
PriceWaterhouseCoopers (PWC) Malcolm Preston explained that business dollars would not
flow unless project managers could make a solid business case for conservation. Businesses
want to do the right thing, but they are beholden to their shareholders and their actions
must be economically logical, he said. For example, the North Asia chief executive of global
shipping firm Maersk Line, Tim Smith, said that many of the environmental improvements
the shipping industry could make, such as improved energy efficiency, provided costs
savings and had a clear business case. In one instance, Maersk had fitted vessels with a
US$10 million technology that turned waste heat into energy, which increases energy
efficiency and reduces carbon emissions by about nine per cent. Depending on the price of oil,
the company estimates it would recoup its investment in five to 10 years.
55
Navy
56
OCS K2 Shipbuilding
Increasing offshore natural gas production is key to the shipbuilding industry
Mason 9 (Joseph R. – Louisiana State University Endowed Chair of Banking and
nationally-renowned economist , “The Economic Contribution of Increased Offshore Oil
Exploration and Production to Regional and National Economies”, February,
http://www.americanenergyalliance.org/images/aea_offshore_updated_final.pdf)
Offshore oil and gas production has a significant effect on local onshore economies as well as
the national economy. There are broadly three “phases” of development that contribute to state economic
growth: (1) the initial exploration and development of offshore facilities; (2) the extraction of oil and gas
resources; and (3) refining crude oil into finished petroleum products. Industries supporting those phases are
most evident in the sections of the Gulf of Mexico that are currently open to offshore drilling. For example, the U.S.
shipbuilding industry — based largely in the Gulf region – benefits significantly from initial offshore oil
exploration efforts.9 Exploration and development also requires specialized exploration and
drilling vessels, floating drilling rigs, and miles and miles of steel pipe, as well as highly
educated and specialized labor to staff the efforts. The onshore support does not end with
production.
A recent report prepared for the U.S. Department of Energy indicates that the Louisiana economy is “highly dependent on a
wide variety of industries that depend on offshore oil and gas production”10 and that offshore
production supports onshore
production in the chemicals, platform fabrication, drilling services, transportation, and gas processing.11 Fleets
of helicopters and U.S.- built vessels also supply offshore facilities with a wide range of industrial and
consumer goods, from industrial spare parts to groceries. As explained in Section IV.G, however, the distance
between offshore facilities and onshore communities can affect the relative intensity of the local economic effects. The economic effects in the
refining phase are even more diffuse than the effects for the two preceding phases. Although significant capacity is located in California, Illinois,
New Jersey, Louisiana, Pennsylvania, Texas, and Washington, additional U.S. refining capacity is spread widely around the country.12 As a
result, refinery jobs, wages, and tax revenues are even more likely to extend into other areas of the country, including non-coastal states like
Illinois.
The plan revitalizes the shipbuilding industry
Mason 9 (Joseph R. – Louisiana State University Endowed Chair of Banking and
nationally-renowned economist , “The Economic Contribution of Increased Offshore Oil
Exploration and Production to Regional and National Economies”, February,
http://www.americanenergyalliance.org/images/aea_offshore_updated_final.pdf)
Onshore state and local economies benefit from the development of OCS resources by providing
goods and services to offshore oil and gas extraction sites. Onshore communities provide all manner of goods
and services required by offshore oil and gas extraction. A variety of industries are involved in
this effort: shipbuilders provide exploration vessels, permanent and movable platforms,
and resupply vessels ; steelworkers fashion the drilling machinery and specialized pipes required for offshore resource extraction;
accountants and bankers provide financial services; and other onshore employees provide groceries, transportation, refining, and other duties.
These onshore jobs, in turn, support other jobs and other industries (such as retail and hospitality establishments).
57
58
Shipbuilding K2 Military
Shipbuilding key to US military
MARAD 13 — Maritime Administration, an agency of the United States Department of
Transportation that maintains the National Defense Reserve Fleet (NDRF) as a ready source of ships for
use during national emergencies, and assists the NDRF in fulfilling its role as the nation's fourth arm of
defense, logistically supporting the military when needed, 2014. (“Importance of the U.S. Shipbuilding
and Repairing Industry”, USDOT, May 30, 2013, available at
http://www.marad.dot.gov/documents/MARAD_Econ_Study_Final_Report_2013.pdf, accessed
on 7/10/14)
The federal government, including the U.S. Navy, U.S. Army, and U.S. Coast Guard,
remains an important source of demand for U.S. shipbuilders. While only 15 of the 1,459
vessels delivered in 2011 were delivered to the U.S. government, nearly all (8 out of 11) of the
large deep-draft vessels delivered were delivered to U.S. government agencies (seven to the U.S.
Navy and one to the National Oceanic and Atmospheric Administration). According to the
Annual Survey of Manufactures, total revenues for the U.S. shipbuilding and repairing
industry amounted to $21.9 billion in 2011, down from $22.1 billion in 2010. Initial
estimates for 2012 from industry sources indicate total revenues of $19.7 billion for the U.S.
shipbuilding and repairing industry, with 60.3 percent coming from military shipbuilding,
21.7 percent from commercial shipbuilding, and the remaining 18.0 percent from ship repairs
(see Figure 5). pyard (see Figure 7).
And, a strong maritime and shipbuilding industry is a vital pre requisite to
credible naval capabilities
Alberto, et al., 5 (Lieutenant Colonel Ronald P., U.S. Army, Colonel Michael G. Archuleta,
U.S. Air Force, Lieutenant Colonel Steven H. Bills, U.S. Air Force, Commander William A.
Bransom, U.S. Navy, Mr. Kenneth Cohen, Department of State, Commander William A. Ebbs,
U.S. Navy, George Manjgaladze, Ministry of Defense, Republic of Georgia, Commander
Elizabeth B. Myhre, U.S. Navy, Audrea M. Nelson, DA, Robert L. Riddick, Department of
Defense, Colonel Christopher M. Ross, U.S. Army, Julia N. Ruhnke, DA, Lieutenant Colonel
Gregory M. Ryan, U.S. Marine Corps, Colonel David D. Thompson, U.S. Air Force,
Commander Hugh D. Wetherald, U.S. Navy, Dr. Mark Montroll, faculty at the Industrial College
of the Armed Forces, Dr. Michael Farbman, USAID, faculty at the Industrial College of the
Armed Forces, Captain David B. Hill, U.S. Coast Guard, faculty at the Industrial College of the
Armed Forces, “SHIPBUILDING”, The Industrial College of the Armed Forces, National
Defense University, 2005,
http://www.ndu.edu/icaf/programs/academic/industry/reports/2005/pdf/icaf-is-reportshipbuilding-2005.pdf, Deech)
In conclusion, our
study found that the tremendous advantage the US enjoys in naval power
directly supports our national security through global power projection and maintaining
freedom of the seas. Our ability to build large, highly capable naval ships is a vital part of our
59
naval superiority and is therefore inexorably linked to our national security. The US must
maintain it lead in naval power by protecting its domestic shipbuilding industry . It is our
conclusion that the number one issue facing the American military shipbuilder today is the uncertainty
in future orders for ship construction. The year to year fluctuation in the projected naval order book adds uncertainty for the shipbuilder
wanting to invest in capital and labor improvement, and adds cost to the vessels actually being delivered. This fluctuation is exacerbated when the
US Navy cancels entire ship classes or severely limits procurement of vessels that have been programs of record, programs which the
shipbuilders have used to make labor and capital investment decisions. We feel it is imperative for the Navy to identify the force of the future and
commit to a stable procurement plan to implement that force. The concept of Seabasing must mature at least to the point where the major yards
can invest in the infrastructure necessary to build the force. In this area, we also conclude that the requirement for full funding of naval vessels in
the year of authorization hampers the ability of the Navy and the industry to maintain a steady shipbuilding plan. It is apparent to us that the US
Navy shipbuilding program is often used as a “bill payer” for other DoD priorities. In addition to the reality that the money is not obligated in the
year of funding, the temptation to use the US Navy shipbuilding account to pay current year expenses is greater if significant procurement dollars
are available to pay the full cost of individual ships. While we are convinced the
nation must maintain sufficient
shipbuilding capacity to allow for surge in national emergencies , we feel that the current and
projected naval order book does not support the capacity being carried by the six largest shipyards. Restructuring
of the industrial base is necessary. This restructuring may entail the politically difficult decision to allow some yards to close, but if the naval
order book does not increase and the restructuring does not occur, unit cost will continue to skyrocket out of proportion to the value to the nation
of the vessel.
60
Impact – Navy – 2AC
Naval engagement is key to prevent a laundry list of threats
NLUS, 12 – a nonprofit organization dedicated to educating our citizens about the importance
of sea power to U.S. national security and supporting the men and women of the U.S. Navy,
Marine Corps, Coast Guard and U.S.-flag Merchant Marine and their families (Navy League of
the United States, “Maritime Primacy & Economic Prosperity: Maritime Policy 2012-13”, Navy
League of the United States, 1/21/12,
http://www.navyleague.org/files/legislative_affairs/maritime_policy20122013.pdf)
Global engagement is critical to the U.S. economy, world trade and the protection of
democratic freedoms that so many take for granted. The guarantors of these vital elements
are hulls in the water, embarked forward amphibious forces and aircraft overhead. The Navy
League of the United States’ Maritime Policy for 2012-13 provides recommendations for strategy, policy and the allocation of national resources
in support of our sea services and essential to the successful execution of their core missions. We
challenges —
live in a time of complex
terrorism , political and economic turmoil, extremism , conflicts over
environmental resources, manmade and natural disasters
— and potential
flash points
exist around the globe . It is the persistent forward presence and engagement of maritime
forces that keep these flash points in check, prevent conflict and crisis escalation, and allow
the smooth flow of goods in a global economy. The United States has fought multiple wars
and sacrificed much to ensure un challenged access to sea lanes and secure the global
commerce upon which the U.S. economy depends. The “persistent naval presence”
provided by our forward-deployed Navy and Marine Corps ships, aircraft, Sailors and
Marines is the guarantor of that hard-won maritime security and the critical deterrent
against those who might seek to undermine that security. Maintaining naval forces that can
sustain our national commitment to global maritime security and dissuade transnational
aggression in the future must be a national imperative. The No. 1 challenge to that
imperative is the lack of a fully funded, achievable Navy shipbuilding program that
produces the right quantity and quality of ships, with the right capabilities, for the right costs, in economically
affordable numbers over the next 25 years. A shipbuilding plan must be defined and agreed upon by the Navy,
the Departments of Defense (DoD) and Homeland Security, Congress and the administration — and executed now. Recognizing that hard
choices must be made in a reduction of the defense budget, the Navy League is reducing its recommended
funding for the Department of the Navy’s Shipbuilding and Conversion, Navy (SCN), account to $20 billion or more per year. This reduced
funding leads to a recommended reduced force level of 305 ships to meet our nation’s global security challenges. This also recognizes that the
worldwide commitment of ship deployment must be reduced. America’s amphibious expeditionary force is prepared to engage today’s threats —
Our Marines remain heavily engaged in Afghanistan and support numerous other
small-unit operations that enable nation-building with allies around the globe. The Marine Corps
today.
needs the authorization to reduce to an end strength of 186,800 Marines, and this force level must be properly resourced to maintain a balanced
air-ground logistics team. The Corps must regain its expertise in amphibious operations and maintain that capability in force structure. The
service also must be provided the resources to reset the force, to restore or acquire new equipment and capabilities consumed in the ongoing wars.
The Coast Guard is a multimission, worldwide-deployed armed force with broad law enforcement authorities. It operates seamlessly with the
DoD services as prescribed by the National Command Authority and is the lead agency for maritime homeland security and law enforcement
support to the Navy in deployed operations. In addition, it fulfills several legally mandated missions, including its most employed mission of
search and rescue, plus protection of living marine resources, drug interdiction, illegal migrant interdiction, defense readiness, marine safety, ice
operations, aids to navigation, marine environmental protection, and ports, waterways and coastal security. The substantial breadth of operations,
which has increased markedly in tempo since the 9/11 attacks, continues to overstress aging equipment, resulting in rising maintenance costs and
a greater workload for Coast Guard personnel. The Coast Guard must increase its active-duty military strength to at least 45,000, have an
operational expense budget of at least $6.7 billion and an Acquisition, Construction and Improvements (AC&I) budget resourced at no less than
61
Skilled Mariners are
more critical than ever to ensuring our ability to sustain U.S. national and global security
interests. Ninety-five percent of the equipment and supplies required to deploy the U.S.
armed forces is moved by sea. The base of skilled U.S. Merchant Mariners is shrinking. The
$2.5 billion per year, of which $2 billion should be dedicated to continuing the recapitalization of the fleet.
shipping capabilities of the Maritime Administration’s Ready Reserve Force and the DoD’s Military Sealift Command are sized to support
routine and some surge logistics and specialized mission requirements. This critical capability must be maintained by ensuring an active
commercial U.S.-flag Merchant Marine to support efficient and cost-effective movement of DoD cargo.
The U.S. shipbuilding
industry is in crisis . Finding a solution must be an imperative if our nation is to maintain a
Navy capable of supporting the nation’s defense. Jobs lost in this sector mean precious
ground lost in capability and capacity that cannot be regained. The current production
levels for ship construction and the manufacturing of the other critical systems, equipment
and weapons that we install in our ships, submarines and aircraft are at critically low
levels . Sustaining and upgrading our nation’s critical, defense-related industrial base must
be an essential element of our National Security Strategy. Personnel must train as they will fight to remain
operationally ready. This all-volunteer military also must receive highly competitive compensation in the way of salary as well as health care,
retirement and quality-of-life benefits to remain an effective fighting force. Taking care of our wounded warriors is fundamental.
62
Impact – Navy – 2AC Deterrence
Naval power is key to deter multiple scenarios of regional conflict.
Swartz et. al, March 2010 (Peter – research analysis at the Center for Naval Analysis, The Navy
at a Tipping Point: Maritime Dominacne at Stake?, Daniel Whiteneck, Michael Price, Neil
Jenkins, p. 15-17)
The world system in which the USN will operate is evolving along three dimensions at once. First, the
system is seeing the
emergence of some strong states that can and intend to challenge the traditional global order on
certain economic issues and regional security issues. In Asia, China asserts more influence over regional issues from
Korea around to the South China Sea. In the Middle East and Persian Gulf region, Iran is an opportunistic
regional power threatening Western-aligned states and Western interests. Russia, humiliated for a decade, has a more
nationalistic
and defensive foreign
policy in the territory of the former Soviet Union. In this environment, the coordination of
Western allied responses has been more difficult. Second, there are elements of a chaotic future in the area loosely defined by Tom Barnett’s
“Gap” as outlined in his book, The Pentagon’s New Map (from Indonesia to South Asia and the Middle East, and on through most of Africa) [5],
especially in the
region from Morocco to Pakistan, where terrorism and Islamic radicalism
continue to threaten U.S. interests and global stability . The “long war” against Islamic radical terror looks like it
will continue for years. Poorly governed areas and weak states will continue to allow groups that
threaten local and regional security to survive. As long as there are groups that equate globalization and modern life with the
triumph of the U.S., the threat of chaos from these groups will continue as they seek to turn back the tide. At the same time, part of the world is
creating greater cooperative solutions to problems. This is characterized by the extension and strengthening of the democratic community of
states, the continued management of the global economy without major crises by the Organization for Economic Cooperation and Development
(OECD) states through legitimized multilateral organizations, the absence of major regional conflicts between states, the limitation of third-world
conflicts with minimal impact on regional stability, and the continued role of the U.S. as a global military power without parallel. In
this
evolving world, the U.S. government expects the U.S. Navy to exert maritime dominance on
demand. USN responses to the competitive world will involve shows of force by combatcredible forces to deter regional challengers , participate in ballistic missile defense (BMD) deterrence missions and
exercises with allies and partners for reassurance, maintain a constant visible presence in WESTPAC and the
Arabian Gulf/North Arabian Sea, and react to threats to maritime commerce. The chaotic parts of
the world will require responses, ranging from non-combatant evacuation operations (NEOs) to
littoral operations (from counter-piracy to SOF and ISR), and from maritime interdictions for the prevention of proliferation to limited
strikes with power projection forces on proliferators. All of these will have to be part of the Navy’s capabilities ,
in addition to continuing engagement with allies and partners who expect USN leadership of coalition maritime operations. The Navy will
be the framework provider for regional coordination and partnerships, and naval cooperation will be
part of integrated engagement processes involving whole-of government approaches.
63
Exports Advantage
64
Uniqueness
65
Exports Down Now
Natural gas exports have been consistently decreasing; on the brink now.
DOE 14 (The United States Department of Energy (DOE) is a Cabinet-level department of the United States
government concerned with the United States' policies regarding energy and safety in handling nuclear material. Its
responsibilities include the nation's nuclear weapons program, nuclear reactor production for the United States
Navy, energy conservation, energy-related research, radioactive waste disposal, and domestic energy production.
"U.S. Natural Gas Imports & Exports 2013" http://www.eia.gov/naturalgas/imports exports/annual/) SM
U.S. net imports of natural gas into the United States fell 14% in 2013, continuing a decline that began in 2007. Robust
natural gas production in the United States likely displaced imports, which decreased by 8% in 2013 to 2,883 Bcf. Based on preliminary data for
2013, domestic dry natural gas production increased by 1% to 24,282 billion cubic feet (Bcf), a new record. Abundant production of natural gas
helped reduce U.S. reliance on foreign natural gas and helped maintain a high price differential between domestic and foreign markets outside of
North America, increasing
interest in the potential export of U.S. liquefied natural gas (LNG).
Natural gas net imports fell by 14% to 1,311 Bcf in 2013, the lowest level since 1989. Total imports
decreased by 8% to 2,883 Bcf in 2013 from the previous year’s level. Pipeline imports
decreased by 6% to 2,786 Bcf, and LNG imports decreased by 45% to 97 Bcf. Total exports, which
increased in all but two years from 1997 to 2012, decreased by 3% to 1,572 Bcf in 2013. Pipeline exports decreased by 1%
to 1,569 Bcf, while LNG exports, already lower than 2% of total exports, decreased to 3
Bcf. For the first time , the United States exported a small amount of compressed natural
gas
(CNG) to Canada by truck, totaling 0.1 Bcf.LNG imports decreased by 45% from the 2012 level to 97 Bcf in 2013, the lowest level since
1998. Even
though U.S. natural gas prices increased in 2013, they remained unattractive
compared with international LNG prices, which were two to four times higher than Henry
Hub prices. LNG imports from Trinidad and Tobago and Yemen made up 83% of total
LNG imports. LNG imports were lower from almost all trading partners, particularly from Qatar and Trinidad and Tobago, which
decreased by 78% and 38% from the previous year’s level to 7 Bcf and 70 Bcf, respectively.
66
China
67
China– 1AC
Scenario : US-China Relations
Sustainable US LNG exports spurs cooperative LNG trading with China –
that’s key to overall relations
Livingston and Tu 12 (David, Junior Fellow in the Energy and Climate Program – Carnegie
Endowment for International Peace, and Kevin Jianjun, Senior Associate in the Energy and
Climate Program – Carnegie Endowment for International Peace, “Feeding China’s Energy
Appetite, Naturally,” Energy Tribune, 7-17,
http://www.energytribune.com/articles.cfm/11206/Feeding-Chinas-Energy-Appetite-Naturally)
Ever since CNOOC, one of China’s “big three” national oil companies, made an ill-fated bid to take over Unocal Corporation in 2005, Sino-
U.S. energy relations have been
marred with mistrust . Foreign acquisitions by China’s national oil
companies thereafter have largely avoided the United States. Many were thus caught off guard by recent reports that Sinopec has
emerged as a leading suitor for some of the $7 billion in natural gas assets that Chesapeake Energy must shed to avoid a breach of its debt
covenants. Yet upon closer inspection, the move is deft and bears the imprint of lessons well-learned. Chinese national oil companies
know from prior experience that in the United States they must wear kid gloves to avoid getting burned . With U.S.
natural gas prices projected to remain at $2-4/Mmbtu and far higher returns on investment elsewhere around the globe, why would Sinopec pour
capital into American shale gas production when so many U.S. companies are shutting down rigs? There are a number of macro- and microdynamics at play here. China’s demand for gas is expected to grow rapidly in the coming years. Natural gas currently
accounts for only 4 percent of the country’s energy mix, but the International Energy Agency projects this rising to 13 percent by
2035. The same organization predicts that China will account for roughly a quarter of global gas demand growth over the
same period. There is also a high level of uncertainty over how reliant the country will be on foreign gas. Much of this will depend on China’s
ability to exploit its vast domestic shale gas resources. If unconventional development is well-orchestrated, Chinese gas imports as a share of total
demand could be as low as 20 percent in 2035. Alternatively, slow progress in unconventional gas development could lead to a dependency rate
north of 50 percent, according to the IEA. In either scenario, a stake in Chesapeake’s gas assets could potentially pay dividends
for China. Chesapeake was one of the first to commit wholeheartedly to the potential of shale gas in the United States. It has snatched up vast
swaths of shale acreage, and possesses the technology and know-how to efficiently extract unconventional gas from these basins. Sinopec would
love nothing more than to gain firsthand experience with hydraulic fracturing and horizontal drilling techniques that could eventually be applied
to China’s massive shale resources. According to the U.S. Energy Information Administration, technically recoverable shale gas reserves in
China are at least 50 percent greater than the sizeable shale endowment in the United States. Sinopec drilled its first shale gas well in Chongqing
on June 9, but until it develops the capacity to unlock domestic resources en masse at low cost, acquisitions are the quickest way to bolster its gas
reserves. The company might be seeking to secure a dedicated stream of U.S. natural gas production for shipping to
China as liquefied natural gas in the future. This is a complicated proposition, especially considering that the scale of
U.S. LNG exports is highly uncertain. The prospect of rising domestic gas prices as a consequence of satiating Chinese demand would
become a thorny political issue, whether merited or not. At the corporate level, Sinopec’s own characteristics reveal an internal logic to the
prospective Chesapeake deal. The move is driven by its international market-oriented new boss, Fu Chengyu. Fu served at the helm of CNOOC
until 2010 and his failure to secure the Unocal deal in 2005 will undoubtedly inform his current attempt. Evidence of this can already be seen in
Sinopec’s preference for partial assets over outright ownership. Of course, Sinopec precluding itself from an operational role also potentially
distances it from the technologies and methodologies that it covets. Nevertheless, Fu has remains tempted by U.S. shale gas assets with
attractive valuations. Sinopec has been slower getting into America than its rival CNOOC, which recently entered into two billion-dollar
joint ventures with Chesapeake in the Niobrara and Eagle Ford shale. Moreover, Sinopec suffers from an unbalanced portfolio, with too many
loss-making refineries and too few premiere upstream assets. Oil and gas projects in Iran that have been abandoned by Western
companies would normally be an attractive target, but Beijing has increasingly pressured national oil companies to
curtail involvement in the pariah state. Unsurprisingly, Sinopec has recently returned its gaze to the United States. Although U.S. natural
gas won’t offer lucrative returns until prices rise, Chesapeake’s acreage is likely to sell at a discount and would allow Sinopec to hedge its
holdings in more geopolitically tenuous markets. After his $2.5 billion deal with Devon Energy in January for stakes in five different liquids-rich
shale plays, a tie-up with Chesapeake would solidify Fu’s reputation as a shrewd CEO. For China, the deal offers another geopolitical
hedge—the opportunity to turn dollar-denominated treasury bills into real energy assets. The Chinese government
would likely play a key role in financing any large deals pursued by its national oil companies . This is an aspect of the
deal worth watching. CNOOC’s critics back in 2005 objected to the assortment of low-interest and interest-free loans backed by Chinese
government coffers. Were Sinopec to rely on a similar arrangement of state support, it might be met with resistance in the United States. But the
U.S. congress is in a much weaker position than it was in 2005. Partial asset ownership is not the wholesale surrender of a strategic corporation,
68
and the
American natural gas industry would welcome with open arms the capital inflow. This points to the most
constructive way forward for both Washington and Beijing. China is still trying to grow a domestic shale gas industry without
opening the market to international players. During the second round of shale gas bids in China, a small window was opened for other domestic
companies, but none of them have more sophisticated technology than CNPC, Sinopec, or CNOOC. Sooner or later, China will realize that
there are no shortcuts if shale gas is to be developed safely, efficiently, and responsibly. It
should follow its own offshore oil
exploration model, offering up its domestic market in return for cutting-edge technology. The Chesapeake deal may pay
dividends to both the United States and China, but
the synergy will go even further
if Beijing eventually returns the favor at
home.
Specifically – that removes Chinese fears of US encirclement – solves USChina conflict and spills over to clean tech cooperation
Stone 11 (Matt, Energy Consultant, US Foreign Policy Analyst, and Junior Associate –
McKinsey & Company, “Natural Gas,” The Diplomat, 2-15, http://thediplomat.com/whats-nextchina/natural-gas/)
In the space of just a couple of years, natural
gas has become the 'next big thing' in energy circles. The recent expansion of unconventional
gas production in North America has transformed the United States into the world’s top producer of the fuel . Cleanerburning than coal, gas is expected to benefit in a carbon-constrained world as it displaces coal in the electricity-generation sector. Moreover a burgeoning
interconnected global gas market, spurred by the expansion of the sea-borne liquefied natural gas (LNG) trade, is helping to increase
market flexibility so that disruptions like those caused by Russia-Ukrainian disputes have less pernicious effects on
downstream countries. Hoping to take advantage of these developments, China has crafted a strategy for natural gas that aims to increase domestic
production and secure access to gas resources in neighbouring countries. For Beijing, gas offers an opportunity to power its growing economy in a less polluting way
than burning coal (although coal is expected to remain vital to China’s rapid economic ascent). Natural gas may also have a role to play in the transportation sector,
where Beijing is experimenting in dramatic fashion with compressed natural gas (CNG) in automobiles. Historically, oil’s prominent and essential role in the
transportation sector has driven its centrality in international affairs. A
would allow China to be marginally
transportation sector that could rely jointly on oil and natural gas
more indifferent to Middle Eastern geopolitics—in stark contrast with the US experience
of the past half-century. The BP Statistical Review of World Energy 2010 estimates that China produced approximately 85 billion cubic metres (bcm) of natural gas in
2009, while consuming 89 bcm, an import gap that’s expected to expand rapidly in the coming years as gas demand outpaces domestic supply. Indeed, the
International Energy Agency (IEA) sees China’s gas demand increasing by 6 percent annually through 2035. The reality is, though, that the
country’s own
conventional natural gas resources are nowhere near enough to meet this growing demand, forcing Beijing to ramp
up its efforts to access gas supplies abroad—particularly in Central Asia, Russia and Burma . It’s here that the frequent portrayal
of Beijing as a cash-flush power willing to throw money around to lock up resources is misplaced. China has in fact been carefully expanding its influence in Central
Negotiations with Russia over gas supplies, for example, have
been ongoing for years (much to Moscow’s consternation). The proposal on the table now would mean two pipelines entering China—one in Xinjiang from
Asia and Russia in particular, biding its time until the right deal has come along.
the Russian region of Altai and another in Manchuria from the Russian Far East. The former line would have a capacity of 30 bcm per year, the latter 38 bcm per year.
Although
Moscow enjoys a privileged position in the export of Russian oil and gas for both economic and political reasons, its manipulation of
energy flows to Europe has tarnished the country’s reputation as a reliable supplier of hydrocarbons. Meanwhile,
investments in the gas fields that would supply China have been slow to materialize . Both points will likely have
made Beijing think carefully about the implications of an inconsistent supply of Russian gas. This reticence over gas is in contrast with a deal
struck over crude oil, with China having issued a $25 billion loan to Russia in February 2009 to secure a 20-year supply of crude oil. At the same time, Beijing
has postponed a decision on a loan for natural gas—a conspicuous vote of no confidence in Russia’s short-term
attractiveness as a gas supplier. If the story of the Russia-China gas trade relationship is one of chess-like negotiations and Beijing’s reticence,
China’s experience in Central Asia has been more straightforward . China signed an agreement to build a gas pipeline out of Turkmenistan
But lack of agreement on the price Russian state gas company Gazprom will charge has stalled things. Of course, there’s more to this than pricing.
via Uzbekistan and Kazakhstan in 2006. Backstopped with a $4 billion loan to Ashgabat and upstream contracts for China’s state-owned CNPC in Turkmenistan, the
pipeline came online in December 2009—impressively swift. However, now that it’s operational, Beijing has leveraged its position to extract concessions from the
countries along the pipeline. Turkmenistan in particular is under pressure. Russia has cut its purchases of Turkmen gas by three-quarters since 2008, prompting
Ashgabat to push China to buy more gas. But Beijing, keenly aware of its negotiating advantage, has held out, purchasing only 4 bcm this
year. In the case of Uzbekistan and Kazakhstan, China has spurred competition for access to the pipeline, with the two engaging in development of gas fields and
infrastructure in order to access the pipeline before the other. That said, China may decide it’s in its own interests to selectively manage access to the pipeline in order
to win concessions on price and upstream contracts in each country, which would provide it potent political leverage with countries that would prefer to develop
robust alternatives to exporting hydrocarbons to Russia. But can Beijing afford to play the long game with neighbouring gas suppliers given its fast-growing demand?
A look at China’s alternative sources of supply, particularly domestic production and increasing volumes of LNG in the
country’s gas supply mix, offer a
glimpse of a possible answer . Beijing has prioritized the development of domestic gas supply,
69
partnering with a number of Western oil firms to develop the country’s unconventional gas resources, which are thought to be large. Washington
has
promoted this cooperation through the US-China Shale Gas Resource Initiative, a mechanism announced in November 2009 to share
expertise and technology for unconventional gas production. In addition, LNG spot prices are currently depressed , prompting Chinese
energy firms to purchase spot cargoes through the country’s three LNG import terminals . Sixteen more LNG import
terminals are
under consideration . Such trends point to a relative decline in the importance of Russian and Central Asian gas to China’s
energy security future—a narrative that Beijing’s diplomats are sure to promote in Moscow, Ashgabat, Tashkent and Astana. Chinese national oil companies operate
with the explicit backing of the Chinese state–including the state budget.In a region where governments treat their oil and gas resources as strategic commodities to be
traded for political perquisites, Chinese companies therefore possess an in-built advantage. But more importantly, China’s unity of effort—political and commercial—
allows Beijing to act strategically, with long time horizons, in order to secure the best deal. While China couldn’t have predicted the revolution in unconventional gas
production or the global recession, its patience has strengthened its bargaining position vis-à-vis Russia and the Central Asian states. Beijing’s engagement also has
the tacit consent of Washington. Western policy in the post-Soviet period has been designed to reinforce Central Asian sovereignty by developing export corridors for
oil and gas that avoid Russian (and Iranian) territory. While the United States and Europe have had some success on the western edge of the Caspian Sea by
constructing the Baku-Tbilisi-Ceyhan oil pipeline and the Baku-Tbilisi-Erzurum gas pipeline, large-volume trans-Caspian projects for Kazakh and Turkmen oil and
gas have been delayed for commercial and geopolitical reasons. In this regard, China has developed a non-Russian, non-Iranian export corridor for Turkmen, Uzbek,
and Kazakh gas where the West couldn’t (there’s also a Kazakhstan-China oil pipeline in operation). In a sense, this
should provide
greater
stability in an important and strategic part of the world. And China, meanwhile, appears to have not yet attempted to
translate its newfound economic heft into political influence to the West’s detriment: Beijing has so far avoided
pushing for the curtailment of the Western military presence in Central Asia despite ongoing worries about
‘encirclement.’ China’s energy trade relationships with Russia and Central Asia should also make the Middle Kingdom feel more assured about its energy
security future. Much
of China’s
naval build-up and assertive behaviour , especially in the South China Sea, in recent years is
motivated by concerns about the security of China’s sea-borne energy imports from the Middle East, both oil and LNG. In
the post-World War II period, the US Navy has played the role of guarantor of open trade on the high seas, but Beijing
appears to believe this commitment won't continue in the event of conflict with Washington over Taiwan or North Korea.
The United States’ efforts to help China expand domestic gas production and its lack of opposition to China-bound pipelines out of
Central Asia and Russia should
be interpreted by Beijing as
indicative of the US commitment to help China grow
comfortable about its place in the American-led world order. Natural gas is clearly an important component of
Beijing’s energy strategy over the next century. Thus far, China’s approach to accessing foreign and domestic sources of
supply has proven collaborative, rather than confrontational, in nature. US assistance on Chinese unconventional gas
production presages
greater cooperation on energy matters , including in clean-tech where Beijing and Washington
can best address climate-altering carbon emissions. In Russia and Central Asia, meanwhile, China has husbanded its resources and influence to
achieve advantageous deals.
That’s the most likely for escalated US-China conflict
Glaser 12 (Bonnie S., Senior Fellow – Center for Strategic and International Studies, “Armed
Clash in the South China Sea,” CFR, April, http://www.cfr.org/east-asia/armed-clash-southchina-sea/p27883)
The risk of conflict in the South China Sea is significant. China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines have
competing territorial and jurisdictional claims, particularly over rights to exploit the region's possibly extensive
reserves of oil and gas. Freedom of navigation in the region is also a contentious issue, especially between the United
States and China over the right of U.S. military vessels to operate in China's two-hundred-mile exclusive economic zone
(EEZ). These tensions are shaping—and being shaped by—rising apprehensions about the growth of China's military
power and its regional intentions. China has embarked on a substantial modernization of its maritime paramilitary
forces as well as naval capabilities to enforce its sovereignty and jurisdiction claims by force if necessary. At the same
time, it is developing capabilities that would put U.S. forces in the region at risk in a conflict , thus potentially denying
access to the U.S. Navy in the western Pacific. Given the growing importance of the U.S.-China relationship, and the Asia-Pacific
region more generally, to the global economy, the United States has a major interest in preventing any one of the various disputes
in the South China Sea from
escalating militarily . The Contingencies Of the many conceivable contingencies
involving an armed clash in the South China Sea, three especially threaten U.S. interests and could potentially prompt the United
70
States to use force. The
most likely and dangerous contingency is a clash stemming from U.S. military
operations within China's EEZ that provokes an
armed Chinese response . The United States holds that nothing in the
United Nations Convention on the Law of the Sea (UNCLOS) or state practice negates the right of military forces of all nations to conduct
military activities in EEZs without coastal state notice or consent. China insists that reconnaissance activities undertaken without prior
notification and without permission of the coastal state violate Chinese domestic law and international law. China routinely intercepts
U.S. reconnaissance flights conducted in its EEZ and periodically does so in
the risk of an accident
aggressive ways that increase
similar to the April 2001 collision of a U.S. EP-3 reconnaissance plane and a Chinese F-8 fighter jet near
Hainan Island. A comparable
maritime incident could be triggered by Chinese vessels harassing a U.S. Navy
surveillance ship operating in its EEZ, such as occurred in the 2009 incidents involving the USNS Impeccable and the USNS
Victorious. The large growth of Chinese submarines has also increased the danger of an incident, such as when a Chinese submarine collided
with a U.S. destroyer's towed sonar array in June 2009. Since neither U.S. reconnaissance aircraft nor ocean surveillance vessels are armed, the
United States might respond to dangerous behavior by Chinese planes or ships by dispatching armed escorts. A miscalculation or
misunderstanding could then result in a
deadly exchange of fire , leading to further military escalation
and precipitating a major political crisis. Rising U.S.-China mistrust and intensifying bilateral strategic competition
would likely make managing such a crisis more difficult. A second contingency involves conflict between China and the
Philippines over natural gas deposits, especially in the disputed area of Reed Bank, located eighty nautical miles from Palawan. Oil survey
ships operating in Reed Bank under contract have increasingly been harassed by Chinese vessels. Reportedly, the United Kingdom-based Forum
Energy plans to start drilling for gas in Reed Bank this year, which could provoke an aggressive Chinese response. Forum Energy is only one of
fifteen exploration contracts that Manila intends to offer over the next few years for offshore exploration near Palawan Island. Reed Bank is a red
line for the Philippines, so this
contingency could
quickly escalate to violence
if China intervened to halt the drilling. The United States could be
drawn into a China-Philippines conflict because of its 1951 Mutual Defense Treaty with the Philippines. The treaty states, "Each Party recognizes that an armed attack in the Pacific Area on either of the Parties would be dangerous to
its own peace and safety and declares that it would act to meet the common dangers in accordance with its constitutional processes." American officials insist that Washington does not take sides in the territorial dispute in the South
China Sea and refuse to comment on how the United States might respond to Chinese aggression in contested waters. Nevertheless, an apparent gap exists between American views of U.S. obligations and Manila's expectations. In
mid-June 2011, a Filipino presidential spokesperson stated that in the event of armed conflict with China, Manila expected the United States would come to its aid. Statements by senior U.S. officials may have inadvertently led Manila
to conclude that the United States would provide military assistance if China attacked Filipino forces in the disputed Spratly Islands. With improving political and military ties between Manila and Washington, including a pending
agreement to expand U.S. access to Filipino ports and airfields to refuel and service its warships and planes, the United States would have a great deal at stake in a China-Philippines contingency. Failure to respond would not only set
back U.S. relations with the Philippines but would also potentially undermine U.S. credibility in the region with its allies and partners more broadly. A U.S. decision to dispatch naval ships to the area, however, would risk a U.S.China naval confrontation. Disputes between China and Vietnam over seismic surveys or drilling for oil and gas could also trigger an armed clash for a third contingency. China has harassed PetroVietnam oil survey ships in the past
that were searching for oil and gas deposits in Vietnam's EEZ. In 2011, Hanoi accused China of deliberately severing the cables of an oil and gas survey vessel in two separate instances. Although the Vietnamese did not respond with
force, they did not back down and Hanoi pledged to continue its efforts to exploit new fields despite warnings from Beijing. Budding U.S.-Vietnam relations could embolden Hanoi to be more confrontational with China on the South
China Sea issue. The United States could be drawn into a conflict between China and Vietnam, though that is less likely than a clash between China and the Philippines. In a scenario of Chinese provocation, the United States might
opt to dispatch naval vessels to the area to signal its interest in regional peace and stability. Vietnam, and possibly other nations, could also request U.S. assistance in such circumstances. Should the United States become involved,
subsequent actions by China or a miscalculation among the forces present could result in exchange of fire. In another possible scenario, an attack by China on vessels or rigs operated by an American company exploring or drilling for
hydrocarbons could quickly involve the United States, especially if American lives were endangered or lost. ExxonMobil has plans to conduct exploratory drilling off Vietnam, making this an existential danger. In the short term,
however, the likelihood of this third contingency occurring is relatively low given the recent thaw in Sino-Vietnamese relations. In October 2011, China and Vietnam signed an agreement outlining principles for resolving maritime
Strategic warning signals that indicate heightened
risk of conflict include political decisions and statements by senior officials, official and unofficial media reports,
and logistical changes and equipment modifications. In the contingencies described above, strategic warning indicators
could include heightened rhetoric from all or some disputants regarding their territorial and strategic interests. For
example, China may explicitly refer to the South China Sea as a core interest ; in 2010 Beijing hinted this was the case but subsequently backed away from the
issues. The effectiveness of this agreement remains to be seen, but for now tensions appear to be defused. Warning Indicators
assertion. Beijing might also warn that it cannot "stand idly by" as countries nibble away at Chinese territory, a formulation that in the past has often signaled willingness to use force. Commentaries and editorials in authoritative
media outlets expressing China's bottom line and issuing ultimatums could also be a warning indicator. Tough language could also be used by senior People's Liberation Army (PLA) officers in meetings with their American
counterparts. An increase in nationalistic rhetoric in nonauthoritative media and in Chinese blogs, even if not representing official Chinese policy, would nevertheless signal pressure on the Chinese leadership to defend Chinese
interests. Similar warning indicators should be tracked in Vietnam and the Philippines that might signal a hardening of those countries' positions. Tactical warning signals that indicate heightened risk of a potential clash in a specific
time and place include commercial notices and preparations, diplomatic and/or military statements warning another claimant to cease provocative activities or suffer the consequences, military exercises designed to intimidate another
claimant, and ship movements to disputed areas. As for an impending incident regarding U.S. surveillance activities, statements and unusual preparations by the PLA might suggest a greater willingness to employ more aggressive
means to intercept U.S. ships and aircraft. Implications for U.S. Interests The United States has significant political, security, and economic interests at stake if one of the contingencies should occur. Global rules and norms. The
United States has important interests in the peaceful resolution of South China Sea disputes according to international law. With the exception of China, all the claimants of the South China Sea have attempted to justify their claims
based on their coastlines and the provisions of UNCLOS. China, however, relies on a mix of historic rights and legal claims, while remaining deliberately ambiguous about the meaning of the "nine-dashed line" around the sea that is
drawn on Chinese maps. Failure to uphold international law and norms could harm U.S. interests elsewhere in the region and beyond. Ensuring freedom of navigation is another critical interest of the United States and other regional
states. Although China claims that it supports freedom of navigation, its insistence that foreign militaries seek advance permission to sail in its two-hundred-mile EEZ casts doubt on its stance. China's development of capabilities to
deny American naval access to those waters in a conflict provides evidence of possible Chinese intentions to block freedom of navigation in specific contingencies. Alliance security and regional stability. U.S. allies and friends around
the South China Sea look to the United States to maintain free trade, safe and secure sea lines of communication (SLOCs), and overall peace and stability in the region. Claimants and nonclaimants to land features and maritime waters
in the South China Sea view the U.S. military presence as necessary to allow decision-making free of intimidation. If nations in the South China Sea lose confidence in the United States to serve as the principal regional security
guarantor, they could embark on costly and potentially destabilizing arms buildups to compensate or, alternatively, become more accommodating to the demands of a powerful China. Neither would be in the U.S. interest. Failure to
reassure allies of U.S. commitments in the region could also undermine U.S. security guarantees in the broader Asia-Pacific region, especially with Japan and South Korea. At the same time, however, the United States must avoid
getting drawn into the territorial dispute—and possibly into a conflict—by regional nations who seek U.S. backing to legitimize their claims. Economic interests. Each year, $5.3 trillion of trade passes through the South China Sea;
U.S. trade accounts for $1.2 trillion of this total. Should a crisis occur, the diversion of cargo ships to other routes would harm regional economies as a result of an increase in insurance rates and longer transits. Conflict of any scale in
the South China Sea would hamper the claimants from benefiting from the South China's Sea's proven and potential riches. Cooperative relationship with China. The stakes and implications of any U.S.-China incident are far greater
than in other scenarios. The United States has an abiding interest in preserving stability in the U.S.-China relationship so that it can continue to secure Beijing's cooperation on an expanding list of regional and global issues and more
tightly integrate China into the prevailing international system. Preventive Options Efforts should continue to resolve the disputes over territorial sovereignty of the South China Sea's land features, rightful jurisdiction over the waters
and seabed, and the legality of conducting military operations within a country's EEZ, but the likelihood of a breakthrough in any of these areas is slim in the near term. In the meantime, the United States should focus on lowering the
risk of potential armed clashes arising from either miscalculation or unintended escalation of a dispute. There are several preventive options available to policymakers—in the United States and other nations—to avert a crisis and
conflict in the South China Sea. These options are not mutually exclusive. Support U.S.-China Risk-reduction Measures Operational safety measures and expanded naval cooperation between the United States and China can help to
reduce the risk of an accident between ships and aircraft. The creation of the Military Maritime Consultative Agreement (MMCA) in 1988 was intended to establish "rules of the road" at sea similar to the U.S.-Soviet Incidents at Sea
Agreement (INCSEA), but it has not been successful. Communication mechanisms can provide a means to defuse tensions in a crisis and prevent escalation. Political and military hotlines have been set up, though U.S. officials have
low confidence that they would be utilized by their Chinese counterparts during a crisis. An additional hotline to manage maritime emergencies should be established at an operational level, along with a signed political agreement
committing both sides to answer the phone in a crisis. Joint naval exercises to enhance the ability of the two sides to cooperate in counter-piracy, humanitarian assistance, and disaster relief operations could increase cooperation and
help prevent a U.S.-China conflict. Bolster Capabilities of Regional Actors Steps could be taken to further enhance the capability of the Philippines military to defend its territorial and maritime claims and improve its indigenous
domain awareness, which might deter China from taking aggressive action. Similarly, the United States could boost the maritime surveillance capabilities of Vietnam, enabling its military to more effectively pursue an anti-access and
area-denial strategy. Such measures run the risk of emboldening the Philippines and Vietnam to more assertively challenge China and could raise those countries' expectations of U.S. assistance in a crisis. Encourage Settlement of the
Sovereignty Dispute The United States could push for submission of territorial disputes to the International Court of Justice or the International Tribunal for the Law of the Sea for settlement, or encourage an outside organization or
mediator to be called upon to resolve the dispute. However, the prospect for success in these cases is slim given China's likely opposition to such options. Other options exist to resolve the sovereignty dispute that would be difficult,
but not impossible, to negotiate. One such proposal, originally made by Mark Valencia, Jon Van Dyke, and Noel Ludwig in Sharing the Resources of the South China Sea, would establish "regional sovereignty" over the islands in the
South China Sea among the six claimants, allowing them to collectively manage the islands, territorial seas, and airspace. Another option put forward by Peter Dutton of the Naval War College would emulate the resolution of the
71
dispute over Svalbard, an island located between Norway and Greenland. The Treaty of Spitsbergen, signed in 1920, awarded primary sovereignty over Svarlbard to Norway but assigned resource-related rights to all signatories. This
solution avoided conflict over resources and enabled advancement of scientific research. Applying this model to the South China Sea would likely entail giving sovereignty to China while permitting other countries to benefit from the
resources. In the near term, at least, such a solution is unlikely to be accepted by the other claimants. Promote Regional Risk-reduction Measures The Association of Southeast Asian Nations (ASEAN) and China agreed upon
multilateral risk-reduction and confidence-building measures in the 2002 Declaration on the Conduct of Parties in the South China Sea (DOC), but have neither adhered to its provisions (for example, to resolve territorial and
jurisdictional disputes without resorting to the threat or use of force) nor implemented its proposals to undertake cooperative trust-building activities. The resumption of negotiations between China and ASEAN after a hiatus of a
decade holds out promise for reinvigorating cooperative activities under the DOC. Multilaterally, existing mechanisms and procedures already exist to promote operational safety among regional navies; a new arrangement is
unnecessary. The United States, China, and all ASEAN members with the exception of Laos and Burma are members of the Western Pacific Naval Symposium (WPNS). Founded in 1988, WPNS brings regional naval leaders together
biennially to discuss maritime security. In 2000, it produced the Code for Unalerted Encounters at Sea (CUES), which includes safety measures and procedures and means to facilitate communication when ships and aircraft make
contact. There are also other mechanisms available such as the International Maritime Organization's Regulations for Preventing Collisions at Sea (COLREGS) and the International Civil Aviation Organization's rules of the air. In
addition, regional navies could cooperate in sea environment protection, scientific research at sea, search and rescue activities, and mitigation of damage caused by natural calamities. The creation of new dialogue mechanisms may
also be worth consideration. A South China Sea Coast Guard Forum, modeled after the North Pacific Coast Guard Forum, which cooperates on a multitude of maritime security and legal issues, could enhance cooperation through
information sharing and knowledge of best practices. The creation of a South China Sea information-sharing center would also provide a platform to improve awareness and communication between relevant parties. The informationsharing center could also serve as an accountability mechanism if states are required to document any incidents and present them to the center. Advocate Joint Development/Multilateral Economic Cooperation Resource cooperation is
another preventive option that is underutilized by claimants in the South China Sea. Joint development of petroleum resources, for example, could reduce tensions between China and Vietnam, and between China and the Philippines,
on issues related to energy security and access to hydrocarbon resources. Such development could be modeled on one of the many joint development arrangements that exist in the South and East China seas. Parties could also
cooperate on increasing the use of alternative energy sources in order to reduce reliance on hydrocarbons. Shared concerns about declining fish stocks in the South China Sea suggest the utility of cooperation to promote conservation
and sustainable development. Establishing a joint fisheries committee among claimants could prove useful. Fishing agreements between China and its neighbors are already in place that could be expanded into disputed areas to
encourage greater cooperation .
Clearly Convey U.S. Commitments The United States should avoid inadvertently
encouraging the claimants to engage in confrontational behavior. For example, Secretary of State Hillary Clinton's reference in
November 2011 to the South China Sea as the West Philippine Sea could have unintended consequences such as emboldening Manila to
antagonize China rather than it seeking to peacefully settle their differences.
Extinction
Lieven 12 (Anatol, Professor in the War Studies Department – King’s College (London), Senior
Fellow – New America Foundation (Washington), “Avoiding US-China War,” New York Times,
6-12, http://www.nytimes.com/2012/06/13/opinion/avoiding-a-us-china-war.html)
Relations between the United States and China are on a course that
may one day lead to war . This month,
Defense Secretary Leon Panetta announced that by 2020, 60 percent of the U.S. Navy will be deployed in the Pacific. Last November, in
Australia, President Obama announced the establishment of a U.S. military base in that country, and threw down an ideological gauntlet to China
with his statement that the United States will “continue to speak candidly to Beijing about the importance of upholding international norms and
respecting the universal human rights of the Chinese people.” The dangers inherent in present developments in American, Chinese and regional
policies are set out in “The China Choice: Why America Should Share Power,” an important forthcoming book by the Australian international
affairs expert Hugh White. As he writes, “Washington and Beijing are already sliding toward rivalry by default.” To escape this, White makes a
strong argument for a “concert of powers” in Asia, as the best — and perhaps only — way that this looming confrontation can be avoided. The
economic basis of such a U.S.-China agreement is indeed already in place. The danger of conflict does not stem from a Chinese desire for global
leadership. Outside East Asia, Beijing is sticking to a very cautious policy, centered on commercial advantage without military components, in
part because Chinese leaders realize that it would take decades and colossal naval expenditure to allow them to mount a global challenge to the
United States, and that even then they would almost certainly fail. In East Asia, things are very different. For most of its history, China has
dominated the region. When it becomes the largest economy on earth, it will certainly seek to do so. While China cannot build up naval
forces to challenge the United States in distant oceans, it would be very surprising if in future it will not be able to
generate missile and air forces sufficient to deny the U.S. Navy access to the seas around China . Moreover, China is
engaged in territorial disputes with other states in the region over island groups — disputes in which Chinese popular
nationalist sentiments have become heavily engaged. With communism dead, the Chinese administration has relied very heavily —
and successfully — on nationalism as an ideological support for its rule. The problem is that if clashes erupt over these
islands, Beijing may find itself in a position where it cannot compromise
without severe damage to its
domestic legitimacy — very much the position of the European great powers in 1914. In these disputes, Chinese nationalism collides
with other nationalisms — particularly that of Vietnam, which embodies strong historical resentments. The hostility to China of Vietnam
and most of the other regional states is at once America’s greatest asset and greatest danger. It means that most of China’s neighbors
want the United States to remain militarily present in the region. As White argues, even if the United States were to withdraw, it
is highly unlikely that these countries would submit meekly to Chinese hegemony. But if the United States were to commit itself to a military
alliance with these countries against China, Washington would risk embroiling America in their territorial disputes. In the event of a military
clash between Vietnam and China, Washington would be faced with the choice of either holding aloof and seeing its credibility as an ally
destroyed, or fighting China. Neither the United States nor China would “win” the resulting war outright, but they would
certainly inflict
catastrophic damage on each other and on the world economy. If the conflict escalated into a
nuclear exchange , modern civilization would be wrecked . Even a prolonged period of military and
strategic rivalry with an economically mighty China will gravely weaken America’s global position . Indeed, U.S.
overstretch is already apparent — for example in Washington’s neglect of the crumbling states of Central America.
72
Independently – US-China clean tech cooperation solves warming
Lieberthal and Sandalow 9 (Kenneth, Visiting Fellow – Brookings Institution, Professor –
University of Michigan, and David, Senior Fellow – The Brookings Institution, January,
http://www.brookings.edu/~/media/research/files/reports/2009/1/climate%20change%20liebertha
l%20sandalow/01_climate_change_lieberthal_sandalow)
Climate change is an epic threat. Concentrations of greenhouse gases in the atmosphere are higher
than at any time in human history and rising sharply. Predicted consequences include sea-level rise,
more severe storms, more intense droughts and floods, forest loss and the spread of tropical disease. Each of
these phenomena is already occurring. Every year of delay in reducing greenhouse gas emissions puts the
planet at greater risk. The United States and China play central roles in global warming. During the past
century, the United States emitted more greenhouse gases than any other country—a fact often noted,
since carbon dioxide, the leading greenhouse gas, remains in the atmosphere for roughly 100 years. However, in 2007, China may have
surpassed the United States as the world’s top annual emitter of carbon dioxide. 1 Together, the two
countries are responsible for over 40% of the greenhouse gases released into the atmosphere each
year. For the world to meet the challenge of global warming, the United States and China must
each make the transition to a low-carbon economy. Far-reaching changes will be needed. To date, however, each
nation has used the other as one reason not do to more. Enormous benefits would be possible if
this dynamic were replaced with mutual understanding and joint efforts on a large scale. Yet cooperation will not be easy.
The U.S. and China are separated by different histories, different cultures, and different
perspectives. Opportunities for collaboration in fighting climate change and promoting clean energy are plentiful, but moving forward at
the scale needed will require high-level political support in two very different societies and systems that have considerable suspicion of the other.
The time for large-scale U.S.China cooperation on climate change and clean energy is now. Unless both countries change
course soon, ongoing investments in 20th century technologies will commit the world as a whole
to dangerous levels of greenhouse gases in the atmosphere in the decades ahead. Recent political and
technological developments make the benefits of such cooperation especially compelling.
Furthermore, thirty years after normalization and with the start of a new administration in the United States, the U.S. China
relationship is ready to move to a new stage. This new stage will initiate full bilateral
consultation and cooperation where possible on the most critical global issues of the era. Climate change and clean
energy are at the top of the list. This “new stage” does not envision a U.S.-China condominium or alliance. Any U.S.-China
This report identifies major barriers to cooperation and recommends ways to overcome them.
agreements must be supplements to—not substitutes for—other relationships and obligations. If handled properly, such agreements will increase
bilateral and global capacities to manage critical world challenges. The
major failing in U.S.-China relations to date is
that, despite much progress over the past 30 years, mutual distrust over each other’s long-term intentions
remains deep—and perhaps has even grown in recent years. By making active cooperation on critical global
issues a centerpiece of the relationship, both countries’ governments can increase trust over longterm intentions and thereby reduce the chances of slipping into mutual antagonism over the coming 1020 years. In particular, U.S.-China cooperation can make each side less inclined to point to the other as a
reason to do less at home to fight global warming. It can also contribute to the success of
multilateral climate change negotiations. Having the U.S. and China successfully manage issues that
have divided industrialized and developing countries in the global climate change negotiations can help shape acceptable
multilateral climate change agreements for the post-Kyoto period. Finally, U.S.-China cooperation on
73
climate change and clean energy can also help each country enhance its energy security and
pursue a sustainable economic path that will create jobs and promote economic recovery.
Extinction
Mazo 10 (Jeffrey Mazo – PhD in Paleoclimatology from UCLA, Managing Editor, Survival
and Research Fellow for Environmental Security and Science Policy at the International Institute
for Strategic Studies in London, 3-2010, “Climate Conflict: How global warming threatens
security and what to do about it,” pg. 122)
The best estimates for global warming to the end of the century range from 2.5-4.~C above pre-industrial levels, depending
on the scenario. Even in the best-case scenario, the low end of the likely range is 1 .goC, and in the worst 'business as usual'
projections, which actual emissions have been matching, the range of likely warming runs from 3.1--7.1°C. Even keeping emissions at
constant 2000 levels (which have already been exceeded), global temperature would still be expected to reach 1.2°C (O'9""1.5°C)above preindustrial levels by the end of the century."
Without early and severe reductions in emissions , the effects of
climate change in the second half of the twenty-first century are likely to be catastrophic for the stability and
security of countries in the developing world - not to mention the associated human tragedy. Climate change could even
undermine the strength and stability of emerging and advanced economies, beyond the knock-on effects on security
of widespread state failure and collapse in developing countries.' And although they have been condemned as melodramatic and
alarmist, many informed observers believe that unmitigated climate change beyond the end of the century could pose
an existential threat to civilisation ." What is certain is that there is no precedent in human experience for such rapid change
or such climatic conditions, and even in the best case adaptation to these extremes would mean profound social, cultural and political changes.
74
A2 China Won’t Purchase LNG
High Natural Gas demand ensures Chinese purchase of US LNG
McAllister 14 — Edward McAllister, journalist for reuters, 2014.(“ Exclusive: World buyers line up
to buy U.S. natural gas”, reuters, January 24, 2014, available at
http://www.reuters.com/article/2014/01/24/us-lng-sales-idUSBREA0N0XS20140124, accessed
on 7/2/14)
Countries across the world have been quietly signing deals in recent months to import
natural gas from the United States, revealing a growing appetite for the fuel overseas as
domestic output soars. Up to a dozen long-term deals, each worth billions of dollars, have
been penned behind closed doors with companies in China , Japan, Taiwan, Spain, France
and Chile as global demand spikes, according to company, industry and trade sources.
Through the agreements, China in particular has emerged as one of the biggest
beneficiaries of cheap American natural gas that in the coming years will be piped to Gulf
Coast plants and liquefied for shipment abroad in tankers. The unannounced deals, which
amount to about 2 percent of daily U.S. supply, are not the first of their kind, and they
depend on U.S. government approval to construct two new liquefied natural gas (LNG)
plants. But the number of new buyers, and their global scope, show how the United States
is taking steps to becoming a major export hub by stealing ahead of rivals in Australia and
East Africa, successfully wooing needy Asian buyers even before projects begin
construction. Global competition may squeeze profit margins on some exports of U.S. gas.
Companies like Britain's BP (BP.L) and France's GDF Suez (GSZ.PA), already committed to
taking LNG from the United States, are now finding multiple buyers willing to take
tranches of supply. "As we see more contracts getting signed, it's an indication that the U.S.
has really cheap natural gas that will help supply the global market," said Jason Bordoff,
Director at the Center on Global Energy Policy at Columbia University. The United States is
producing record amounts of natural gas thanks to a drilling boom, and more than a dozen
export projects have been proposed. But large domestic users of natural gas such as the
petrochemical industry are worried that unfettered exports could push prices higher at home. The
Obama administration has been approving exports on a case-by-case basis. So far, only four
projects are allowed to export across the globe and only one is under construction. Cheniere
Energy's (LNG.A) Sabine Pass project in Louisiana, expected to begin shipments late in 2015,
has sealed deals with importers in Europe and Asia over the past two years. This latest batch of
gas sales will be exported from Sempra Energy's (SRE.N) Cameron LNG plant in Louisiana and
the Freeport LNG plant in Texas, sources said. Both plants are expected to begin operations by
the end of the decade, pending approvals. Sempra is still waiting on permits to construct the
Cameron plant, and to export the gas to countries with which the U.S. does not have a free trade
agreement. Freeport has full export approval, but is yet to begin construction. THE DEALS
Securing buyers early can make or break an LNG project. Without buyers, a project will not
receive financial backing or be built. GDF Suez, which acquired export rights at Cameron
last year, has agreed to sell all of its 4 million tonnes per year of capacity to buyers in
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Japan, Taiwan, China and Chile, according to a review of deals confirmed by industry
sources. Japan's Mitsubishi (8058.T) and Mitsui (8031.T), also with export rights at
Cameron, have separately targeted major buyers such as Spain's Repsol (REP.MC),
France's Total (TOTF.PA) and Japanese utilities. Mitsubishi is to sell a significant chunk of
LNG to its own trading arm in Singapore. Sources said Japanese buyers were reluctant to commit
to large deals while the fate of its nuclear fleet remained uncertain after the 2011 Fukushima
disaster. Mitsubishi is also in talks with Indian Oil Corp. (IOC.NS) to sell 1 mtpa of LNG for its
planned terminal at Ennore in southern India, a company executive said. Exact volumes may be
adjusted. Sempra hopes to make a final investment decision to build the Cameron plant later this
year. Once that decision is made, the deals agreed by GDF Suez, Mitsui and Mitsubishi
automatically become formal sales agreements, industry sources said. The San Diego-based
company expects to win export approval from the U.S. Department of Energy before April.
Meanwhile, BP is in talks to export LNG from the Freeport plant to China National
Offshore Oil Corporation (CNOOC), giving the British company a foothold in the world's
largest energy consumer. This and older deals with other exporters will soon make China
one of the largest importers of U.S. gas. BP has a further deal to supply Japanese utility Tepco
with 0.5 mtpa, sources said. BP declined to comment. Mitsui and its prospective Japanese utility
customers Kansai Electric and Tohoku Electric also declined comment. For a full list of deals,
see table. More than 12 million tonnes per year (mtpa) of LNG would be exported from the
United States under the deals, or around 1.5 billion cubic feet per day of gas, though some
volumes may alter in final negotiations, sources said. U.S. daily production is about 70 billion
cubic feet. "These deals will send a signal that there is still strong demand for U.S. LNG
volumes," said Andres Rojas, analyst at Waterborne Energy in Houston. GDF was also in talks
with Thailand's PTT but these were abandoned after a failure to agree terms last year, a senior
PTT source said. Mitsui also broke off talks with South Korean importer GS Caltex, a source at
the company said.
China making LNG deals
West Australian 14 — The West Australian, the only locally edited daily newspaper published in
Perth, Western Australia, and is owned by ASX-listed Seven West Media (ASX: SWM). The West is
published in tabloid format, as is the state's other major newspaper, 2014. (“BP to sign $20 billion LNG
supply deal with China's CNOOC”, the west Australian, June 17, 2014, available at
https://au.news.yahoo.com/thewest/business/world/a/24259279/bp-to-sign-20-billion-lng-supplydeal-with-chinas-cnooc/, accessed on 7/2/14)
BP will sign a deal worth around $20 billion (11.78 billion pounds) on Tuesday to supply
China National Offshore Oil Corporation (CNOOC) with liquefied natural gas (LNG),
Chief Executive Bob Dudley said at a conference in Moscow. "It is a 20-year supply
agreement on LNG. It is a fair price for them and a fair price for us. It is a good bridge
between the UK and China in terms of trade," Dudley said. BP will likely source much of
the LNG from its U.S. export plant at Freeport, Texas, where it owns 3 million tonnes per
year (mtpa) of export capacity, having started negotiations with CNOOC earlier this year.
The deal, expected to boost China's LNG intake by at least 1.5 million tonnes per year, or
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about 26 cargoes, cements China's role as a key buyer of U.S. gas , industry sources said.
China has emerged as one of the biggest beneficiaries of cheap U.S. natural gas that in the
coming years will be piped to Gulf Coast plants and liquefied for shipment abroad in tankers.
China currently needs more LNG, the US should export to China
Lin 10 (Wensheng Lin, M.D., Ph.D. Assistant Professor, Department of Neuroscience, Institute
for Translational Neuroscience "LNG (liquefied natural gas): A necessary part in China's future
energy infrastructure"
http://www.sciencedirect.com/science/article/pii/S0360544209001583)SM
With the rapid economic development in Mainland China, its demand for energy supply is
also increasing at the rate of more than 10% per year. China relies heavily on its coal
supply, although natural gas consumption has been growing quickly in recent years. According to the data in Table 1, which is drawn from BP's statistical review
[1], the total fossil fuel consumption in China was 1491.1 Mtoe (million ton oil equivalent ) in
2006. The proportions of coal, oil, and natural gas were 73.2%, 23.5%, and 3.3%, respectively. Meanwhile, natural gas accounted for 26.9% of the world fossil fuel
Natural gas is a kind of clean and efficient energy resource. To ensure a cleaner
future, China has realized the importance of utilizing more natural gas. China has relatively abundant
reserves of natural gas. The reserves/production ratio of natural gas was 41.8 in 2006, compared to that of oil of 12.1, a very low ratio. Yet, China still
consumption.
needs more natural gas to fulfill its energy requirement.
According to an estimation [2], the natural gas consumption
will reach 100 bcm (billion cubic metre) and 200 bcm in 2010 and 2020, respectively, but the production will only reach 80 bcm and 120 bcm, respectively. This
means that about 20% and 40%, respectively, of the consumption will be imported. Besides, importation through pipelines from Russia and some from the Central
natural gas can also be imported in liquefied form known as liquefied natural gas
(LNG). Well purified and condensed, LNG is easily transported across the sea. Also from BP's
Asian countries,
statistical review [1], 28.2% of the international natural gas trade movement was in the form of LNG in 2006. Assuming the same proportion for China's import, 5.6
bcm and 22.6 bcm natural gas will have to be imported as LNG in 2010 and 2020, respectively. Considering the capacity of an LNG terminal is 3 Mt/a, it would mean
at least ten receiving
terminals need to be built by 2020. The LNG industry is relatively new in
China. To meet the increasing demand of natural gas, China needs to build about 10 large
LNG receiving terminals , and to import LNG at the level of more than 20 bcm per year by 2020. While small-scale LNG plants may sell out
their expensive LNG product, large-scale LNG receiving terminals must keep their purchasing price
below a reasonable level, say 6USD/MMBTU, to face the competition from piped natural gas and oil.
The future is clear. LNG, the clean, efficient, and safe energy resource, is definitely remain
as a necessary part in China's future energy infrastructure.
Russia China gas deal demonstrates China's need for American natural gas
Bennett 14 (Mia Bennett administers the Foreign Policy Association's Arctic Blog, and writes
about Arctic issues for Eye on the Arctic, a collaborative partnership between public and private
circumpolar media organizations. "China-Russia gas deal creates Arctic winners and losers"
http://www.adn.com/article/20140705/china-russia-gas-deal-creates-arctic-winners-and-losers)
SM
77
Reflecting the hype surrounding the potential for Russian energy exports to the east, bookings for the Sakhalin Oil and Gas conference,
It may be these resources in
sub-Arctic areas like Sakhalin that are developed thanks to the China-Russia gas deal -not yet the ones in the offshore Arctic. As Elizabeth Buchanan writes in the East Asia
Forum, the deal “allows for the delay in Sino–Russian exploration of offshore Arctic energy
reserves -- a challenging and environmentally hazardous endeavour, which will require
more time to develop the necessary technology. In the meantime, the large gas reserves in Eastern
Siberia and the Russian Far East can sooner be brought onstream.” So perhaps the biggest consequence
happening later this year in Yuzhno-Sakhalinsk, are already four times what they were last year.
of the China-Russia gas deal is increased development of subarctic oil and gas fields in the Russian Far East in the short term while setting a
precedent for cooperation between the two countries that can be expanded to the Arctic in the long term. With its still-booming economy ,
China is hungry for not just Russia’s oil and gas resources, but those of the wider Arctic
region, too . Several state-owned Chinese oil companies have interests in Arctic hydrocarbon development. CNPC has a 20 percent stake
in the Yamal project, which is in the Arctic. Once Yamal is up and running, during the summer months,
gas will be transported east along the Northern Sea Route to Asia in ice-class 7 LNG
tankers to be built by South Korean company Daewoo. In winter, the LNG will travel west
to Europe.
CNPC is also partnering with Rosneft to explore three fields in the Barents and Pechora Seas. And in Iceland, China National
Offshore Oil Corporation (CNOOC) is partnering with the country’s Eykon Energy to explore the Dreki oil field off the island’s northeast coast.
78
China Relations – A2: Resiliency/Energy Not Key
US-China can create the basis for broad cooperation now—our uniqueness
arguments prove this trend—BUT mismanagement of areas for competition
like energy security lead to a broader shift to confrontation—leads to war
Solomon 12 (Richard Solomon, president of United States Institute of Peace. He was assistant
secretary of state for East Asian and Pacific affairs from 1989 to 1992, 2/7/12,
www.beijingshots.com/2012/02/managing-us-china-ties/
Former US president Richard Nixon’s week-long visit to China in 1972 concluded with publication of the
Shanghai Communiqu, a unique joint political document that established the principles for
normalizing US-China relations. Looking back over four decades, it is clear that Nixon’s visit, and his
discussions with Chairman Mao and Premier Zhou Enlai, fundamentally changed the political dynamic
of the Cold War – to the benefit of the security of both countries. The Soviet Union was put on the
defensive, and the US and China began to dismantle their decades-long confrontation. The visit
represented one of the most dramatic and transforming diplomatic initiatives of the 20th century. Full
normalization of Sino-American relations was completed by former US president Jimmy Carter
and Deng Xiaoping in late 1978. This development made possible a dramatic advancement in
our bilateral relationship – especially in the economic and cultural realms. Where are US-China
relations today? Some have characterized them as “strategically ambiguous”. We are neither allies nor
adversaries. We have major areas of cooperation – especially in economic relations – but also significant
areas of competition and disagreement. We share common interest in national security and a stable
international environment; yet we have limited areas of cooperation and a significant measure of distrust. Our
relations today are in a contradictory state of opportunity and some antagonism. If our areas of disagreement are
not carefully managed, we could again become adversaries. Today, we can see that in the two decades
since the end of the Cold War the world has entered a new era. The great power conflicts and wars that
dominated the 20th century have given way to a time of international economic integration -involving both
mutual benefit and competition. Today, our security concerns are about regional interstate rivalries (the
Democratic People’s Republic of Korea and the Republic of Korea; India-Pakistan; Israel-Iran),
and weak states that permit the growth of terrorist groups. We work to prevent the proliferation of
nuclear weapons and to deal with the corrupting influence of narcotics cartels; and pirates capturing
ocean shipping for
ransom. And worldwide, ethnic and religious conflicts have replaced ideological rivalries as forces for political instability. As well, our security is affected by issues
that are not military in character: the integrity of our electronic systems – the brains and nerves of modern societies; dependable access to energy and other resources
necessary for economic development; and the humanitarian impact of global climate change, pandemic diseases, pollution of the environment, and natural disasters.
We are still learning how to deal with these challenges, especially where international cooperation is required. And then there is a new force creating political change
around the world: mass publics mobilized by the information revolution and social networking communications. In president Nixon’s time the relatively new
technology of television could be used to change public opinion “from the top down”.Today, the Internet and social networking media give people the ability to exert
political influence “from the bottom up”. History
shows that serious economic problems, and even many security concerns, can
be managed through determined diplomacy. Territorial disputes, however, are the kinds of issues that can lead to military confrontation – if not
war. One of the outcomes of the Nixon-Mao talks of the early 1970s – as noted earlier – was an agreement to defer resolution of Taiwan’s status in order to cooperate
on the strategic security challenge from the Soviet Union. Failure to manage Taiwan’s future relationship with the Chinese mainland peacefully is the most likely
source of a breakdown in the US-China relationship. Having said that, over
evolution in cross-Straits relations,
the past four decades there has been a remarkably positive
which have now evolved into increasingly constructive economic and social dealings between the island and the
mainland. There is open political communication between leaders in Taipei and Beijing, and a growing sense of common interest. What
can be done to
maximize the benefits of normal Sino-American relations – much less minimize prospects for a return to
confrontation? First is the necessity to vigorously confront the primary source of economic tension – the shared concern with “jobs, jobs, jobs”. In the Cold War
era, the shared strategic concern with the Soviet threat helped pull the two countries together. Today, the common concern with jobs tends to pull the countries apart,
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although the reality is that globalization has created enormous numbers of jobs in both countries. The specific issues currently on the bilateral economic agenda – as
noted earlier – affect jobs in both countries. There are a number of well-institutionalized bilateral and international fora and dispute-management procedures for
dealing with these issues – most notably the annual US-China Strategic and Economic Dialogue. Both the US and China need an open international trading
environment. And over time China will slowly make the transition from a development strategy of export-led growth to an economy with heightened domestic
household consumption. For its part, America has to invest more at home, do so intelligently, consume less, and generate the political will to manage, on a bipartisan
second element of managing the US-China relationship should be the construction of a
positive agenda of economic and security cooperation: energy security; access to raw materials; countering the proliferation of weapons
basis, our fiscal challenges. The
of mass destruction and terrorism; sea lane security; the impact of climate change and global health threats among other things. To conclude, Nixon called his visit to
China in 1972 “the week that changed the world”. Four decades later, it seems this was not an exaggeration. Or to go back even further in history, Napoleon was even
Only as
leaders in both Beijing and Washington work to develop the positive factors in the relationship – while managing
the areas of conflict – can they avoid the great costs that would come with a return to confrontation. This is the
more far-sighted in saying 200 years ago that China would “shake the world” when aroused from her “sleep”. China today is indeed “shaking the world”.
great contemporary challenge of managing US-China relations.
Energy competition is the only scenario for war
Leverett and Bader, 6 (Flynt Leverett, Brookings Middle East Policy Center Senior Fellow,
and Jeffrey Bader, Brookings China Initiative Director, 2006, Managing China-U.S. Energy
Competition in the Middle East," Winter 05-06, Washington Quarterly)
The bid by the China National Offshore Oil Corporation (CNOOC) to acquire Unocal earlier this
year triggered not only a hostile reaction in the U.S. Congress but also growing interest and
debate within the foreign policy community about the rapid growth in China’s energy demand and the
prospect for competition between the United States and China for access to global oil and gas resources .1 Henry
Kissinger has gone so far as to argue that competition over hydrocarbon resources will be the most likely
cause for international conflict in coming years.2 China’s hunt for oil is clearly influencing its foreign policy
toward its neighbors, such as Russia, Japan, and the Central Asian states, and toward regions as
far afield as sub-Saharan Af- rica and Latin America.3
As China seeks access to global
energy resources, its status as a rising power is already enabling it to exercise influence in ways
that make it more difficult for the United States and the West to achieve their goals on a number
of issues. The potentially explosive combination of a China less willing to passively accept U.S.
leadership and the prospect of competition between China and other states for control over vital energy
resources poses particularly critical challenges to U.S. interests in the Middle East.
Chinese engagement in the Middle East has expanded economically, politically, and strategically
over the last
several years. Since the late 1990s, Beijing’s policies toward the region have been closely linked
to the objec- tives of the three major, state-owned Chinese energy companies—the China
National Petroleum Corporation (CNPC), the China National Petrochemi- cal Corporation
(Sinopec), and CNOOC—to seek access to Middle East- ern oil and gas, frequently on an
exclusive basis. Since 2002, the Middle East has become the leading arena for Beijing’s efforts
to secure effective ownership of critical hydrocarbon resources, rather than relying solely on international markets to meet China’s energy import needs. There is every reason to anticipate that China
will continue and even intensify its emphasis on the Middle East as part of its energy security strategy. China will
likely keep working to expand its ties to the region’s energy exporters over the next several years
to ensure that it is not disadvantaged relative to other for- eign customers and to maximize its
access to hydrocarbon resources under any foreseeable circumstances, including possible
military conflict with the United States. It seems doubtful that Chinese energy companies’
fledgling efforts to lock up petroleum resources will succeed in keeping a critical mass of oil
80
reserves off an increasingly integrated and fluid global oil market. Nevertheless, China’s search for
oil is making it a new competitor to the United States for influence in the Middle East. If not managed prudently,
this competition will generate multiple points of bilateral friction and dam- age U.S. strategic interests in
the region.
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China Relations – A2: No Nuclear War
Goes nuclear
Glaser, Professor of Political Science and International Affairs – George Washington
University, ‘11
(Charles, “Will China’s Rise Lead to War?” Foreign Affairs Vol. 9 Iss. 2, March/April)
THE PROSPECTS for avoiding intense military competition and war may be good, but growth
in China's power may nevertheless require some changes in U.S. foreign policy that Washington
will find disagreeable--particularly regarding Taiwan. Although it lost control of Taiwan during
the Chinese Civil War more than six decades ago, China still considers Taiwan to be part of its
homeland, and unification remains a key political goal for Beijing. China has made clear that it will use force
if Taiwan declares independence, and much of China's conventional military buildup has been dedicated to
increasing its ability to coerce Taiwan and reducing the United States' ability to intervene. Because China
places such high value on Taiwan and because the United States and China--whatever they might
formally agree to--have such different attitudes regarding the legitimacy of the status quo, the
issue poses special dangers and challenges for the U.S.-Chinese relationship, placing it in a different category
than Japan or South Korea.
A crisis over Taiwan could fairly easily escalate to nuclear war, because each step along the way might
seem rational to the actors involved. Current U.S. policy is designed to reduce the probability that
well
Taiwan will declare independence and to make clear that the United States will not come to
Taiwan's aid if it does. Nevertheless, the United States would find itself under pressure to protect Taiwan
against any sort of attack, no matter how it originated. Given the different interests and perceptions of the various
parties and the limited control Washington has over Taipei's behavior, a crisis could unfold in which the United
States found itself following events rather than leading them.
Such dangers have been around for decades, but ongoing improvements in China's military capabilities
may make Beijing more willing to escalate a Taiwan crisis. In addition to its improved conventional
capabilities, China is modernizing its nuclear forces to increase their ability to survive and retaliate following a
large-scale U.S. attack. Standard deterrence theory holds that Washington's current ability to
destroy most or all of China's nuclear force enhances its bargaining position. China's nuclear
modernization might remove that check on Chinese action, leading Beijing to behave more boldly in
future crises than it has in past ones. A U.S. attempt to preserve its ability to defend Taiwan,
meanwhile, could fuel a conventional and nuclear arms race. Enhancements to U.S. offensive targeting
capabilities and strategic ballistic missile defenses might be interpreted by China as a signal of malign U.S.
motives, leading to further Chinese military efforts and a general poisoning of U.S.-Chinese
relations.
Highest probability—spike in relations causes war
Miller, assistant professor of international security studies – National Defense University,
12/16/’11
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(Paul, http://shadow.foreignpolicy.com/posts/2011/12/16/how_dangerous_is_the_world_part_ii)
China in 2011 is even
more clearly a danger equal to or greater than the danger it posed during the
Cold War. We went through two phases with China: from 1950 to 1972 the United States and
China were declared enemies and fought to a very bloody stalemate in the Sino-America battles
of the Korean War, but the overt hostility was less dangerous because of China's crippling
economic weakness. From 1972 to 1989, the U.S. and China lessened their hostility
considerably, but China's power also began to grow quickly as it liberalized its economy and
modernized its armed forces. In other words, in phase one, China was hostile but weak; in phase
two, more friendly but also more powerful. We have never faced a China that was both powerful
and hostile.
That is exactly the scenario that may be shaping up. China's economic and military modernization has
clearly made it one of the great powers of the world today, including nuclear weapons, a ballistic-missile
capability, and aspirations for a blue-water navy. At the same time, Chinese policymakers, like their
Russian counterparts, continue to talk openly about their intent to oppose American unipolarity, revise the
global order, and command a greater share of global prestige and influence. There are several flashpoints
where their revisionist aims might lead to conflict: Taiwan, the Korean Peninsula, the South China
Sea, etc. And U.S. relations with China are prone to regular downward spikes (as during the Tiananmen
Square Massacre in 1989, the 1996 cross-straits crisis, the accidental embassy bombing in 1999, the EP3
incident in 2001, the anti-satellite missile test in 2007, and the current trade and currency dispute, to say
nothing of our annual weapons sales to Taiwan). A militarized conflict with China is more likely
today, with greater consequences, than at almost any point since the Korean War.
Biggest internal link to escalation
Klare ’08 [Michael T. Klare, 5/1, Nation defense correspondent, is professor of peace and world
security studies at Hampshire College, The Nation, “The New Geopolitics of Energy”,
http://www.thenation.com/doc/20080519/klare/print]
These and other efforts
by Russia and China, combined with stepped-up US military aid to states in the region, are part of a larger,
though often hidden, struggle to control the flow of oil and natural gas from the Caspian Sea basin to markets in
Europe and Asia. And this struggle, in turn, is but part of a global struggle over energy. The great risk is that this struggle
will someday breach the boundaries of economic and diplomatic competition and enter the military realm . This will not
be because any of the states involved make a deliberate decision to provoke a conflict with a competitor--the leaders of all these countries know
that the price of violence is far too high to pay for any conceivable return. The problem, instead, is that all are engaging in behaviors that
make the outbreak of inadvertent escalation ever more likely. These include, for example, the deployment of growing
numbers of American, Russian and Chinese military instructors and advisers in areas of instability where there is
every risk that these outsiders will someday be caught up in local conflicts on opposite sides. This risk is made all
the greater because intensified production of oil, natural gas, uranium and minerals is itself a source of instability,
acting as a magnet for arms deliveries and outside intervention. The nations involved are largely poor, so whoever controls the
resources controls the one sure source of abundant wealth. This is an invitation for the monopolization of power by greedy elites who use control
over military and police to suppress rivals. The result, more often than not, is a wealthy strata of crony capitalists kept in power by brutal security
forces and surrounded by disaffected and impoverished masses, often belonging to a different ethnic group--a recipe for unrest and insurgency.
This is the situation today in the Niger Delta region of Nigeria, in Darfur and southern Sudan, in the uranium-producing areas of Niger, in
Zimbabwe, in the Cabinda province of Angola (where most of that country's oil lies) and in numerous other areas suffering from what's been
called the "resource curse." The danger, of course, is that the great powers will be sucked into these internal conflicts. This is not
a far-fetched scenario; the United States, Russia and China are already providing arms and military -support services to
factions in many of these disputes. The United States is arming government forces in Nigeria and Angola, China is aiding government forces in
Sudan and Zimbabwe, and so on. An even more dangerous situation prevails in Georgia, where the United States is backing the pro-Western
government of President Mikhail Saakashvili with arms and military support while Russia is backing the breakaway regions of Abkhazia and
83
South Ossetia. Georgia plays an important strategic role for both countries because it harbors the Baku-Tbilisi-Ceyhan (BTC) pipeline, a USbacked conduit carrying Caspian Sea oil to markets in the West. There are US and Russian military advisers/instructors in both areas, in some
cases within visual range of each other. It is not difficult, therefore, to conjure up scenarios in which a future blow-up between Georgian and
separatist forces could lead, willy-nilly, to a clash between American and Russian soldiers, sparking a much greater crisis.
84
China Relations – A2: China Threat Con
We turn the K – US aggressive policy is the reason for conflict – the plan
reverses US threat perceptions of China
Nathan 12 (Andrew J., “How China Sees America,” Foreign Affairs, Sept/Oct, 91(5), Ebsco)
The Sum of Beijing's Fears
"GREAT POWER" is a vague term, but China deserves it by any measure: the extent and strategic location of its territory, the size and dynamism of its population,
the value and growth rate of its economy, the massive size of its share of global trade, and the strength of its military. China has become one of a small number of
countries that have significant national interests in every part of the world and that command the attention, whether willingly or grudgingly, of every other country and
China's
rise has led to fears that the country will soon overwhelm its neighbors and one day supplant the United States as a
global hegemon. But widespread perceptions of China as an aggressive, expansionist power are off base. Although China's
relative power has grown significantly in recent decades, the main tasks of Chinese foreign policy are defensive and have not changed
much since the Cold War era: to blunt destabilizing influences from abroad, to avoid territorial losses, to reduce its
neighbors' suspicions, and to sustain economic growth. What has changed in the past two decades is that China is
now so deeply integrated into the world economic system that its internal and regional priorities have become part of
a larger quest: to define a global role that serves Chinese interests but also wins acceptance from other powers. Chief
among those powers, of course, is the United States, and managing the fraught U.S.-Chinese relationship is Beijing's
foremost foreign policy challenge. And just as Americans wonder whether China's rise is good for U.S. interests or represents a looming threat, Chinese
every international organization. And perhaps most important, China is the only country widely seen as a possible threat to U.S. predominance. Indeed,
policymakers puzzle over whether the United States intends to use its power to help or hurt China. Americans sometimes view the Chinese state as inscrutable. But
given the way that power is divided in the U.S. political system and the frequent power turnovers between the two main parties in the United States, the Chinese also
a long-term U.S. strategy seems to have emerged out of a
series of American actions toward China. So it is not a hopeless exercise -- indeed, it is necessary -- for the Chinese to try to
analyze the United States. Most Americans would be surprised to learn the degree to which the Chinese believe the United States is a revisionist power that
have a hard time determining U.S. intentions. Nevertheless, over recent decades,
seeks to curtail China's political influence and harm China's interests. This view is shaped not only by Beijing's understanding of Washington but also by the broader
Chinese view of the international system and China's place in it, a view determined in large part by China's acute sense of its own vulnerability. THE FOUR RINGS
THE WORLD as seen from Beijing is a terrain of hazards, beginning with the streets outside the policymaker's window, to land borders and sea-lanes thousands of
miles away, to the mines and oil fields of distant continents. These threats can be described in four concentric rings. In the first ring, the entire territory that China
administers or claims, Beijing believes that China's political stability and territorial integrity are threatened by foreign actors and forces. Compared with other large
countries, China must deal with an unparalleled number of outside actors trying to influence its evolution, often in ways the regime considers detrimental to its
survival. Foreign investors, development advisers, tourists, and students swarm the country, all with their own ideas about how China should change. Foreign
foundations and governments give financial and technical support to Chinese groups promoting civil society. Dissidents in Tibet and Xinjiang receive moral and
diplomatic support and sometimes material assistance from ethnic diasporas and sympathetic governments abroad. Along the coast, neighbors contest maritime
territories that Beijing claims. Taiwan is ruled by its own government, which enjoys diplomatic recognition from 23 states and a security guarantee from the United
States. At China's borders, policymakers face a second ring of security concerns, involving China's relations with 14 adjacent countries. No other country except
Russia has as many contiguous neighbors. They include five countries with which China has fought wars in the past 70 years (India, Japan, Russia, South Korea, and
Vietnam) and a number of states ruled by unstable regimes. None of China's neighbors perceives its core national interests as congruent with Beijing's. But China
seldom has the luxury of dealing with any of its neighbors in a purely bilateral context. The third ring of Chinese security concerns consists of the politics of the six
distinct geopolitical regions that surround China: Northeast Asia, Oceania, continental Southeast Asia, maritime Southeast Asia, South Asia, and Central Asia. Each of
these areas presents complex regional diplomatic and security problems. Finally, there is the fourth ring: the world far beyond China's immediate neighborhood. China
has truly entered this farthest circle only since the late 1990s and so far for limited purposes: to secure sources of commodities, such as petroleum; to gain access to
markets and investments; to get diplomatic support for isolating Taiwan and Tibet's Dalai Lama; and to recruit allies for China's positions on international norms and
legal regimes. INSCRUTABLE AMERICA IN
EACH of China's four security rings, the United States is omnipresent. It is the
most intrusive outside actor in China's internal affairs, the guarantor of the status quo in Taiwan, the largest naval presence in the
East China and South China seas, the formal or informal military ally of many of China's neighbors , and the primary framer
and defender of existing international legal regimes. This omnipresence means that China's understanding of American motives determines how the Chinese deal with
most of their security issues. Beginning with President Richard Nixon, who visited China in 1972, a succession of American leaders have assured China of their
goodwill. Every U.S. presidential administration says that China's prosperity and stability are in the interest of the United States. And in practice, the United States has
done more than any other power to contribute to China's modernization. It has drawn China into the global economy; given the Chinese access to markets, capital, and
technology; trained Chinese experts in science, technology, and international law; prevented the full remilitarization of Japan; maintained the peace on the Korean
Peninsula; and helped avoid a war over Taiwan. Yet Chinese policymakers are more impressed by policies and behaviors that they perceive as less benevolent. The
American military is deployed all around China's periphery, and the United States maintains a wide network of
defense relationships with China's neighbors. Washington continues to frustrate Beijing's efforts to gain control over
Taiwan. The United States constantly pressures China over its economic policies and maintains a host of government
and private programs that seek to influence Chinese civil society and politics. Beijing views this seemingly contradictory set of
American actions through three reinforcing perspectives. First, Chinese analysts see their country as heir to an agrarian, eastern strategic tradition that is pacifistic,
defense-minded, nonexpansionist, and ethical. In contrast, they see Western strategic culture -- especially that of the United States -- as militaristic, offense-minded,
expansionist, and selfish. Second, although China has embraced state capitalism with vigor, the Chinese view of the United States is still informed by Marxist political
thought, which posits that capitalist powers seek to exploit the rest of the world.
China expects Western powers to resist Chinese
85
competition for resources and higher-value-added markets . And although China runs trade
surpluses with the United States and holds a large amount of U.S. debt, China's leading political analysts believe the
Americans get the better end of the deal by using cheap Chinese labor and credit to live beyond their means. Third,
American theories of international relations have become popular among younger Chinese policy analysts, many of whom have earned advanced degrees in the United
States. The most influential body of international relations theory in China is so-called offensive realism, which holds that a country will try to control its security
environment to the full extent that its capabilities permit. According to this theory, the United States cannot be satisfied with the existence of a powerful China and
therefore seeks to make the ruling regime there weaker and more pro-American. Chinese analysts see evidence of this intent in Washington's calls for democracy and
its support for what China sees as separatist movements in Taiwan, Tibet, and Xinjiang. Whether they see the United States primarily through a culturalist, Marxist, or
realist lens, most Chinese strategists assume that a country as powerful as the United States will use its power to preserve and enhance its privileges and will treat
efforts by other countries to protect their interests as threats to its own security. This assumption leads to a pessimistic conclusion: as China rises, the United States
will resist. The United States uses soothing words; casts its actions as a search for peace, human rights, and a level playing field; and sometimes offers China genuine
assistance. But the United States is two-faced. It intends to remain the global hegemon and prevent China from growing strong enough to challenge it. In a 2011
interview with Liaowang, a state-run Chinese newsmagazine, Ni Feng, the deputy director of the Chinese Academy of Social Sciences' Institute of American Studies,
summed up this view. "On the one hand, the United States realizes that it needs China's help on many regional and global issues," he said. "On the other hand, the
United States is worried about a more powerful China and uses multiple means to delay its development and to remake China with U.S. values." A small group of
mostly younger Chinese analysts who have closely studied the United States argues that Chinese and American interests are not totally at odds. In their view, the two
countries are sufficiently remote from each other that their core security interests need not clash. They can gain mutual benefit from trade and other common interests.
But those holding such views are outnumbered by strategists on the other side of the spectrum, mostly personnel from the military and security agencies, who take a
dim view of U.S. policy and have more confrontational ideas about how China should respond to it. They believe that China must stand up to the United States
militarily and that it can win a conflict, should one occur, by outpacing U.S. military technology and taking advantage of what they believe to be superior morale
within China's armed forces. Their views are usually kept out of sight to avoid frightening both China's rivals and its friends. WHO IS THE REVISIONIST? TO
Although
U.S. intentions might be subject to interpretation, U.S. military, economic, ideological, and diplomatic capabilities
PEER more deeply into the logic of the United States' China strategy, Chinese analysts, like analysts everywhere, look at capabilities and intentions.
are relatively easy to discover -- and from the Chinese point of view, they are
potentially devastating . U.S.
military forces are globally deployed and technologically advanced, with massive concentrations of firepower all
around the Chinese rim. The U.S. Pacific Command (PACOM) is the largest of the United States' six regional combatant commands in terms of its
geographic scope and nonwartime manpower. PACOM'S assets include about 325,000 military and civilian personnel, along with some 180 ships and 1,900 aircraft.
To the west, PACOM gives way to the U.S. Central Command (CENTCOM), which is responsible for an area stretching from Central Asia to Egypt. Before
September 11, 2001, CENTCOM had no forces stationed directly on China's borders except for its training and supply missions in Pakistan. But with the beginning of
the "war on terror," CENTCOM placed tens of thousands of troops in Afghanistan and gained extended access to an air base in Kyrgyzstan. The operational
capabilities of U.S. forces in the Asia-Pacific are magnified by bilateral defense treaties with Australia, Japan, New Zealand, the Philippines, and South Korea and
cooperative arrangements with other partners. And to top it off, the United States possesses some 5,200 nuclear warheads deployed in an invulnerable sea, land, and
air triad. Taken together, this U.S. defense posture creates what Qian Wenrong of the Xinhua News Agency's Research Center for International Issue Studies has
called a "strategic ring of encirclement." Chinese security analysts also take note of the United States' extensive capability to damage Chinese economic interests. The
United States is still China's single most important market, unless one counts the European Union as a single entity. And the United States is one of China's largest
sources of foreign direct investment and advanced technology. From time to time, Washington has entertained the idea of wielding its economic power coercively.
After the 1989 Tiananmen Square crackdown, the United States imposed some limited diplomatic and economic sanctions on China, including an embargo, which is
still in effect, on the sale of advanced arms. For several years after that, Congress debated whether to punish China further for human rights violations by canceling the
low most-favored-nation tariff rates enjoyed by Chinese imports, although proponents of the plan could never muster a majority. More recently, U.S. legislators have
proposed sanctioning China for artificially keeping the value of the yuan low to the benefit of Chinese exporters, and the Republican presidential candidate Mitt
Romney has promised that if elected, he will label China a currency manipulator on "day one" of his presidency. Although trade hawks in Washington seldom prevail,
flare-ups such as these remind Beijing how vulnerable China would be if the United States decided to punish it economically. Chinese
strategists believe
that the United States and its allies would deny supplies of oil and metal ores to China during a military or economic
crisis and that the U.S. Navy could block China's access to strategically crucial sea-lanes. The ubiquity of the dollar
in international trade and finance also gives the United States the ability to damage Chinese interests, either on
purpose or as a result of attempts by the U.S. government to address its fiscal problems by printing dollars and
increasing borrowing, acts that drive down the value of China's dollar-denominated exports and foreign exchange
reserves. Chinese analysts also believe that the United States possesses potent ideological weapons and the
willingness to use them. After World War II, the United States took advantage of its position as the dominant power to enshrine American principles in the
Universal Declaration of Human Rights and other international human rights instruments and to install what China sees as Western-style democracies in Japan and,
eventually, South Korea, Taiwan, and other countries. Chinese officials contend that the United States uses the ideas of democracy and human rights to delegitimize
and destabilize regimes that espouse alternative values, such as socialism and Asian-style developmental authoritarianism. In the words of Li Qun, a member of the
Shandong Provincial Party Committee and a rising star in the Communist Party, the Americans' "real purpose is not to protect so-called human rights but to use this
pretext to influence and limit China's healthy economic growth and to prevent China's wealth and power from threatening [their] world hegemony." In
the eyes
of many Chinese analysts, since the end of the Cold War the United States has revealed itself to be a revisionist
power that tries to reshape the global environment even further in its favor. They see evidence of this reality
everywhere: in the expansion of NAT O; the U.S. interventions in Panama, Haiti, Bosnia, and Kosovo; the Gulf War; the war in Afghanistan; and the
invasion of Iraq. In the economic realm, the United States has tried to enhance its advantages by pushing for free trade, running down the value of the dollar while
forcing other countries to use it as a reserve currency, and trying to make developing countries bear an unfair share of the cost of mitigating global climate change.
And perhaps
most disturbing to the Chinese, the United States has shown its aggressive designs by promoting socalled color revolutions in Georgia, Ukraine, and Kyrgyzstan. As Liu Jianfei, director of the foreign affairs division of the Central Party
School of the Chinese Communist Party, wrote in 2005, "The U.S. has always opposed communist 'red revolutions' and hates the 'green revolutions' in Iran and other
86
Islamic states. What it cares about is not 'revolution' but 'color.' It supported the 'rose,' 'orange', and 'tulip' revolutions because they served its democracy promotion
strategy." As Liu and other top Chinese analysts see it, the United States hopes "to spread democracy further and turn the whole globe 'blue.'"
87
China K2 Solve Warming
China uniquely key to mitigating the effects of warming
Atkin 14 — Emily Atkin, a reporter for Climate Progress. She is a native of New York’s Hudson
Valley, and holds a B.A. in Journalism from the State University of New York at New Paltz. Before
joining the team at American Progress, she worked as a news-gatherer and reporter covering litigation and
policy for the legal newswire Law360. Emily has also held internships with the New York Observer, the
Legislative Gazette and investigative reporter Wayne Barrett, 2014.(“ Stopping Climate Change ‘Almost
Impossible’ If China Can’t Quit Coal, Report Says”, Think Progress, May 12, 2014, available at
http://thinkprogress.org/climate/2014/05/12/3436673/coal-dependent-china/, accessed on 7/2/14)
If China doesn’t begin to limit its coal consumption by 2030, it will be “almost impossible”
for the world avoid a situation where global warming stays below 2°C, a new study released
Monday found. The study, led by the U.K.’s Center for Climate Change Economics and Policy
and the Grantham Research Institute on Climate Change and the Environment, recommends
China put a cap on greenhouse gas emissions from coal by 2020, and then swiftly reduce its
dependency on the fossil fuel. The reductions would not only increase public health and
wellness and decrease climate change, but could also “have a major positive effect on the
global dynamics of climate cooperation,” the report said. “The actions China takes in the
next decade will be critical for the future of China and the world,” the study said. “Whether
China moves onto an innovative, sustainable and low-carbon growth path this decade will
more or less determine both China’s longer-term economic prospects in a natural resourceconstrained world, … and the world’s prospects of cutting greenhouse gas emissions
sufficiently to manage the grave risks of climate change.” The general question surrounding
the prevention of climate change is whether the earth can avoid a 2°C situation — that is,
whether we can reduce greenhouse gas emissions swiftly enough to keep global average surface
temperatures from rising to 2°C (3.6°F) above pre-industrial levels. World leaders, including
China, agreed to avoid that 2°C situation in 2009 by signing the Copenhagen Accord in 2009, a
three-page nonbinding pledge to fight climate change. In 2011, one-fifth of the world’s total
fossil fuel carbon dioxide emissions came solely from China’s coal, and coal was
responsible for more than 80 percent of the country’s 8 gigatons of fossil fuel emissions that
year. But despite increasing calls for China to reduce its coal-burning — not only because
of climate impacts but because of infamous, choking air pollution — it has been unclear
whether the country has made enough effort to actually make a dent in its consumption.
The country has taken steps to replace thousands of small-scale coal mines with large ones, and
its largest cities have pledged to make drastic reductions in emissions. However, a Chinese
government report recently found that only a tiny fraction of Chinese cities fully complied with
pollution standards in 2013, while approving the construction of more than 100 million tonnes of
new coal production capacity in 2013, according to a Reuters report. “Coal, in absolute terms, is
growing in China,” Fergus Green, one of the authors of the study, told ThinkProgress. “But its
share of electricity is declining as other sources of electricity take up additional shares of
capacity. So we see absolute growth, but signs of serious moderation.” Green, who co-authored
the study along with London School of Economics scholar Nicholas Stern, said the effort was
88
less of an empirical game to try to predict what would happen in China, and more of a
recommendation for how the country could realistically reduce its emissions and how those
reductions would benefit the country and the world. The paper, he said, was a response to
indications from China’s leadership that it is looking to transform growth models to be more
efficient over the coming years. “One doesn’t just go to China and tell them what they should do,
but there are serious discussions that are happening in China about when their coal consumption
will peak,” he said. “Really what we’re saying is that there are strong benefits for China and
for the world in terms of greenhouse gas mitigation if China were to peak at the early end
of 2020.” Green noted that one of the less obvious benefits of China peaking its coal production
would be the catalyzing effect it would have on other countries’ efforts to combat climate
change. With China as the world’s largest emitter of greenhouse gases, politicians in other
countries — including the United States — have made the argument that nothing they do can
actually stop climate change from happening. “If other countries, particularly the United States,
can see that China is serious about declining its consumption, it could be potentially a tipping
point that does stimulate more ambitious action from other countries,” Green said. “We could
actually get an international agreement.” However, if China does not become serious about
reducing its coal consumption soon, the chances of climate change mitigation become lower
and lower. “If China goes beyond 15 gigatons of carbon emissions by 2030, then
[mitigation] would be almost impossible,” Green said. “The longer you delay, the more
faster the decline has to be, and the more implausible that becomes.”
89
Japan
90
Japan – 1AC
Scenario
: Japan
LNG exports will go to East Asia – it’s economical and helps meet growing
demand
Ebinger et al 12 (Charles, Senior Fellow and Director of the Energy Security Initiative –
Brookings, Kevin Massy, Assistant Director of the Energy Security Initiative – Brookings, and
Govinda Avasarala, Senior Research Assistant in the Energy Security Initiative – Brookings,
“Liquid Markets: Assessing the Case for U.S. Exports of Liquefied Natural Gas,” Brookings
Institution, Policy Brief 12-01,
http://www.brookings.edu/~/media/research/files/reports/2012/5/02%20lng%20exports%20ebing
er/0502_lng_exports_ebinger.pdf)
Owing to growing gas demand, limited domestic supply, and a more rigid and expensive pricing structure, Asia
represents a near-to-medium term opportunity for natural gas exports from the United States. The expansion of the
Panama Canal by 2014 will allow for LNG tankers to traverse the isthmus, thereby improving the economics of U.S.
Gulf Coast LNG shipments to East and South Asian markets. This would make U.S. exports competitive with future
Middle Eastern and Australian LNG exports to the region. However, challenges and uncertainties remain on both the demand and
supply side. The development of indigenous unconventional gas in China or India may occur at a faster rate than currently forecast, dampening
demand for LNG imports to the region. A change in sentiment in Japan may see nuclear power restarted at a greater rate than currently
anticipated; alternately, a greater-than-expected penetration of coal in the Japanese electricity sector would suppress gas demand. A change in the
cost of Australian LNG production or a reversal of the Qatari moratorium on gas development could disrupt the current supply projections, as
could the discovery of new conventional or unconventional resources. For instance, on December 29, 2010, Noble Energy, a U.S. oil and gas
exploration company, discovered between 14 and 20 tcf of gas in Israel’s offshore Leviathan gas field. Since then, other nations on the Eastern
Mediterranean are exploring for potentially similarly large gas fields. A number of large natural gas discoveries in Mozambique have also
prompted early interest in building significant liquefaction capacity in the Southeastern African nation. The high quality (low sulfur and carbondioxide content) and liquid-rich nature of Mozambican gas may make this resource a significant competitor in global LNG markets in the
medium term. Finally, the expansion of LNG export capacity from Alaska and the development of LNG export capacity in Western
Canada may provide a source of strong competition for U.S. Gulf-coast origin LNG. Although Alaska’s Kenai LNG export facility, which has
been exporting small quantities of LNG to Northeast Asia for over 40 years, has been idled temporarily, some companies have
demonstrated interest in large-scale exports of LNG from Alaska to East Asia. On March 30, 2012, ExxonMobil, along with
its project partners BP and ConocoPhillips, settled a dispute with the Government of Alaska to develop its gas re- sources at Prudhoe Bay. The
gas from this field is expected to travel from Alaska’s North Slope to Valdez on Alaska’s southern coast, where it will
be liquefied and exported.67 According to FERC, there are currently three Canadian export facilities under consideration in British Columbia: a
proposed 1.4 bcf/day terminal at Kitimat (initial production would start at 0.7 bcf/day), which received a 20-year export license in October 2011;
a proposed 0.25 bcf/day facility at Douglas Island; and a potential 1 bcf/day facility at Prince Rupert Island. Given the lower transportation costs
(as a result of the shorter distance), Alaskan and West Canadian exports may prove to be a source of strong competition at the margin for U.S.
LNG in the Pacific Basin.
LNG exports solidify America’s reliability as a partner on energy issues –
that’s key to US-Japan relations
Cronin et al 12 (Dr. Patrick, Senior Advisor and Senior Director of the Asia-Pacific Security
Program – Center for a New American Security, Paul S. Giarra, President of Global Strategies &
Transformation, Zachary M. Hosford, Research Associate – Center for a New American
Security, Daniel Katz, Researcher – Center for a New American Security, “The China Challenge:
Military, Economic and Energy Choices Facing the US-Japan Alliance,” April, CNAS,
http://www.cnas.org/files/documents/publications/CNAS_TheChinaChallenge_Cronin_0.pdf)
Although energy
security has long been an issue for the alliance, a new combination of global energy trends and
geopolitical realities will raise the issue to
unprecedented levels of importance
in coming decades. Whereas an
91
abundant supply of cheap energy underpinned tremendous post- World War II economic growth, future
energy supplies are unlikely to be as
affordable. Acquiring the right mix of energy sources to maintain sufficient economic productivity – while ensuring a gradual transition away
from fossil fuels to renewable sources of energy – will be one of the most complex challenges for the alliance in this century. Indeed, the
means by which the United States and Japan seek to secure their own energy supplies in a complicated geopolitical environment, respond to the enormous and
increasing energy demands of a re-emerging China, and address the future of the development and implementation of civilian nuclear power at home and abroad will
have huge implications for the alliance. In the midst of U.S. and Japanese efforts to address their own energy security issues, global demand for energy is increasing at
a rapid rate. Total world energy use during the 2010 to 2025 time frame is projected to increase by nearly 30 percent, with China and India accounting for 50 percent
of that growth.63 Meanwhile, many countries around the globe depend increasingly on Middle Eastern oil, despite its susceptibility to disruption. Further instability in
Global
natural gas production is increasing, however, shifting currency and power flows to new areas. At the same time, demand for
the Middle East would likely pose a “major geo-strategic stability threat” to the United States, with the potential for cascading economic effects.64
nuclear power has bifurcated – growing strongly throughout the developing world, while reaching an inflection point in both the United States and Japan – with as-yet
unknown consequences. Both the United States and Japan are undergoing internal debates on energy strategy, and there is no consensus among leaders in either
country. To increase economic productivity, Japan will have to craft a new energy policy. Following the March 11, 2011, partial meltdowns of
three nuclear reactors at the Fukushima Dai-ichi power plant and the subsequent release of radiation, the Japanese people and government have indicated that civilian
nuclear power might play a reduced role in the country’s future energy mix. However, any increased reliance on fossil fuels that might result from that decision will
make Japan more vulnerable to supply disruptions and price spikes. Previous
disturbances in the global energy market have prompted
many countries – including Japan – to seek some guarantee of energy supplies outside traditional market mechanisms , including
investing in upstream oil production overseas, even if financial logic would dictate otherwise. Meanwhile, the Japanese population favors increased investment in
renewable energy sources, which are not yet sufficiently affordable to be a viable alternative. Japan: Running Out of Power and Time Japan suffered from its reliance
on foreign energy following the oil crises of 1973 and 1979. Although these supply disruptions led to massive growth of the domestic nuclear power industry, Japan
continues to be the world’s largest importer of liquefied natural gas (LNG) , with 90 percent of its supply originating overseas. In
addition, Japan is the world’s second-largest importer of coal – all of which comes from abroad – and the third-largest importer of oil.65 Reliance on energy imports
results in extremely low energy self-sufficiency (18 percent) compared with either the United States (75 percent) or China (94 percent).66 Although the nature of the
global energy market offers some insulation because of supply-and-demand dynamics, Japanese reliance on imported energy also leaves the country more vulnerable
to shocks. In
a nation that already relies heavily on imported energy, the Fukushima nuclear disaster complicated the
country’s long-term strategy of cultivating domestic energy sources. With much of the population wary of nuclear power following the
radiation leaks and inaccurate government statements during the disaster, Japan’s efforts to diversify and secure its energy sources have
lost public support. The United States also finds itself in the midst of a heated debate over energy security. The nation consumes large amounts of energy, and
Americans are showing frustration with rising gas prices. There continues to be support for a shift to renewable energy sources, but these sources – including solar,
technological advances
have increased the projected amounts of recoverable oil and natural gas on U.S. land and in its surrounding waters. However, the
widely publicized 2010 Deepwater Horizon oil spill in the Gulf of Mexico and reports of contaminated water sources as a result of the
natural gas extraction method known as hydraulic fracturing have mobilized opponents against increases in domestic drilling.
wind, biomass and geothermal power– remain costly and have not yet reached the level of economic competitiveness. Meanwhile,
Nonetheless, the picture is somewhat rosier for the United States than for Japan. Although the United States, like many industrialized countries, is witnessing a
relative plateau in its overall energy demand, its energy consumption from primary fuel is expected to rise from 98.2 quadrillion Btu (British thermal units) in 2010 to
108.0 quadrillion Btu in 2035.67 Largely as a result of advances in recovering shale gas – natural gas trapped in shale formations, only recently made cost-effective to
extract – the United States is projected to become a net LNG exporter by 2016, a net pipeline exporter by 2025 and an overall net natural gas exporter by 2021.68 The
United States is also poised to increase its crude oil production from 5.5 million barrels per day in 2010 to 6.7 million barrels per day in 2020.69 The apparent move
away from nuclear power in Japan following the Fukushima reactor meltdowns, together with the shale gas revolution in the United States, is shifting the energy
security environment. Currently, Japan
harbors concerns about the reliability of future U.S. energy supplies, which may
be influenced by “shifting political winds in American energy policy.”70 Thus, the United States could help reduce the
volatility of Japanese fossil fuel imports – which appear set to remain high – by providing a stable source of natural gas. However,
if the allies fail to consult on this issue,
they could drift apart , thereby missing an opportunity to
strengthen the alliance .
Alliance solves multiple threats --- escalates to global nuclear war.
Gates 11 (Robert, U.S. Secretary of Defense, “U.S.-Japan Alliance a Cornerstone of Asian
Security”, Speech to Keio University, 1-14,
http://www.defense.gov/speeches/speech.aspx?speechid=1529)
U.S.-Japan alliance has succeeded at its original core purpose – to deter
military aggression and provide an umbrella of security under which Japan – and the region – can
prosper. Today, our alliance is growing deeper and broader as we address a range of security challenges in Asia.
Some, like North Korea, piracy or natural disasters , have been around for decades, centuries, or since the beginning of time.
Others, such as global terrorist networks, cyber attacks, and nuclear proliferation are of a more recent vintage.
Over the course of its history, the
92
issues have in common is that they all require multiple nations working together – and they also almost
always require leadership and involvement by key regional players such as the U.S. and Japan. In turn, we express
What these
our shared values by increasing our alliance’s capacity to provide humanitarian aid and disaster relief, take part in peace-keeping operations, protect the global commons, and promote
cooperation and build trust through strengthening regional institutions. Everyone gathered here knows the crippling devastation that can be caused by natural disasters – and the U.S. and Japan,
along with our partners in the region, recognize that responding to these crises is a security imperative. In recent years, U.S. and Japanese forces delivered aid to remote earthquake-stricken
regions on Indonesia, and U.S. aircraft based in Japan helped deliver assistance to typhoon victims in Burma. We worked together in response to the 2004 Indian Ocean tsunami, earthquakes in
Java, Sumatra, and Haiti, and most recently following the floods in Pakistan. These efforts have demonstrated the forward deployment of U.S. forces in Japan is of real and life-saving value.
They also provide new opportunities for the U.S. and Japanese forces to operate together by conducting joint exercises and missions. Furthermore, U.S. and Japanese troops have been working
on the global stage to confront the threat of failed or failing states. Japanese peacekeepers have operated around the world, including the Golan Heights and East Timor and assisted with the
reconstruction of Iraq. In Afghanistan, Japan represents the second largest financial donor, making substantive contributions to the international effort by funding the salaries of the Afghan
National Police and helping the Afghan government integrate former insurgents. Japan and the United States also continue to cooperate closely to ensure the maritime commons are safe and
secure for commercial traffic. Our maritime forces work hand-in-glove in the Western Pacific as well as in other sea passages such as the Strait of Malacca between Malaysia and Indonesia,
where more than a third of the world’s oil and trade shipments pass through every year. Around the Horn of Africa, Japan has deployed surface ships and patrol aircraft that operate alongside
those from all over the world drawn by the common goal to counter piracy in vital sea lanes. Participating in these activities thrusts Japan’s military into a relatively new, and at times sensitive
role, as an exporter of security. This is a far cry from the situation of even two decades ago when, as I remember well as a senior national security official, Japan was criticized for so-called
“checkbook diplomacy” – sending money but not troops – to help the anti-Saddam coalition during the First Gulf War. By showing more willingness to send self-defense forces abroad under
international auspices – consistent with your constitution – Japan is taking its rightful place alongside the world’s other great democracies. That is part of the rationale for Japan’s becoming a
we must use the strong
U.S.-Japanese partnership as a platform to do more to strengthen multilateral institutions – regional
permanent member of a reformed United Nations Security Council. And since these challenges cannot be tackled through bilateral action alone,
arrangements that must be inclusive, transparent, and focused on results. Just a few months ago, I attended the historic first meeting of the
ASEAN Plus Eight Defense Ministers Meeting in Hanoi, and am encouraged by Japan’s decision to co-chair the Military Medicine Working
Group. And as a proud Pacific nation, the United States will take over the chairmanship of the Asia Pacific Economic Cooperation Forum this
year, following Japan’s successful tenure. Working through regional and international forums puts our alliance in the best position to confront
some of Asia’s toughest security challenges. As we have been reminded once again in recent weeks, none has proved to be more vexing and
enduring than North Korea. Despite the hopes and best efforts of the South Korean government, the U.S. and our allies, and the international
community, the character and priorities of the North Korean regime sadly have not changed. North Korea’s ability to launch another conventional
ground invasion is much degraded from even a decade or so ago, but in other respects it has grown more lethal and destabilizing. Today, it is
North Korea’s pursuit of nuclear weapons and proliferation of nuclear know-how and ballistic missile equipment
that have focused our attention – developments that threaten not just the peninsula, but the Pacific Rim and
international stability as well. In response to a series of provocations – the most recent being the sinking of the Cheonan and North Korea’s lethal shelling of a South Korean
island – Japan has stood shoulder to shoulder with the Republic of Korea and the United States. Our three countries continue to deepen our ties through the Defense Trilateral Talks – the kind of
multilateral engagement among America’s long-standing allies that the U.S. would like to see strengthened and expanded over time. When and if North Korea’s behavior gives us any reasons to
believe that negotiations can be conducted productively and in good faith, we will work with Japan, South Korea, Russia, and China to resume engagement with North Korea through the six
party talks. The first step in the process should be a North-South engagement. But, to be clear, the North must also take concrete steps to honor its international obligations and comply with U.N.
Security Council Resolutions. Any progress towards diffusing the crisis on the Korean Peninsula must include the active support of the People’s Republic of China – where, as you probably
know, I just finished an official visit. China has been another important player whose economic growth has fueled the prosperity of this part of the world, but questions about its intentions and
opaque military modernization program have been a source of concern to its neighbors. Questions about China’s growing role in the region manifest themselves in territorial disputes – most
recently in the incident in September near the Senkaku Islands, an incident that served as a reminder of the important of America’s and Japan’s treaty obligations to one another. The U.S.
position on maritime security remains clear: we have a national interest in freedom of navigation; in unimpeded economic development and commerce; and in respect for international law. We
also believe that customary international law, as reflected in the UN Convention on the Law of the Sea, provides clear guidance on the appropriate use of the maritime domain, and rights of
access to it. Nonetheless, I disagree with those who portray China as an inevitable strategic adversary of the United States. We welcome a China that plays a constructive role on the world stage.
In fact, the goal of my visit was to improve our military-to-military relationship and outline areas of common interest. It is precisely because we have questions about China’s military – just as
they might have similar questions about the United States – that I believe a healthy dialogue is needed. Last fall, President Obama and President Hu Jin Tao made a commitment to advance
sustained and reliable defense ties, not a relationship repeatedly interrupted by and subject to the vagaries of political weather. On a personal note, one of the things I learned from my experience
dealing with the Soviet Union during my earlier time in government was the importance of maintaining a strategic dialogue and open lines of communication. Even if specific agreements did not
result – on nuclear weapons or anything else – this dialogue helped us understand each other better and lessen the odds of misunderstanding and miscalculation. The Cold War is mercifully long
over and the circumstances with China today are vastly different – but the importance of maintaining dialogue is as important today. For the last few minutes I’ve discussed some of the most
pressing security challenges – along with the most fruitful areas of regional cooperation – facing the U.S. and Japan in Asia. This environment – in terms of threats and opportunities – is
markedly different than the conditions that led to the forging of the U.S-Japan defense partnership in the context of a rivalry between two global superpowers. But on account of the scope,
complexity and lethality of these challenges, I would argue that our alliance is more necessary, more relevant, and more important than ever. And maintaining the vitality and credibility of the
alliance requires modernizing our force posture and other defense arrangements to better reflect the threats and military requirements of this century. For example, North Korea’s ballistic missiles
– along with the proliferation of these weapons to other countries – require a more effective alliance missile defense capability. The U.S.-Japan partnership in missile defense is already one of the
most advanced of its kind in the world. It was American and Japanese AEGIS ships that together monitored the North Korean missile launches of 2006 and 2008. This partnership –which relies
on mutual support, cutting edge technology, and information sharing – in many ways reflect our alliance at its best. The U.S. and Japan have nearly completed the joint development of a new
advanced interceptor, a system that represents a qualitative improvement in our ability to thwart any North Korean missile attack. The co-location of our air- and missile-defense commands at
Yokota – and the associated opportunities for information sharing, joint training, and coordination in this area – provide enormous value to both countries. As I alluded to earlier, advances by the
Chinese military in cyber and anti-satellite warfare pose a potential challenge to the ability of our forces to operate and communicate in this part of the Pacific. Cyber attacks can also come from
any direction and from a variety of sources – state, non-state, or a combination thereof – in ways that could inflict enormous damage to advanced, networked militaries and societies. Fortunately,
the U.S. and Japan maintain a qualitative edge in satellite and computer technology – an advantage we are putting to good use in developing ways to counter threats to the cyber and space
domains. Just last month, the Government of Japan took another step forward in the evolution of the alliance by releasing its National Defense Program Guidelines – a document that lays out a
vision for Japan’s defense posture. These guidelines envision: A more mobile and deployable force structure; Enhanced Intelligence, Surveillance, and Reconnaissance capabilities; and A shift in
focus to Japan’s southwest islands. These new guidelines provide an opportunity for even deeper cooperation between our two countries – and the emphasis on your southwestern islands
underscores the importance of our alliance’s force posture. And this is a key point. Because even as the alliance continues to evolve – in strategy, posture, and military capabilities – to deal with
Without such a presence: North
Korea’s military provocations could be even more outrageous -- or worse; China might behave
more assertively towards its neighbors; It would take longer to evacuate civilians affected by conflict or natural disasters in the
this century’s security challenges, a critical component will remain the forward presence of U.S. military forces in Japan.
region; It would be more difficult and costly to conduct robust joint exercises – such as the recent Keen Sword exercise – that hone the U.S. and
Japanese militaries ability to operate and, if necessary, fight together; and Without the forward presence of U.S. forces in Japan, there
would be less information sharing and coordination, and we would know less about regional
threats and the military capabilities of our potential adversaries.
93
Independently – LNG exports to Japan block the Japan-Russia pipeline
Abiru 12 (Taisuke, Research Fellow and Head of Energy Issues and Japanese Foreign Policy –
Tokyo Foundation, “Rebuilding Japan’s Energy Policy,” Tokyo Foundation, 6-21,
http://www.tokyofoundation.org/en/articles/2012/rebuilding-japans-energy-policy2)
North America and Russia hold the key The key to diversifying Japan’s supply sources and forms of access
lies with producers: North America—where the "shale gas revolution" has opened the way to production of cheap natural gas—and Russia,
which holds rich gas reserves on Sakhalin Island, just north of Japan, and may eventually be able to supply that gas in a form
other than LNG, namely, via pipeline. (2) Design a procurement strategy combining North American shale gas and Russia's Sakhalin reserves The potential of
North American shale gas Importation of North American shale gas could mean significant savings for Japan . Even adding in
about $10/MMBtu in extra costs for liquefaction and shipping, the estimated price is $12/MMBtu, as against the current level of $16. The main obstacles are
the absence of a Japan-US free trade agreement, which is needed for US companies to export LNG to Japan, and American concerns
that LNG exports could push up domestic gas prices. At this time it is impossible to predict how much of its own
natural gas the United States may ultimately be willing to export. The increase in US production means, though, that Canadian natural gas
(including shale gas) that was previously exported to the United States can be channeled to Asian markets instead. In view of the current situation, Japan should
look to Canada for the bulk of its North American shale gas, while at the same time laying the groundwork for procurement from the United States with an eye
to strengthening the Japan-US security alliance. Expanded imports from Sakhalin Japan is currently meeting 9% of its total gas demand from the
Sakhalin-2 Project, and it can also look forward to gas from Sakhalin-1, which has yet to be earmarked for export, as well as from Sakhalin-3 once production gets
underway. In all, Sakhalin holds great promise as a long-term, stable source of natural gas for Japan. A Japanese consortium including Itochu and Marubeni is
currently working with the state-controlled Russian natural gas giant Gazprom on a feasibility study for construction of a major plant in Vladivostok to liquefy natural
gas, including that produced by Sakhalin-1, for shipping to Japan and other destinations. All of this points to the need to formulate a gas procurement strategy centered
on both North America, where the "shale gas revolution" has facilitated the production of cheap natural gas, and Russia, which holds rich gas reserves centered on
Sakhalin, just north of Japan. (3) Revisit the Sakhalin-Japan pipeline plan Improving access to Sakhalin gas In the early 2000s, US oil giant Exxon Mobil, leader of
the Sakhalin-1 Project, was pushing plans to build a gas pipeline from its Sakhalin gas fields to Japan. The project ran aground, however, supposedly owing to
political obstacles on the Japanese side. Exxon
Mobil does not seem to have given up hope of building a pipeline from Sakhalin ,
other members of the Japanese consortium involved in Sakhalin-1 are pursuing other angles, as
suggested by the aforementioned feasibility study for an LNG plan in Vladivostok. According to estimates made in the early 2000s,
but Itochu, Marubeni, and
however, a pipeline from Sakhalin had the potential to lower Japan's gas procurement costs significantly, reducing electricity rates in the process. Under the
circumstances, it
would make sense for the government to take the initiative in reexamining the feasibility and economic
benefits of Exxon's pipeline plan, taking care to reach an understanding with the Japanese fishing industry before proceeding.
That kills ocean biodiversity
Pereltsvaig 12 (Asya, lecturer in the Department of Linguistics at Stanford University,
“Resource exploration and environmental issues on Sakhalin Island,” GeoCurrents, 4-11,
http://geocurrents.info/place/russia-ukraine-and-caucasus/siberia/resource-exploration-andenvironmental-issues-on-sakhalin-island)
The Russian Far East is one of the world’s Last Great Wilds : home to numerous indigenous cultures, spectacular
biodiversity, and one-of-a-kind ecosystems. But illegal logging, pirate fisheries, and reckless oil exploitation threaten this
unique area. Sakhalin Island in particular has become a battleground between big Western oil companies, the Russian government, and
environmentalist groups, with the Pacific salmon, gray whales, and the indigenous Nivkh people suffering collateral damage. Sakhalin
Island, which is so remote that Anton Chekhov, who visited it in 1893, called it “the end of the world”, is surrounded by a rich marine
ecosystem. Its waters support the last one hundred or so western Pacific gray whales. The island’s river systems
provide vital spawning habitat for six species of Pacific salmon. The traditional economy of the Nivkh people, as well as a large
part of the regional economy in general, depends on salmon fisheries. Environmental and indigenous groups are extremely concerned by the
rampant salmon poaching on Sakhalin, and anti-poaching efforts are currently underway. The Sakhalin area is also exceptionally rich
in offshore oil and gas deposits. Billions of dollars have been invested by oil firms including Royal Dutch Shell and ExxonMobil in a
series of nine projects at various stages of development (Sakhalin-1, Sakhalin-2, Sakhalin-3, and so on). The oil and gas sites are situated in
relatively pristine areas, causing various groups to criticize the projects and the impact they have on the local environment. Constructing
pipelines through sensitive salmon spawning rivers is only one problem. Sakhalin lies in a highly seismically active zone: on
May 28, 1995, an earthquake measuring 7.5 on the Richter scale killed some 2,000 people in the town of Neftegorsk. Furthermore, in winter, icesheets up to two-meter thick can easily crush a stationery offshore drilling platform. Such issues, as well as the need to attract massive foreign
investment, led to the creation of the Sakhalin Energy Investment Company Ltd. (Sakhalin Energy), formed by the consortium of several
94
Western and Japanese firms. Two of the original partners – McDermott and Marathon – sold or traded their way out of the consortium by 2000,
leaving Shell, Mitsui, and Mitsubishi for a face-off with the Russian Federation.
Extinction
Craig 3 (Robin Kundis, Associate Prof Law, Indiana U School Law, Lexis)
Biodiversity and ecosystem function arguments for conserving marine ecosystems also exist, just as they do for terrestrial ecosystems, but these arguments have thus
far rarely been raised in political debates. For example, besides significant tourism values - the most economically valuable ecosystem service coral reefs provide,
worldwide - coral reefs protect against storms and dampen other environmental fluctuations, services worth more than ten times the reefs' value for food production.
ocean
ecosystems play a major role in the global geochemical cycling of all the elements that represent
the basic building blocks of living organisms, carbon, nitrogen, oxygen, phosphorus, and sulfur,
as well as other less abundant but necessary elements." n858 In a very real and direct sense,
therefore, human degradation of marine ecosystems impairs the planet's ability to support life.
Maintaining biodiversity is often critical to maintaining the functions of marine ecosystems. Current
n856 Waste treatment is another significant, non-extractive ecosystem function that intact coral reef ecosystems provide. n857 More generally, "
evidence shows that, in general, an ecosystem's ability to keep functioning in the face of disturbance is strongly dependent on its biodiversity, "indicating that more
diverse ecosystems are more stable." n859 Coral reef ecosystems are particularly dependent on their biodiversity. [*265] Most ecologists agree that the complexity
of interactions and degree of interrelatedness among component species is higher on coral reefs than in any other marine environment. This implies that the ecosystem
functioning that produces the most highly valued components is also complex and that many otherwise insignificant species have strong effects on sustaining the rest
of the reef system. n860 Thus, maintaining and restoring the biodiversity of marine ecosystems is critical to maintaining and restoring the ecosystem services that they
provide. Non-use biodiversity values for marine ecosystems have been calculated in the wake of marine disasters, like the Exxon Valdez oil spill in Alaska. n861
Similar calculations could derive preservation values for marine wilderness. However, economic value, or economic value equivalents, should not be "the sole or even
primary justification for conservation of ocean ecosystems. Ethical arguments also have considerable force and merit." n862 At the forefront of such arguments should
be a recognition of how little we know about the sea - and about the actual effect of human activities on marine ecosystems. The United States has traditionally failed
to protect marine ecosystems because it was difficult to detect anthropogenic harm to the oceans, but we now know that such harm is occurring - even though we are
not completely sure about causation or about how to fix every problem. Ecosystems like the NWHI coral reef ecosystem should inspire lawmakers and policymakers
to admit that most of the time we really do not know what we are doing to the sea and hence should be preserving marine wilderness whenever we can - especially
when the United States has within its territory relatively pristine marine ecosystems that may be unique in the world. We may not know much about the sea, but we do
know this much:
if we kill the ocean we kill ourselves, and we will take most of the biosphere with us.
95
Relations – Link – Exports Solve
Exports to Japan revitalize the alliance
Nye & Armitage 12 -- dean emeritus of the Kennedy School of Government at Harvard
University, dean emeritus of the Kennedy School of Government at Harvard University, AND
*president of Armitage International, president of trustee of CSIS, served as U.S. deputy
secretary of state, (Joseph and Richard, 8/12, "The U.S.-Japan Alliance: anchoring stability in
asia," http://csis.org/files/publication/120810_Armitage_USJapanAlliance_Web.pdf)
Nuclear Energy The tragedies of March 11, 2011, are fresh in our minds, and we extend our deepest condolences to all victims and those afflicted
by the earthquake, tsunami, and subsequent nuclear meltdown. Understandably, the
Fukushima nuclear disaster dealt a
major setback to nuclear power. The setback reverberated not only throughout Japan, but also around the world. While some
countries like Great Britain and China are cautiously resuming nuclear expansion plans, others, like Germany, have decided to phase out nuclear
power entirely. Japan is conducting thorough examinations of its nuclear reactors and reforming its nuclear safety regulations. Despite strong
public opposition to nuclear power, Prime Minister Yoshihiko Noda’s government has begun a partial restart of two nuclear reactors. Further
restarts depend on safety checks and local approval. The cautious resumption of nuclear generation under such conditions is the right and
responsible step in our view. Japan has made tremendous progress in boosting energy efficiency and is a world leader in energy research and
development. While the people of Japan have demonstrated remarkable national unity in reducing energy consumption and setting the world’s
highest standards for energy efficiency, a
lack of nuclear energy in the near term will have serious
repercussions for Japan. Without a restart of nuclear power plants, Japan will not be able to make meaningful progress toward her
goal of cutting carbon dioxide (CO2 ) emissions by 25 percent by 2020. Nuclear power is and will remain the only substantial source of
emissions-free, base load electricity generation. Environment Ministry data reportedly shows that without a nuclear restart, Japan’s emissions can
fall at most by 11 percent by 2020; but with a restart, emissions reductions could approach 20 percent. 1 A permanent shutdown would boost
Japan’s consumption of imported oil, natural gas, and coal. Moreover, postponing
a decision on national energy
policy has the potential to drive vital, energy-dependent industries out of Japan and may threaten
national productivity. A permanent shutdown will also stymie responsible international nuclear development, as developing
countries will continue to build nuclear reactors. China, which suspended reactor approvals for over a year following Fukushima (but did not
suspend progress on ongoing projects), is restarting domestic construction of new projects and could eventually emerge as a significant
international vendor. As China plans to join Russia, South Korea, and France in the major leagues of global development in civilian nuclear
power, Japan cannot afford to fall behind if the world is to benefit from efficient, reliable, and safe reactors and nuclear services. For its part,
the United States needs to remove uncertainty surrounding disposal of spent nuclear waste and implement clear
permitting processes. While we are fully cognizant of the need to learn from Fukushima and implement corrective safeguards, nuclear power still
holds tremendous potential in the areas of energy security, economic growth, and environmental benefits. Japan and the United States have
common political and commercial interests in promoting safe and reliable civilian nuclear power domestically and internationally.
Tokyo
and Washington must revitalize their alliance in this area , taking on board lessons from
Fukushima, and resume a leadership role in promoting safe reactor designs and sound regulatory practices globally. The 3-11 tragedy
should not become the basis for a greater economic and environmental decline. Safe, clean, responsibly developed and utilized nuclear power
constitutes an essential element in Japan’s comprehensive security. In this regard, U.S.-Japan cooperation on nuclear research and development is
essential. Natural Gas Recent
trade
positive developments in natural gas could rekindle bilateral energy
in ways few thought possible just a few years ago. The discoveries of large new shale gas reserves in the lower 48 states have made the
United States the world’s fastest growing natural gas producer. The International Energy Agency (IEA) noted that the planned expansion of the
Panama Canal in 2014 would enable 80 percent of the world’s liquefied natural gas (LNG) fleet to use the canal, dramatically lowering shipping
costs and making LNG exports from the U.S. Gulf Coast dramatically more competitive in Asia. 2 The shale gas revolution in the continental
United States and the abundant gas reserves in Alaska present Japan and the United States with a complementary opportunity: the United States
should begin to export LNG from the lower 48 states by 2015, and Japan
continues to be the world’s largest LNG
importer. Since 1969, Japan has imported relatively small amounts of LNG from Alaska, and
96
interest is picking up in expanding that trade link, given Japan’s need to increase and
diversify its sources of LNG imports, especially in light of 3-11. However, companies in the United States seeking to export LNG to a
country that does not have a free trade agreement (FTA) with the United States, and more specifically a gas national treatment clause in its FTA,
must first get approval from the U.S. Department of Energy (DOE) Office of Fossil Energy. Sixteen FTA countries, receive DOE export approval
(although other regulatory and permitting requirements apply), but most of these are not major LNG importers. For non-FTA countries like
Japan, the permit
is granted unless DOE concludes it would not be in the “public interest” of
the United States. The Kenai LNG terminal routinely received DOE permits to export from Alaska to Japan. But as the potential for LNG
exports from the lower 48 states emerges, DOE’s permitting process is coming under political scrutiny. In addition to the Sabine Pass LNG
project, which already received a DOE non-FTA permit, there are eight other permits for LNG projects in the lower 48 waiting for DOE
approval. Activists oppose LNG exports on environmental or economic grounds. There are concerns that exports will raise domestic U.S. natural
gas prices and weaken the competitiveness of domestic industries that rely heavily on natural gas. A recent policy brief by the Brookings
Institution refuted this claim and concluded that the
likely volume of future exports will be relatively small
compared to total U.S. natural gas supply, and the domestic price impacts would be minimal and
not undermine wider use of gas for domestic, industrial, and residential uses. 3 Limiting LNG exports needlessly
deters investment in U.S. shale gas and LNG export projects. The United States should not resort to resource nationalism and should not inhibit
privatesector plans to export LNG. U.S. policymakers should facilitate environmentally responsible exploitation of these new resources while
in a time of crisis for Japan, the United States should guarantee no
interruption in LNG supply (barring a domestic national emergency that the president would declare) going to Japan
under previously negotiated commercial contracts and at prevailing commercial rates, ensuring a
constant and stable supply . As part of the security relationship, the United States and Japan should be
remaining open to exports. Moreover,
natural resource allies as well as military allies. This area of cooperation remains insufficiently
developed . Further, the United States should amend current legislation inhibiting LNG exports to Japan. Ideally, Congress would remove
the FTA requirement for an automatic permit, creating a rebuttable presumption that LNG exports to any country with which we enjoy peaceful
relations are in the national interest. Alternatively, Congress should deem Japan to be an FTA country for purposes of LNG exports, putting Japan
on an equal footing with other potential customers. At the very least, the White
House should fully support and
prioritize export projects associated with Japan as it considers permits under current law. With proper
policy support, natural gas can revitalize bilateral trade and also increase Japan’s foreign
direct investment (FDI) in the United States. While the gas supply in North America is significant, there are concerns
that the United States lacks adequate terminal, port, and associated onshore transportation systems needed to handle
potential tanker traffic. 4 Without large infrastructure investments, U.S. gas production cannot grow . This is
yet another valid reason for amending the law to grant Japan equal footing with other FTA customers for U.S. natural gas.
LNG exports are key to Japan trade
Boman 12- Senior Editor at Rigzone.com ( Karen, ”Paper: US LNG Export Benefits Outweigh
Modest Impacts on Industrial Output”, June 06, 2012,
http://www.rigzone.com/news/article.asp?a_id=118418)//EL
LNG exports from the United States also could serve as a bargaining chip for U.S. foreign
trade policy with countries such as Japan, whose reliance on LNG has increased following
the 2011 earthquake and tsunami, which damaged a significant amount of Japan's nuclear
power generating assets.
"A lot of other countries want access to U.S. LNG exports, and they want to be in the first
category in which permits are approved automatically," said Levi during a conference call with
97
reporters on Wednesday. "We have something that others want, so why shouldn't we try and
get something for it?"
Impact – K2 US-Japan relations
Abiru 12 (Taisuke, Research Fellow and Head of Energy Issues and Japanese Foreign Policy –
Tokyo Foundation, “Rebuilding Japan’s Energy Policy,” Tokyo Foundation, 6-21,
http://www.tokyofoundation.org/en/articles/2012/rebuilding-japans-energy-policy2)
The key to diversifying Japan’s supply sources and forms of access lies with producers : North America—where the
"shale gas revolution" has opened the way to production of cheap natural gas—and Russia, which holds rich gas reserves on
Sakhalin Island, just north of Japan, and may eventually be able to supply that gas in a form other than LNG, namely, via pipeline. (2)
Design a procurement strategy combining North American shale gas and Russia's Sakhalin reserves The potential of North American
shale gas Importation of North American shale gas could mean significant savings for Japan . Even adding in about
$10/MMBtu in extra costs for liquefaction and shipping, the estimated price is $12/MMBtu, as against the current level of $16. The main
obstacles are the absence of a Japan-US free trade agreement, which is needed for US companies to export LNG to Japan, and American concerns
that LNG exports could push up domestic gas prices. At this time it is impossible to predict how much of its own natural gas
the United States may ultimately be willing to export. The increase in US production means, though, that Canadian
natural gas (including shale gas) that was previously exported to the United States
can be channeled to Asian markets
instead . In view of the current situation, Japan should look to Canada for the bulk of its North American shale gas, while at the same
time laying the groundwork for procurement from the United States with an eye to
strengthening the Japan-
US security alliance .
98
Relations – Japan Needs US LNG
Japan needs LNG for its economy
Odano 10 (Dr. Sumimaru Odano is Professor and Director, Center for Risk Research, Shiga University, Japan.
The authors gratefully acknowledge the data and information that were provided by Alidi Mahmud (Head of Energy
Division at the Prime Minister’s Office), Sofian Kipli (External Affairs Adviser, Brunei LNG Company), and Jill
Heys (BP Distribution Services, United Kingdom "LNG EXPORTS FROM BRUNEI TO JAPAN"
http://www.econ.shiga-u.ac.jp/10/2/3/res.3/A20SaifulOdano201003.pdf) SM
With the increase in demand for gas, Japan could face a gap in supply of natural gas of 24
million tons by 2015. This will provide opportunities for LNG suppliers for selling gas.
Brunei has a plan to expand its existing LNG facility for increasing annual LNG supply capacity by 4 million tons to 11.2 million tons.
However, expansion plan in Brunei is currently delayed because of insufficient quantities of
natural gas supply to the LNG production plant. Expansion plan would also depend on
supply of natural gas to methanol plant in Brunei, which will be in operation in early 2010.
But this plan of producing additional 4 million tons of LNG a year may meet stiff competition from other suppliers in the region such as
Malaysia, Indonesia and Australia.
Japan currently doesn’t have enough LNG to support its economy; on the
brink now.
Levi 12 (Michael A. Levi is the David M. Rubenstein senior fellow for energy and environment at the Council on
Foreign Relations, a nonpartisan foreign-policy think tank and membership organization."A Strategy for U.S.
Natural Gas Exports"http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20exports%20levi/06
_exports_levi.pdf) SM
Asia has not been so fortunate, and the reasons for this are not entirely clear. Asian natural gas prices are still tied closely to crude oil prices,
normally through politically involved negotiations. Asian
buyers still have fewer options for large-scale
imports than European buyers do—key buyers, including Japan and Korea, do not have access to pipeline imports—which
reduces their relative power. In addition, at the same time that European customers were gaining new leverage in 2011, Japan, the
largest LNG importer in Asia, was paralyzed by the disaster at its Fukushima nuclear
power plant . As that accident led to widespread nuclear shutdowns, Japan massively increased its demand for LNG to meet critical
electricity needs. Japan, desperate to avoid further economic harm, was not in a position to negotiate aggressively with natural gas suppliers.
Many analysts in both the United States and Asia have speculated that U.S. entry into the
Asian LNG market as a major supplier (along with others) could help create the conditions
for a move toward market pricing of natural gas, or at least to a lessening of individual
producers’ market power and, hence, political influence. Predicting political influence is a near-impossible
business, but to examine whether U.S. exports might help encourage such a transformation, it is useful to
compare the potential magnitude of U.S. LNG deliveries to other important scales in the natural gas market. As of 2010, the world’s top five
LNG exporters were Qatar (8.2 bcf/d), Indonesia (3.3 bcf/d), Malaysia (3.3 bcf/d), Australia (2.7 bcf/d), and Nigeria (2.6 bcf/d) (IGU 2010). The
top supplier to Japan was Indonesia (2.0 bcf/d), and the top supplier to Korea was Qatar (1.1 bcf/d). The
spot market accounted
for slightly more than a fifth of traded LNG, totaling slightly less than seven billion cubic
feet a day.
99
100
Relations – Impact – Global Nuclear War
Alliance breakdown causes global nuclear war
Khalilzad 95 (Zalmay, RAND Corporation, Losing The Moment? Washington Quarterly, Vol
18, No 2, p. 84)
Without U.S. protection, Japan is likely to increase its military capability dramatically -- to balance the growing Chinese
forces and still-significant Russian forces. This could result in arms races, including the possible acquisition by Japan of
nuclear weapons. Given Japanese technological prowess, to say nothing of the plutonium stockpile Japan has acquired in the development of
its nuclear power industry, it could obviously become a nuclear weapon state relatively quickly, if it should so decide. It could also build longrange missiles and carrier task forces. With the shifting balance of power among Japan, China, Russia, and potential new regional
powers such as India, Indonesia, and a united Korea could come
significant risks of preventive or
proeruptive war.
Similarly, European competition for regional dominance could lead to major wars in Europe or East Asia . If the United States
stayed out of such a war -- an unlikely prospect -- Europe or East Asia could become dominated by a hostile power. Such a development would
threaten U.S. interests. A power that achieved such dominance would seek to exclude the United States from the area and threaten its interestseconomic and political -- in the region. Besides, with the domination of Europe or East Asia, such a power might seek global
hegemony and the United States would face another global Cold War and the risk of a world war even more
catastrophic than the last.
101
Add-Ons
102
Economy: 2AC
LNG key to U.S economy
API (American Petrol Institute) March 14 The American Petroleum Institute, commonly
referred to as API, is the largest U.S trade association for the oil and natural gas industry.
.(Liquefied Natural Gas: Exports - America’s Opportunity and
Advantage)http://www.api.org/policy-and-issues/policy-items/lng-exports/liquefied-natural-gasexports-americas-opportunity-and-advantage. NT
America is in the midst of an energy revolution. As of 2012, unconventional oil and natural gas
development supported 2.1 million jobs, and it is projected to support 3.9 million jobs by 2025.
This year, according to EIA, we surpassed Russia as the world’s energy superpower – producing
more oil and natural gas than any other country. At the same time, we’ve reduced U.S. carbon
dioxide emissions to near 20-year lows thanks, in part, to the carbon advantages of natural gas.
But, for American workers, the best is yet to come. The export of liquefied natural gas – or
LNG -- represents one of the most promising economic opportunities of the shale
revolution. These exports will significantly reduce our trade deficit, increase government
revenues, grow the economy, and support millions of U.S. jobs in engineering,
manufacturing, construction, and facility operations. America is in a global race to build this
infrastructure and secure a competitive position in the international market. More than 60
international LNG export projects are currently planned or under construction around
the world, and those nations that act quickly to attract these investments will reap the
economic rewards. Fortunately, U.S. workers are in a very good position to win that race.
The opportunities associated with LNG exports will extend beyond natural gas-producing
states. According to ICF, by 2035:
• LNG exports could contribute as much as $10 to $31 billion per state to the economies of
natural gas-producing states, such as Texas, Louisiana, and Pennsylvania.
• Non-natural-gas-producing states will also benefit, partly due to the boost in demand for
steel, cement, equipment, and other goods. States with a large manufacturing base, such as
Ohio, California, New York, and Illinois, will see economic gains as high as $2.6 to $5.0
billion per state.
103
• Natural gas-producing states could see employment gains as high as 60,000 to 155,000
jobs; and large manufacturing states, such as California and Ohio, will see employment
gains upwards of 30,000 to 38,000 jobs in 2035.
• There could also be significant job growth in states where LNG export terminals could be
built. For example, in a high export scenario, in which an Alaska-based terminal is built, Alaska
can expect up to a $10 billion addition to state income and over 36,000 added jobs resulting from
LNG exports.
104
Price Volatility: 2AC
LNG exports will dampen price volatility in North America
Helman 12 — Christopher Helman, mostly cover the energy industry and the tycoons who
control it. I joined Forbes in 1999 and moved from New York to Houston in 2004. The subjects
of my Forbes cover stories have included T. Boone Pickens, Harold Hamm, Aubrey McClendon,
Michael Dell, Ross Perot, Exxon, Chevron, Saudi Aramco and more, 2012. (“The U.S. Has A
Natural Gas Glut; Why Exporting It As LNG Is A Good Idea”, Forbes, June 13, 2012, available
at http://www.forbes.com/sites/energysource/2012/06/13/the-u-s-has-a-natural-gas-glut-whyexporting-it-as-lng-is-a-good-idea/ , accessed on 7/2/14)
The emergence of shale gas has caused natural gas prices in North America to drop to the lowest
levels seen in decades. Shale gas resources elsewhere in the world, however, have not yet been
developed to the same extent—creating a sustainable arbitrage opportunity. Given the potential
profitability of liquefying surplus North American gas production and exporting it as Liquefied
Natural Gas (LNG), a number of companies are now willing to develop capital-intensive
natural gas export projects. LNG exports will help to provide better balance between
supply and demand in the market, dampening price volatility in North America, and
providing circumstances in which industrial gas investments and feedstock natural gas
purchases can be made with greater confidence in long-term natural gas pricing. As
recently as 2007, North America was looking at a significant gas shortage and more than sixty
LNG import projects were proposed. Just five years later, the implementation of horizontal
drilling and hydraulic fracturing has led North America to a sizable excess of gas supply. The
latest figures from the U.S. Energy Information Agency (EIA) indicate that natural gas supply
could exceed demand by 2016, enabling North America to become a net exporter of LNG. The
rapid increase in natural gas production has had a substantial impact on gas pricing in North
America. While gas prices in North America are not directly correlated to oil prices, up until late
2008, natural gas prices generally matched oil price trends. Since the increase in shale gas
production was first identified in Navigant’s groundbreaking North American Natural Gas
Supply Assessment in 2008, natural gas prices have headed downwards from $5.00 per million
British thermal units (mmBtu) to approximately $2.50 per mmBtu in May 2012. However,
although natural gas prices decreased, crude oil prices increased during the same period. While
the EIA indicates that long term North American natural gas prices will rise to $4.00 to $6.00 per
mmBtu, natural gas will continue to trade at a sizable discount to oil on an energy equivalent
basis. Unlike crude oil, there is not yet a large tradable global market for natural gas and
consequently, prices vary across the world. In Asia, prices for major LNG importers closely
correlate to oil prices, and LNG is currently priced over $17.00 per mmBtu. In Europe, prices are
lower at $12.00 to $14.00 per mmBtu. For North American producers to benefit from higher
global prices they must successfully construct costly and complex LNG facilities and related
infrastructure costing billions of dollars. Assuming a long-term North American natural gas price
of $4.00 to $6.00 per mmBtu, liquefaction and shipping costs will add approximately $4.00 per
mmBtu. This offers an attractive $3.00 to $5.00 per mmBtu arbitrage opportunity to the $13.00
105
per mmBtu price currently achievable at Europe’s LNG terminals. The real prize, however,
would be realizing LNG exports to Asia. While shipping costs would be higher (due to the much
greater distance to Asia than to Europe), the current Asian LNG price of $17 per mmBtu
provides the prospect of a much greater arbitrage opportunity. What are the risks to the current
export strategy? Shale gas production has increased rapidly, offsetting a steady decline in
conventional gas production across North America. While more natural gas can be produced
from what is largely agreed upon as an “abundant gas resource,” the pace of future development
is subject to factors such as changing environmental legislation. Competition for the Asian
markets, notably from the large number of Australian-based LNG projects in development, is
expected to be fierce. LNG project costs are on the increase, due in part to the considerable
number of projects seeking to be developed in a short period of time. Finally, shale gas resources
are not exclusive to North America. Europe and Asia both have significant shale gas potential;
however, the pace at which shale gas resources will be developed in these regions has yet to
become clear. Overall, North American natural gas exports are a very positive development for
both North American and global natural gas markets. In a market of surplus supply, access to
large export markets will serve to balance supply and demand, thereby dampening price
volatility, increasing natural gas prices moderately, and, over the long-term, providing a
sustainable natural gas market in North America—the stability of supply and price needed
by North American industrial markets. In this sense, it would seem that industrialcommunity opposition to exports based on perception of price impact is short-sighted.
Meanwhile, for natural gas consumers in Asia and Europe, North American export
projects will provide another competitive supply option. In the long run, companies with
experience, fortitude, capital, and a healthy risk appetite may find themselves in the right
place and at the right time to capitalize on North American LNG export projects.
106
LNG K2 Econ: Ext.
Exports are beneficial – jobs, profits, petrochemicals, trade diplomacy
Levi 12 [Michael Levi, David M. Rubenstein Senior Fellow for Energy and the Environment Director of the Program on Energy Security
and Climate Change Council on Foreign Relations Michael Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment at
the Council on Foreign Relations (CFR) and Director of the CFR program on energy security and climate change. His work focuses on foreign
and domestic policy related to climate change, energy security, nuclear weapons. Levi is the author of two books, most recently On Nuclear
Terrorism (Harvard University Press, 2007) and is at work on two more. The first explores the recent boom in American energy, evaluating its
consequences and assessing policy options for harnessing it; the second, with Elizabeth Economy, explores the causes and consequences of
China’s quest for natural resources. Other recent work has focused on the international political economy of clean energy innovation, global oil
markets, the Canadian oil sands, and climate diplomacy. Michael is a member of the Strategic Advisory Board for NewWorld Capital LLC, a
private equity firm focused on environmental opportunities, and a member of the External Advisory Board to the Princeton University Carbon
Mitigation Initiative (CMI). He holds a Bachelors of Science in mathematical physics from Queen’s University, an MA in physics from Princeton
University and a Ph.D. in war studies from the University of London.; June 2012, “A Strategy for U.S. Natural Gas Exports”
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20exports%20levi/06_exports_levi.pdf\\ML]
Export terminal construction might employ as many as 8,000 people at different points
over the next several years, but these jobs will be temporary. Expanding natural gas production in order
to supply export markets could potentially support roughly 25,000 jobs in the natural gas
industry, and perhaps 40,000 along the supply chain, but most of these positions would not materialize for at least
five more years, and can thus be reasonably expected to be mostly offset by lower employment elsewhere. Profits from greater gas
production and export activities could reach several billion dollars each year, while losses to other
gas dependent industries would likely be at least an order of magnitude smaller. Indeed, the resurgent petrochemicals
industry, which many have assumed would suffer from gas exports, would be more likely to benefit instead from
modest export volumes. Moreover, allowing LNG exports would have benefits for U.S. leverage
in trade diplomacy, potentially delivering wider economic benefits. Conversely, placing
curbs on U.S. LNG exports could undermine U.S. access to exports from other markets
(including to Chinese rare earth metals, which are essential to many segments of the U.S.
clean energy industry), and could potentially result in broader trade conflicts, leading to
wider U.S. economic harm.
LNG exports benefit the U.S.
Levi 12 [Michael Levi, David M. Rubenstein Senior Fellow for Energy and the Environment Director of the Program on Energy Security
and Climate Change Council on Foreign Relations Michael Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment at
the Council on Foreign Relations (CFR) and Director of the CFR program on energy security and climate change. His work focuses on foreign
and domestic policy related to climate change, energy security, nuclear weapons. Levi is the author of two books, most recently On Nuclear
Terrorism (Harvard University Press, 2007) and is at work on two more. The first explores the recent boom in American energy, evaluating its
consequences and assessing policy options for harnessing it; the second, with Elizabeth Economy, explores the causes and consequences of
China’s quest for natural resources. Other recent work has focused on the international political economy of clean energy innovation, global oil
markets, the Canadian oil sands, and climate diplomacy. Michael is a member of the Strategic Advisory Board for NewWorld Capital LLC, a
private equity firm focused on environmental opportunities, and a member of the External Advisory Board to the Princeton University Carbon
Mitigation Initiative (CMI). He holds a Bachelors of Science in mathematical physics from Queen’s University, an MA in physics from Princeton
University and a Ph.D. in war studies from the University of London.; June 2012, “A Strategy for U.S. Natural Gas Exports”
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20exports%20levi/06_exports_levi.pdf\\ML]
In light of this analysis, I
propose that the United States allow LNG exports. In conjunction with
this, the U.S. should take other steps to mitigate potential downsides and leverage these
exports to its advantage. The United States should approve applications to export LNG
from the United States, several of which are currently pending, and more of which can be
expected in the future. This does not mean that the U.S. government should encourage exports per se; it should simply
allow them to occur if properly regulated markets steer the economy in that direction. U.S.
107
law distinguishes between LNG exports to countries with which the United States has relevant free trade agreements (FTAs), which are fast
tracked for approval, and exports to other countries, which face more rigorous review and must be judged to be consistent with the U.S. national
interest. Some have argued that this distinction should be abolished, since it interferes with free trade. The United States should maintain the
distinction, which can give it leverage in trade negotiations without entailing any economic costs. U.S.
natural gas exports can
also provide a platform for more effective U.S. foreign and trade policy. To that end, the
United States should use foreign access to U.S. gas exports as leverage in trade negotiations,
and actively seek to steer global gas trade toward greater transparency and market-based
pricing.
LNG exports have a significant beneficial economic impact
Levi 12 [Michael Levi, David M. Rubenstein Senior Fellow for Energy and the Environment Director of the Program on Energy Security
and Climate Change Council on Foreign Relations Michael Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment at
the Council on Foreign Relations (CFR) and Director of the CFR program on energy security and climate change. His work focuses on foreign
and domestic policy related to climate change, energy security, nuclear weapons. Levi is the author of two books, most recently On Nuclear
Terrorism (Harvard University Press, 2007) and is at work on two more. The first explores the recent boom in American energy, evaluating its
consequences and assessing policy options for harnessing it; the second, with Elizabeth Economy, explores the causes and consequences of
China’s quest for natural resources. Other recent work has focused on the international political economy of clean energy innovation, global oil
markets, the Canadian oil sands, and climate diplomacy. Michael is a member of the Strategic Advisory Board for NewWorld Capital LLC, a
private equity firm focused on environmental opportunities, and a member of the External Advisory Board to the Princeton University Carbon
Mitigation Initiative (CMI). He holds a Bachelors of Science in mathematical physics from Queen’s University, an MA in physics from Princeton
University and a Ph.D. in war studies from the University of London.; June 2012, “A Strategy for U.S. Natural Gas Exports”
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20exports%20levi/06_exports_levi.pdf\\ML]
For a full six billion cubic feet a day of exports, using the same approach and assumptions
as above, the estimated surplus for the U.S. economy would be $2.7 billion to $3.2 billion
each year. The gains from selling gas overseas rather than at home would be approximately
$700 million to $1 billion; the gains from new gas production would be roughly $2.3 billion
to $2.8 billion; and the losses from lower domestic consumption would be approximately $300 million to $500 million. The precise
numbers here depend on the sources of exported gas (displaced consumption or increased production), but the
fact that the net economic impact is positive does not. Additional gains would be realized
because natural gas exports would exploit existing LNG infrastructure (i.e. some parts of
existing import terminals) that would otherwise go unused and thus be worthless. These gains
should approximately equal the value of the utilized LNG terminals (not including the value of their regasification facilities, which are not useful
for exports), which
are typically on the order of $1 billion for each billion cubic feet a day of
capacity. Spread over a notional fifteen-year use period, this would add approximately $70
million a year for each billion cubic feet a day of exports. This brings the total estimated
surplus from six billion cubic feet a day of exports to $3.1 billion to $3.7 billion.
Preventing natural gas exports is potentially devastating to the US econ,
diplomacy, trade, and energy market
Levi 12 [Michael Levi, David M. Rubenstein Senior Fellow for Energy and the Environment Director of the Program on Energy Security
and Climate Change Council on Foreign Relations Michael Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment at
the Council on Foreign Relations (CFR) and Director of the CFR program on energy security and climate change. His work focuses on foreign
and domestic policy related to climate change, energy security, nuclear weapons. Levi is the author of two books, most recently On Nuclear
Terrorism (Harvard University Press, 2007) and is at work on two more. The first explores the recent boom in American energy, evaluating its
consequences and assessing policy options for harnessing it; the second, with Elizabeth Economy, explores the causes and consequences of
China’s quest for natural resources. Other recent work has focused on the international political economy of clean energy innovation, global oil
markets, the Canadian oil sands, and climate diplomacy. Michael is a member of the Strategic Advisory Board for NewWorld Capital LLC, a
private equity firm focused on environmental opportunities, and a member of the External Advisory Board to the Princeton University Carbon
Mitigation Initiative (CMI). He holds a Bachelors of Science in mathematical physics from Queen’s University, an MA in physics from Princeton
University and a Ph.D. in war studies from the University of London.; June 2012, “A Strategy for U.S. Natural Gas Exports”
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20exports%20levi/06_exports_levi.pdf\\ML]
108
examination of these
components indicates that the benefits of allowing LNG exports outweigh the risks and
costs, so long as downside risks to the local environment are mitigated, as discussed previously. Allowing exports would
boost the U.S. economy, create jobs, reduce greenhouse-gas emissions, and create new
geopolitical leverage for the United States. In particular, the likely benefits to the U.S.
economy outweigh the benefits that would be realized by trapping natural gas in the United
States in the hope that it will be used to replace oil. Barring exports would also weaken the
U.S. hand in international trade diplomacy, including in the ongoing fight over Chinese
restrictions on minerals exports. Strongly constraining U.S. gas exports would also require
substantial interference in the currently integrated North American energy market, with
the potential for economically and politically damaging fallout.
In Chapter 4, I laid out a framework for consideration of the wisdom of allowing LNG exports. An
LNG exports good for all states
Vidas 13 — Harry Vidas, a recognized authority on energy markets and forecasting. He leads a team of
geologists, engineers, and economists to analyze North American and world natural gas and oil supply,
transportation, and end use. He has directed projects related to international oil and natural gas supply,
gas processing, and LNG production; shipping, pipeline transmission, underground storage, gas-to-liquids
processes; and synthetic fuels and end-use markets. He has worked in electric utility fuel use, price and
capacity forecasting, and design and implementation of management information and planning systems.
He has designed and implemented models to estimate expected future energy price distributions and
optimum commodity sales portfolios, 2013.(“ U.S. LNG Exports:
State-Level Impacts on Energy Markets and the Economy”, ICF international, November 13, 2013,
available at http://www.api.org/~/media/Files/Policy/LNG-Exports/API-State-Level-LNGExport-Report-by-ICF.pdf, accessed on 7/2/14)
This state-level study follows a national-level study on the economic and employment impacts of
liquefied natural gas (LNG) exports from the United States done on behalf of the American
Petroleum Institute (API).1 This state-level analysis allocates national-level LNG export impacts
among each U.S. state. Similar to the national-level study, which found overwhelmingly
positive economic and employment impacts associated with LNG exports, this study
concludes that LNG exports have a net positive impact, or negligible net impact, across all
states. Of the up to $115 billion net Gross Domestic Product (GDP) value added generated
by LNG exports in 2035, natural gas-producing states such as Texas, Louisiana and
Pennsylvania are expected to see increases in state income up to $10-$31 billion that year.
Non-natural-gas-producing states with a large manufacturing base, such as Ohio,
California, New York, and Illinois, see significant impacts, up to $2.6-$5.0 billion in 2035.
Employment Impacts: LNG exports are expected to contribute up to 665,000 net job gains
nationwide in 2035, with all states seeing net positive employment impacts from LNG
exports.1 As with state income impacts, gas-producing states are expected to see the largest
employment impacts, with Texas, Louisiana, and Pennsylvania expected to achieve up to
60,000-155,000 job gains in 2035. Large manufacturing states such as California and Ohio
could see up to 30,000-38,000 job gains in 2035.
109
LNG exports are net-positive
Sreekumar 14 — Arjun Sreekumar, contributor for the Motley Fool. A value-oriented investor
focusing primarily on the oil and gas sector, with an emphasis on E&Ps and integrated majors. He also
occasionally writes about the US housing market and China’s economy, 2014. (“LNG Exports: Good or
Bad for America?”, The Motley Fool, May 18, 2014, available at
http://www.fool.com/investing/general/2014/05/18/lng-exports-good-or-bad-for-america.aspx , accessed
on 7/2/14)
On the other hand, proponents of LNG exports argue that the potential economic benefits
would easily exceed the costs of higher domestic gas prices. According to estimates cited in
the Hamilton Project discussion paper, exports have the potential to support as many as
60,000 jobs along the natural gas supply chain and increase U.S. GDP by as much as $4
billion per year. Take Cheniere's proposed LNG export facility in Corpus Christi, Texas,
for instance. This massive $12 billion project alone could support thousands of high-paying
jobs once completed, in addition to the 225 positions it would create to operate the facility,
according to Judy Hawley, chair of the Corpus Christi Port Commission. In total, the
project, which is still awaiting DOE approval, would employ some 1,800 workers during its
five-year construction period and support some 8,000 permanent jobs annually, according
to estimates cited by Hawley. And that's only counting the direct employment opportunities
the facility could create; the economic impact would be much greater if one includes the
entire supply chain. For instance, consider the potential impact on Chart Industries
(NASDAQ: GTLS ) , which manufactures and sells equipment to convert natural gas into a
liquid. According to Matthew Klaben, Chart's vice president, just one average-sized export
terminal like Cheniere's Corpus Christi facility would support hundreds of jobs at Chart's
facilities in Texas, Oklahoma, Louisiana, and Wisconsin. It would also support thousands of
additional jobs across the country, mainly for manufacturing the various components
needed for an LNG facility such as storage tanks, compressors, heat exchangers, pipes,
valves, and other integral parts. Each LNG export project would therefore pump billions of
dollars into the economy, Klaben added. LNG exports: good or bad? While both sides put forth
convincing arguments, I think exports would be a net positive for the U.S. economy because
of the self-limiting nature of the LNG export market, which should ensure that gas will
only be exported in large quantities if it's cheap and plentiful enough to produce so that
prices remain in check even with additional exports -- a key point highlighted in a recent
report by NERA Economic Consulting. What do you think?
Exports In Gas Key
Johnson and Lefebvre 2013 (Keith Johnson and Ben Lefebvre are writers and columnists for the Wall
Street Journal, “U.S. Approves Expanded Gas Exports”, May 18 2013
[http://online.wsj.com/news/articles/SB10001424127887324767004578489130300876450])
The Obama administration on Friday cleared the way for broader natural-gas exports by approving a $10 billion facility in Texas, a milestone in
the U.S. transition into a major supplier of energy for world markets. The decision reflects a turnaround in the U.S. energy trade. Five years ago,
many companies built natural-gas import terminals, anticipating greater U.S. demand for imported fuel. Now, a group of private investors that
includes ConocoPhillips COP +0.63% plans to turn one of those terminals—in Quintana Island, Texas—into an export facility to ship natural gas
to Japan and other nations. Enlarge Image Cheniere Energy Inc.'s Sabine Pass facility in Louisiana won approval in May 2011 to export LNG to
the countries without free-trade agreements. It expects to begin exporting in 2015. Ben Lefebvre/The Wall Street Journal Related Video Energy
Firms Showcase Natural Gas Cars In giving the project, known as Freeport LNG, the green light,
the Department of Energy
110
signaled that it found the prospective benefits from exporting energy outweighed concerns
about possible downsides for the U.S. economy. Proponents of greater exports, including the oil and gas industry, say
that exporting inexpensive natural gas will help the U.S. trade balance, help advance the
adoption of clean-burning fuels around the world and shore up energy-poor U.S. allies.
Opponents counter that exports may cause domestic prices to rise, hurting consumers and some industries such as chemicals that have benefited
from cheap natural gas. Some environmentalists oppose exports for a different reason, saying the U.S. shouldn't encourage more fossil-fuel
production. "I hope this means that more facilities will get approval in due time, sooner rather than later," said Freeport LNG Chief Executive
"The country needs these exports for jobs, for balance of trade and for
geopolitical reasons—our allies are asking for them." Dow Chemical Co. DOW +1.03% , which has vocally
Michael Smith in an interview.
opposed unrestricted gas exports, and Sen. Ron Wyden (D., Ore.), another skeptical voice who wields sway as chairman of the Senate Energy
Committee, said they supported the Department of Energy's decision because the department said it would weigh applications case-by-case.
"Dow will adopt a wait-and-see approach regarding further approvals," the company said. It maintained that using natural gas for domestic
The combination of hydraulic fracturing and
horizontal drilling has unleashed a natural-gas bonanza that has made the U.S. the world's
largest natural-gas producer. President Barack Obama has welcomed the boom, and his administration showed in Friday's
manufacturing creates "far more" value "than exporting it as a fuel."
decision it was ready to buck environmental groups in order to spur further production. Deb Nardone of the Sierra Club called the move a "bad
The Department of Energy said it had given
conditional authorization to the Freeport project to export up to 1.4 billion cubic feet a day
of liquefied natural gas. The approval is needed for exports to countries with which the
U.S. doesn't have a free-trade agreement, a category including major trading partners in
Europe and Asia. The project, which is expected to begin exports in 2017, still needs
approval from the Federal Energy Regulatory Commission. The Freeport terminal is the second export
deal all around" and a "giveaway to the dirty-fuel industry."
facility approved by the Obama administration. Cheniere Energy Inc. LNG -0.70% 's Sabine Pass facility in Louisiana won approval in May 2011
to export LNG to the countries without free-trade agreements. It expects to begin exporting in 2015. The first approval got relatively little notice,
but the issue gained prominence as export applications piled up and leading companies on both sides of the issue began to clash over the merits of
exports. The Department of Energy spent much of 2012 waiting for a report it commissioned on the issue, which was released in December 2012
and concluded that exports would benefit the U.S. economy overall. Friday's decision is an important harbinger for the remaining 19 applications
to export gas to non-FTA countries. That's because, by law, gas exports are presumed to be in the public interest unless shown otherwise.
Freeport LNG has signed preliminary 20-year contracts to sell much of the export facility's capacity to Chubu Electric Power Co. 9502.TO
+0.55% , Osaka Gas Co. 9532.TO 0.00% and BP Energy Co., and the company says it expects to announce a deal for the rest of the capacity this
summer. Chubu
Electric and Osaka Gas, both major Japanese utilities, have a partial stake in
the portion of the facility that is feeding the Japanese demand. The Freeport permit approval opens up the dam for
other pending applications, but the pace of coming decisions is still unknown, said Randy Bhatia, an analyst at Capital One COF +1.61%
Southcoast. "This is an encouraging step," Mr. Bhatia said. "But you need more than one to get a better idea of what pace we can expect them to
process the remainder of that queue." The Department of Energy will next consider the application of a slightly larger export facility in Lake
Charles, La. While there are nearly a score of applications outstanding, analysts expect that only a handful will be built, due to the high cost of
Moody's Investors Service has said that projects building from existing
facilities, including Cove Point LNG in Maryland and Cameron LNG in Louisiana, are best
placed to secure approval and financing from the private sector. Further complicating the picture for U.S.
gas liquefaction facilities.
exports are uncertainties over future global demand for LNG. Australia and Qatar, among other countries, have expanded their own gas exports in
recent years and are well-placed to supply potential customers in Asia and Europe. Due to the cost of liquefying and transporting gas, U.S.
exports may not be cost-competitive if domestic prices rise in coming years. The Department of Energy said it conducted an "extensive, careful
review" that considered "the economic, energy security, and environmental impacts," and found that the project was "not inconsistent with the
public interest." The department said that in considering future export applications, it will consider market conditions, including projections about
natural-gas prices, supply and demand. All remaining permit applications will be considered on a case-by-case basis, the department said,
keeping in mind the cumulative amount of authorized gas exports.
111
LNG K2 Manufacturing
LNG Key to Manufacturing
Dotten 13 (Michael Dotten has practiced in the energy, environmental, and administrative law fields for over
thirty years, representing utilities, energy project developers, large industrial energy consumers, and governmental
agencies. He also serves as an arbitrator and mediator in complex regulatory and commercial disputes. Mike has
successfully represented clients in a broad range of energy and environmental matters, including litigating energy
rate and regulatory matters before the Federal Energy Regulatory Commission. "Domestic Natural Gas Prices and
Manufacturing" http://www.martenlaw.com/newsletter/20130211-lng-and-oil-exports-controversy)SM
The increase in domestic oil and gas production is fueling significant domestic economic
activity. Direct economic impacts include growing demand for labor and products
associated with the exploration, production, and transmission of natural gas and oil, such
as pipes, drill bits, excavators, chemicals, asphalt, and pumps.[30] Increased natural gas
production has also driven down domestic electric power generation costs, and hence,
market electricity prices . Similarly, abundant and low cost natural gas is now available as chemical feedstock for domestic
industry. The impact of shale gas could allow industry to add one million workers, and reduce
natural gas expenses by as much as $11.6 billion annually through 2025.[31] Indeed, examples abound
of the American industrial renaissance that is largely attributable to the oil and gas boom. For example, investments are being made in steel
production to support the shale gas industry.[32] Chemical manufacturing facilities are being constructed and expanded across the country,
particularly along the Gulf Coast.[33] In
Louisiana alone, capital investments in natural gas induced
projects are expected to exceed $20.2 billion over the next nine years.
112
LNG K2 Free Trade
LNG is key to other countries geopolitical free trade. Japan proves.
Dotten 13 (Michael Dotten has practiced in the energy, environmental, and administrative law fields for over
thirty years, representing utilities, energy project developers, large industrial energy consumers, and governmental
agencies. He also serves as an arbitrator and mediator in complex regulatory and commercial disputes. Mike has
successfully represented clients in a broad range of energy and environmental matters, including litigating energy
rate and regulatory matters before the Federal Energy Regulatory Commission. "Free Trade and Geopolitics"
http://www.martenlaw.com/newsletter/20130211-lng-and-oil-exports-controversy)SM
LNG exports trigger other geopolitical considerations in addition to free trade obligations.
Commentators have observed that increased LNG exports from the United States would provide allies with alternate supplies – particularly in
Europe where Russia has used natural gas exports for political leverage. Similarly, some of the United States’ most important allies are not
covered by FTAs. Japan, in particular, is the world’s top importer of LNG, but is not presently covered by an FTA. Japan’s
LNG
imports soared over 11 percent in 2012 – due in large part to the ramp-up of natural gasfired electric generation in the wake of the Fukushima nuclear crisis.[42] Japan, along with
other markets in Asia and Europe, thus have a growing interest in U.S. LNG.
113
LNG K2 Asian Economy
LNG key to Asia economy
Kumar et al 11(Satish Kumar, Hyouk-Tae Kwonb, Kwang-Ho Choib, Jae Hyun Choa,
Wonsub Lima, Il Moona were the contributing authors. Satish Kumar is an Indian activist and
editor. He has been a Jain monk, nuclear disarmament advocate, pacifist, and is the current editor
of Resurgence & Ecologist magazine. Satish Kumar has been quietly setting the Global Agenda
for change for over 50 years. "Current status and future projections of LNG demand and
supplies: A global prospective"
http://www.sciencedirect.com/science/article/pii/S0301421511002618) SM
Growing population and expanding economies are main causes of increasing global energy demand. World's
energy demand is
expected to surge by an average of 1.3% per year (Outlook for Energy, 2008) and gas
consumption is expected to account for about a quarter of global energy consumption by
2030, up about 20% from now. Today, 80% of global energy demand is provided by oil, coal and gas (fossil fuels) due to their
abundance, affordability and availability. It has been projected that China (Lin et al., 2010), which today meets almost 90% of its power needs
with coal, will see its energy demand for power generation more than double by the next century, surpassing U.S. demand by more than one-third
(Lin et al., 2010 and Parik et al., 2009).
The natural gas industry is projected to be helpful in meeting this
growing global energy demand. The natural gas supplies have high possibilities of
fluctuations as residential and commercial natural gas demand is seasonal, temperature
dependent and inelastic. The gas demand must be covered as it arises. To respond to such variations
requires flexibility (the ability to adapt supply to foreseeable volume variations in demand and to adjust for erratic fluctuations in demand) (IEA,
2002). Therefore ,
industry.
flexibility of natural gas supply is essential for efficient operation of the gas
Gas companies have developed various flexibility tools to harmonize the variations and fluctuations in gas demand with relative
to the rigidity of gas supply. These tools mainly work on the volumes of supply and demand. Market liberalization is changing the traditional
landscape. It brings a new market-driven approach to flexibility. The
natural gas is supplied, from the gas
producing areas to the gas consuming areas, either by pipeline or in a container or tanker
in liquid form.
114
LNG K2 Europe Economy
LNG key to Europe economy
Reymond 7 (Mathias Reymond has a Ph.D. in economics, Université Montpellie"European key issues
concerning natural gas: Dependence and vulnerability" http://www.sciencedirect.com/science/artic
le/pii/S0301421507000638) SM
The demand for natural gas, as a replacement for more expensive, less environmentally
friendly resources, has significantly increased in Europe over the last 15 years . Its value,
particularly in terms of electricity production, has led to an increase in demand. The amount of electricity produced from gas in Europe, having
initially declined until 1990, has subsequently increased three-fold over the following 15 years. The percentage of electricity produced from oil
over the last 30 years is 6.5 times less and that generated from nuclear power has remained relatively stable since 1990. The
amount of
electricity produced from coal decreased from 37% in 1974 to 27% in 2004. In addition,
the construction of several combined-cycle power plants has made European electricity
producers dependent on imported gas. The result is a lower elasticity of demand. The increase in the use of gas for
electricity production is due to lower investment costs than for nuclear power, which in turn means profits can be made more quickly.
Nevertheless, the cost of producing electricity in combined-cycle power plants is determined by the fluctuation of natural gas prices which makes
the price of electricity higher in the long term.1 As
one of the consequences of energy market liberalization,
this phenomenon implies that energy producers give higher priority to short-term
profitability than to long-term efficiency. The price of coal is the main competitor to gas in power generation: “when
making an investment, power generators base their decisions on projected relative prices between coal and gas”
115
Solvency
116
OCS K2 Exports
The OCS is key to exports due to the high resources found in the area.
Christopher 14 (Warren Minor Christopher was an American lawyer, diplomat and politician. During Bill
Clinton's first term as President, Christopher served as the 63rd Secretary of State." The Outer Continental Shelf
Lands Act: Key to a New Frontier" http://www.jstor.org/stable/1226506) SM
The Continental Shelf promises enormous riches. An acre of ocean may produce more food than an acre of our best
farm land. There is more animal life in the ocean than on land . And the Shelf is thought to contain every major
mineral, some in large quantities.8 For instance, potential petroleum reserves of the outer Continental Shelf off Texas alone
have been estimated at 7.8 billion barrels of oil and 39 billion m.c.f. (million cubic feet) of gas,9 while the sulphur reserves in the Gulf of Mexico
area have been estimated to be valued at three billion dollars.1"
Even more important, scientists and engineers are
in agreement that discovery and development of the potential resources of this off- shore
area are only in the very earliest stage.
The "Outer Continental Shelf Lands Act" is the official title of an epochal statute
signed by the President on August 7, I953.' By this Act Congress for the first time asserted jurisdiction over some 26I,OOO square miles of sea
bed off our shores, an area almost one-tenth that of the continental United States.2 The
mineral resources and food
potential of this area have been said to make its acquisition more important to the nation
than the Louisiana Purchase.' To the people who will man the amazing installations devised to develop these resources,
Congress has applied a unique combination of federal and state laws. A new federal leasing pol- icy has been forged to meet the special needs of
this submerged area. And in addition, this Act is of vital importance in international law. Doubts about the proclamation have also occasionally
been expressed on the ground that the Executive could not validly take such action without congressional concurrence. The merits of this
argument need not detain us because Congress did concur even before the passage of the Outer Continental Shelf Lands Act. Section 9 of the
Submerged Lands Act provided that the United
States' jurisdiction ad control of the natural resources of
the outer Shelf "is hereby confirmed." Senator Cordon, who seems to have been largely
responsible for the inclusion of this provision, de- scribed it as an "affirmation by
legislative confirmation of the Presidential Proclamation.
Offshore terminals uniquely key to exports
Raaijmakers 14 (René Raaijmakers holds a Master of Science degree in civil engineering from Delft
University of Technology. He joined Bluewater in 1996 as a concept development and design engineer responsible
for performing design, analyses and model testing on SPM buoys and mooring and riser systems for floating
production facilities "Offshore terminals for the transportation of Liquefied Petroleum Gas"
http.//www.porttechnology.org/images/uploads/technical_papers/PT26-22.pdf) SM
Key Advantages of offshore terminals incorporating an SPM: No need for port/harbour
infrastructure – Products will be imported or exported via a pipeline without the need for
any quays. This provides tremendous flexibility to the project team when selecting the
optimum location with respect to license for the tank facilities, the in-land infrastructure
117
and markets. No need for dredging – The terminals are located in deeper and open waters,
thus no depth maintenance by dredging is required. Less need for tugs and no port-pilots
or harbor operations – The open waters are far less congested than inshore waterways, correspondingly increasing the
maneuverability and safety of marine operations. Easy and quick implementation of terminal – Offshore
Terminals can be built quickly and can be operational in less than one year after project
sanction. No tanker size restrictions – SPM systems can be designed for any tanker size.
Tankers are moored at the bow only, which makes the system virtually insensitive to length and width of the vessel. The SPM is, therefore, the
best suited design to include in most offshore terminals. All-weather functionality and rapid turnaround – A key feature of an SPM system is its
weathervaning capability. The buoy is able to weathervane freely through 360°. This allows the tanker to approach the system from any direction.
Therefore, depending on the environmental conditions at any given time, the most favorable direction is chosen for tanker approach. Once
moored, the vessel will find a neutral position that results in the lowest environmental loads and safest vessel sea-keeping.
Minimum
manning requirement – Since berthing can take place from any direction and only a single
mooring point at the bow has to be established, the manning requirement is reduced to
assistance of passing over the mooring hawser and the floating hoses to the vessel. Minimal
inspection and maintenance requirements.
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Industry Ready
Natural gas exports are economically viable
Levi 12 [Michael Levi, David M. Rubenstein Senior Fellow for Energy and the Environment Director of the Program on Energy Security
and Climate Change Council on Foreign Relations Michael Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment at
the Council on Foreign Relations (CFR) and Director of the CFR program on energy security and climate change. His work focuses on foreign
and domestic policy related to climate change, energy security, nuclear weapons. Levi is the author of two books, most recently On Nuclear
Terrorism (Harvard University Press, 2007) and is at work on two more. The first explores the recent boom in American energy, evaluating its
consequences and assessing policy options for harnessing it; the second, with Elizabeth Economy, explores the causes and consequences of
China’s quest for natural resources. Other recent work has focused on the international political economy of clean energy innovation, global oil
markets, the Canadian oil sands, and climate diplomacy. Michael is a member of the Strategic Advisory Board for NewWorld Capital LLC, a
private equity firm focused on environmental opportunities, and a member of the External Advisory Board to the Princeton University Carbon
Mitigation Initiative (CMI). He holds a Bachelors of Science in mathematical physics from Queen’s University, an MA in physics from Princeton
University and a Ph.D. in war studies from the University of London.; June 2012, “A Strategy for U.S. Natural Gas Exports”
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20exports%20levi/06_exports_levi.pdf\\ML]
But the world looks different from overseas. In
Europe, a thousand cubic feet of gas sold on the spot market
for about $11 as of March 2012, and in East Asia, the price was north of $15 (Platts 2012). These
prices are all the more striking since it costs roughly $4 to liquefy and ship a thousand
cubic feet of natural gas from the United States to Europe, and only about $2 more to send
it to Asia (Morse et al. 2012). Yet the United States does not export natural gas to those markets.
Many have thus argued that it is leaving money on the table. The potential profits from exports have
prompted several companies to apply for permits to export liquefied natural gas (LNG) without restriction. In March 2011, the U.S. Department
of Energy (DOE) approved the first such permit, for Cheniere Energy, and in April 2012, the Federal Energy Regulatory Committee (FERC)
approved Cheniere’s Sabine Pass, Louisiana facility. As of May 2012, another eight projects had applied to the DOE for similar permits, and four
more had applied for permits to export LNG to countries with which the United States has free trade agreements (DOE 2012). The DOE has
signaled that it will begin making decisions on these applications after receiving the results of a contractor study on the possible impacts of LNG
exports in late summer 2012. The DOE can be expected to solicit input from several agencies, including the Departments of State and Commerce,
the Environmental Protection Agency, and the Office of the U.S. Trade Representative, as well as from the National Economic Council, the
National Security Council, and the Council on Environmental Quality in making its ultimate decisions. Indeed, if currently anticipated price
differences hold up, and fully free trade in natural gas is allowed, several developers will likely attempt to build LNG export terminals. A
wide range of analysts have claimed that as many as six billion cubic feet of daily exports
by the end of the decade is plausible. That trade could expand U.S. gas production
substantially and, in principle, net U.S. producers, exporters, and their suppliers north of
$10 billion a year.2 Gas exports could help narrow the U.S. current account deficit, shake
up geopolitics, and give the United States new leverage in trade negotiations. This has led
many people to advocate for a U.S. policy that allows—or even encourages—natural gas
exports.
The industry is ready
API (American Petrol Institute) March 14 The American Petroleum Institute, commonly
referred to as API, is the largest U.S trade association for the oil and natural gas industry.
.(Liquefied Natural Gas: Exports - America’s Opportunity and
Advantage)http://www.api.org/policy-and-issues/policy-items/lng-exports/liquefied-natural-gasexports-americas-opportunity-and-advantage. NT
119
If we look at natural gas exploratory and development wells in 2012 versus 2013, we see that
the industry is ready to expand future natural gas production with development drilling.
America’s newfound abundance of natural gas resources is a boon to the nation. It is
creating jobs, reducing home heating and electric bills and lowering energy and raw
materials costs for businesses . And the opportunity to do more is before us – to produce more
natural gas, spur additional economic activity and create even more jobs – by serving
international markets as well as American ones. America’s oil and natural gas companies are
ready and should be allowed to supply other markets through exports , given the trade, jobs,
and other economic benefits LNG exports are indisputably in our national interest, and the
U.S. Department of Energy should approve pending applications for authorization to
export natural gas without delay
Huge opportunity for LNG exporting
API 14 — American Petroleum Institute, the largest U.S trade association for the oil and natural gas
industry. It claims to represent about 400 corporations involved in production, refinement, distribution,
and many other aspects of the petroleum industry. The association’s chief functions on behalf of the
industry include advocacy and negotiation with governmental, legal, and regulatory agencies; research
into economic, toxicological, and environmental effects; establishment and certification of industry
standards; and education outreach. API both funds and conducts research related to many aspects of the
petroleum industry, 2014. (“Liquefied Natural Gas EXPORTS - America’s Opportunity and Advantage”,
API, March 2014, available at http://www.api.org/policy-and-issues/policy-items/lng-
exports/~/media/Files/Policy/LNG-Exports/LNG-primer/Liquefied-Natural-Gas-exportslowres.pdf, accessed on 7/2/14)
America is in the midst of an energy revolution. As of 2012, unconventional oil and natural
gas development supported 2.1 million jobs, and it is projected to support 3.9 million jobs
by 2025. This year, according to EIA, we surpassed Russia as the world’s energy superpower –
producing more oil and natural gas than any other country. At the same time, we’ve
reduced U.S. carbon dioxide emissions to near 20-year lows thanks, in part, to the carbon
advantages of natural gas. But, for American workers, the best is yet to come. The export of
liquefied natural gas – or LNG -- represents one of the most promising economic
opportunities of the shale revolution. These exports will significantly reduce our trade
deficit, increase government revenues, grow the economy, and support millions of U.S. jobs
in engineering, manufacturing, construction, and facility operations. America is in a global
race to build this infrastructure and secure a competitive position in the international
market. More than 60 international LNG export projects are currently planned or under
construction around the world, and those nations that act quickly to attract these
investments will reap the economic rewards. Fortunately, U.S. workers are in a very good
position to win that race. The opportunities associated with LNG exports will extend
beyond natural gas-producing states. According to ICF, by 2035: • LNG exports could
contribute as much as $10 to $31 billion per state to the economies of natural gas120
producing states, such as Texas, Louisiana, and Pennsylvania. • Non-natural-gas-producing
states will also benefit, partly due to the boost in demand for steel, cement, equipment, and
other goods. States with a large manufacturing base, such as Ohio, California, New York,
and Illinois, will see economic gains as high as $2.6 to $5.0 billion per state. • Natural gasproducing states could see employment gains as high as 60,000 to 155,000 jobs; and large
manufacturing states, such as California and Ohio, will see employment gains upwards of
30,000 to 38,000 jobs in 2035. • There could also be significant job growth in states where
LNG export terminals could be built. For example, in a high export scenario, in which an
Alaska-based terminal is built, Alaska can expect up to a $10 billion addition to state
income and over 36,000 added jobs resulting from LNG exports.
LNG should be the favored form of energy
Reymond 7 (Mathias Reymond has a Ph.D. in economics, Université Montpellie"European key issues
concerning natural gas: Dependence and vulnerability" http://www.sciencedirect.com/science/artic
le/pii/S0301421507000638) SM
The percentage of LNG exchanges has increased due to several key factors. First of all, LNG
allows gas importers to
diversify their suppliers and supply routes. This is not possible with pipelines. Secondly, using LNG
contributes to the development of financial viability of areas, which were difficult to access
via gas pipelines. As it is possible for importers to adapt their supply due to energy market liberalization, they may operate with a
greater flexibility. In addition, LNG seems to be a potential factor for competition between importers,
thus enabling the worldwide convergence of prices. Due to the fact that the productions (United States and Norway)
supplying large consuming countries (North America and Europe) will decrease, there is a need for working with geographically distant
producers. Lastly,
we may foresee that the emergence of new markets in Asia, which are not
linked to existing gas pipeline networks, will favor the use of LNG. Discovering significant
gas resources in new locations encourages firms to invest in liquefaction plants.
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LNG Safe
LNG is safe and easy to export/transport
API (American Petrol Institute) March 14 The American Petroleum Institute, commonly
referred to as API, is the largest U.S trade association for the oil and natural gas
industry.(Liquefied Natural Gas: Exports - America’s Opportunity and
Advantage)http://www.api.org/policy-and-issues/policy-items/lng-exports/liquefied-natural-gasexports-americas-opportunity-and-advantage. NT
LNG, or liquefied natural gas, is a clear, odorless, noncorrosive, nontoxic liquid that is formed
when natural gas is cooled to around -260 F. This shrinks the volume by about 600 times,
making the resource easier to store and transport through marine shipments. LNG is not
stored under pressure and is not explosive or flammable in its liquid state, and it cannot
be released rapidly enough to cause overpressures associated with explosions. LNG has
been safely handled for several decades, with LNG vessels having made more than 100,000
voyages without major accidents or safety problems. The LNG industry is highly
regulated by the Federal Energy Regulatory Commission , the Department of Transportation,
the U.S. Coast Guard and the Department of Homeland Security, and other agencies to ensure
that vessels, facilities and personnel provide and deliver safe operations and transport.
LNG is safe to export
API 14 — American Petroleum Institute, the largest U.S trade association for the oil and natural gas
industry. It claims to represent about 400 corporations involved in production, refinement, distribution,
and many other aspects of the petroleum industry. The association’s chief functions on behalf of the
industry include advocacy and negotiation with governmental, legal, and regulatory agencies; research
into economic, toxicological, and environmental effects; establishment and certification of industry
standards; and education outreach. API both funds and conducts research related to many aspects of the
petroleum industry, 2014. (“Liquefied Natural Gas EXPORTS - America’s Opportunity and Advantage”,
API, March 2014, available at http://www.api.org/policy-and-issues/policy-items/lng-
exports/~/media/Files/Policy/LNG-Exports/LNG-primer/Liquefied-Natural-Gas-exportslowres.pdf, accessed on 7/2/14)
LNG, or liquefied natural gas, is a clear, odorless, noncorrosive, nontoxic liquid that is
formed when natural gas is cooled to around -260 F. This shrinks the volume by about 600
times, making the resource easier to store and transport through marine shipments. LNG
is not stored under pressure and is not explosive or flammable in its liquid state, and it
cannot be released rapidly enough to cause overpressures associated with explosions. LNG
has been safely handled for several decades, with LNG vessels having made more than
100,000 voyages without major accidents or safety problems. The LNG industry is highly
regulated by the Federal Energy Regulatory Commission, the Department of
122
Transportation, the U.S. Coast Guard and the Department of Homeland Security, and
other agencies to ensure that vessels, facilities and personnel provide and deliver safe
operations and transport.
123
LNG Key
Liquefied Natural Gas will be key to decarbonize the economy and improve
energy security
UNECE (United Nations Economic Commission for Europe) 15 April 2014 “Liquefied Natural
Gas will be key to decarbonize the economy and improve energy security”
http://www.unece.org/index.php?id=35399
Liquefied Natural Gas (LNG) has the potential to turn the natural gas market into a truly
global one, thus allowing natural gas to play a full role in transforming the energy system to
underpin a sustainable future. In addition, in view of the uncertainties caused by recent
geopolitical developments in Europe and the Mediterranean basin, LNG can improve regional
and global energy security. These objectives can only be met if governments implement enabling
policies that are clear, transparent and stable over the long-term. These are the main findings of
the study on the Current status and perspectives for LNG, completed by a team of
international experts working under the auspices of UNECE, released today in Geneva.
The study finds that:
LNG represents 10% of global natural gas demand (estimated in 2012 at 3,300 bcm) and 32% of
global gas trade, and is growing faster than overall gas demand. Because of the flexibility it
offers in the delivery of gas, offering the possibility to divert flows or re-export as market
conditions change, LNG is a key feature in the globalization of the gas market, especially if a
global LNG pricing pattern emerges. LNG gives buyers many options to secure gas supply
without necessarily having to commit to long term/high volume gas contracts with a specific
producer. Spot/short-term transactions represent 30% of total LNG trade today and prospects
are that the LNG market will enjoy a fair degree of liquidity by 2020. The current LNG price at
Henry Hub (Louisiana) is less than half the price at European hubs and less than one-fourth the
average price paid in Asian markets. LNG transport costs alone do not justify such differences.
Since access to gas is not constrained by pipeline capacity availability or gas transit
disputes, LNG can improve the security and diversification of supply. Given the size and
cost of its infrastructure, LNG is ideal for small, isolated markets or markets that require
negotiating leverage with a supplier. LNG has underpinned strong growth in gas-fired power
generation in countries that changed their nuclear policies following the Fukushima accident.
Regional trends
Asia represents 60% of global LNG supply and its share is expected to grow in view of rising
demand from emerging economies and attractive prices for LNG. In Japan, LNG demand for
power generation increased by around 30% in fiscal year 2011 after the Fukushima nuclear
accident. China and India will be especially important in future LNG market dynamics In
Europe, decreasing domestic gas production and efforts to diversify supply sources are drivers
for LNG growth. LNG’s market share is forecast to move up from 15% in 2010 to 24% in 2020
according to the BP Outlook US shale gas deliveries grew from about 20 bcm in 2005 to an
estimated 280 bcm in 2013, 40% of total US gas production. The US Department of Energy
has authorized exports of 35 bcm of surplus natural gas in the form of LNG in 2016, and
124
further projects have been submitted for approval. Overall US exports could reach around
70 bcm by the mid-2020s. LNG exports from U.S. and Canadian terminals are economically
competitive in all major markets, including Europe and Asia Pacific, based on forward gas price
differentials.
125
2AC A2 Insuff. Infrastructure
There is already a lot of LNG infra,structure and it is bound to grow much
more.
UNECE (United Nations Economic Commission for Europe) 15 April 2014 “Liquefied Natural
Gas will be key to decarbonize the economy and improve energy security”
http://www.unece.org/index.php?id=35399
Liquefaction
Liquefaction is the most capital and energy intensive component of the LNG value chain. It
consists of chilling natural gas to the point where it becomes liquid, at an average temperature of
–160o C (–260o F), which is an energy-intensive process: 275-400 kWh/ton LNG. This step
represents more than half of the total capital investment and more than half of LNG production
costs.
Regasification
Regasification (or vaporization) consists of returning LNG to its regular gaseous phase at
about 5º C using heat exchangers. Typically, regasification represents 10% of total
investment in the LNG value chain and 8% of gas production cost. More than 75% of the
world’s regasification capacity is located in five countries: Japan 30%, US, 20%, South Korea,
12%; Spain, 8%, and UK, 6%, and total regasification capacity is much higher than liquefaction
capacity.
Infrastructure
At the end of 2013, the LNG industry was operating more than 90 liquefaction trains with a
production capacity close to 280 million tons per year, a fleet of more than 360 LNG
tankers, and nearly 100 regasification LNG terminals.
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2AC Ext. Plan Solves
Empirics Prove
UNECE (United Nations Economic Commission for Europe) 15 April 2014 “Liquefied Natural
Gas will be key to decarbonize the economy and improve energy security”
http://www.unece.org/index.php?id=35399
The case of Spain
LNG contributed to development of a gas market in Spain, a country fully dependent on
gas imports and with limited connections to the European gas grid. More than 60% of
Spain’s annual gas demand of 34 bcm is met by LNG. The LNG terminals have ample
available capacity and access is granted to third parties by a fully independent operator. The
LNG terminals procure the fuel that the country’s combined cycle gas turbines need for base
load generation and to support major investments in renewable energy. Spain has been the
largest EU LNG importer in Europe for many years, although UK has unloaded more quantities
in recent years. More than 45,000 LNG trucks a year are loaded at the regasification
terminals and sent to approximately 400 satellite plants close to industrial and residential
customers’ sites around the country.
127
Solvency
128
Shale
129
Shale Unsustainable: 2AC
Shale gas is unsustainable
Ahmed 13 — Nafeez Ahmed, writer for the Guardian, bestselling author, investigative
journalist and international security scholar. He is executive director of the Institute for Policy
Research & Development, and author of A User's Guide to the Crisis of Civilization among other
books. He writes for the Guardian on the geopolitics of environmental, energy and economic
crises on his Earth insight blog. (“Shale gas won't stop peak oil, but could create an economic
crisis”, Guardian News and Media Limited, June 21, 2013, Available Online at
http://www.theguardian.com/environment/earth-insight/2013/jun/21/shale-gas-peak-oileconomic-crisis , accessed 3/13/14)
The report estimates shale resources outside the US by extrapolation based on "the geology
and resource recovery rates of similar shale formations in the United States." Hence, the
EIA concedes that "the extent to which global technically recoverable shale resources will
prove to be economically recoverable is not yet clear." Two years ago, following the
publication of the EIA April 2011 report a New York Times investigation obtained internal
EIA communications showing how senior officials, including industry consultants and
federal energy experts privately voiced scepticism about shale gas prospects. One internal
EIA document said oil companies had exaggerated "the appearance of shale gas well
profitability" by highlighting performance only from the best wells, and using overly
optimistic models for productivity projections over decades. The NYT reported that the EIA
often "relies on research from outside consultants with ties to the industry." The latest EIA shale
gas estimates, contracted to ARI, is no exception. ARI, according to the NYT's 2011 article, has
"major clients in the oil and gas industry" and the company's president, Vello Kuuskraa, is "a
stockholder and board member of Southwestern Energy, an energy company heavily involved in
drilling for gas in the Fayetteville shale formation in Arkansas." Independent studies published
over the last few months cast even more serious doubt over the viability of the shale gas boom. A
report released in March by the Berlin-based Energy Watch Group (EWG), a group of European
scientists, undertook a comprehensive assessment of the availability and production rates for
global oil and gas production, concluding that: "... world oil production has not increased
anymore but has entered a plateau since about 2005." Crude oil production was "already
in slight decline since about 2008." This is consistent with the EWG's earlier finding that
global conventional oil production had peaked in 2006 - as subsequently corroborated by
the International Energy Agency (IEA) in 2010. The new report predicts that far from
growing inexorably, "light tight oil production in the USA will peak between 2015 and
2017, followed by a steep decline", while shale gas production will most likely peak in 2015.
Shale gas prospects outside the US are incomparable to gains made so far there "since
geological, geographical, and industrial conditions are much less favourable."Consequently,
global gas prices are likely to increase rather than follow the initial US trend. In the meantime,
conventional oil production will continue declining, dropping as much as 40 per cent by 2030.
The upshot is that the US "will not become a net oil exporter." The EGW report follows two
130
other reports published earlier this year also challenging the conventional wisdom. A PostCarbon Institute study authored by geologist David Hughes, who worked for 32 years as a
research manager at the Geological Survey of Canada, analysed US production data for 65,000
wells from 31 shale plays using a database widely used in industry and government. While
acknowledging that shale has dramatically reversed "the long-standing decline of US oil and
gas production", this can only: "... provide a temporary reprieve from having to deal with
the real problems: fossil fuels are finite, and production of new fossil fuel resources tends to
be increasingly expensive and environmentally damaging." Despite accounting for nearly
40 per cent of US natural gas production, shale gas production has "been on a plateau since
December 2011 - 80 per cent of shale gas production comes from five plays", some of which are
already in decline. "The very high decline rates of shale gas wells require continuous inputs of
capital - estimated at $42 billion per year to drill more than 7,000 wells - in order to maintain
production. In comparison, the value of shale gas produced in 2012 was just $32.5 billion." The
report thus concludes: "Notwithstanding the fact that in theory some of these resources have very
large in situ volumes, the likely rate at which they can be converted to supply and their cost of
acquisition will not allow them to quell higher energy costs and potential supply shortfalls."
Report author Hughes said that the main problem was the exclusion of price and rate of supply:
"Price is critically important but not considered in these estimates." He added: "Only a small
portion [of total estimated resources], likely less than 5-10 per cent will be recoverable at a low
price..."Shale gas can continue to grow but only at higher prices and that growth will
require an ever escalating drilling treadmill with associated collateral financial and
environmental costs – and its long term sustainability is highly questionable." Another
report was put out by the Energy Policy Forum, and authored by former Wall Street analyst
Deborah Rogers - now an adviser to the US Department of the Interior's Extractive Industries
Transparency Initiative. Rogers warns that the interplay of geological constraints and financial
exuberance are creating an unsustainable bubble. Her report shows that shale oil and gas reserves
have been: "... overestimated by a minimum of 100% and by as much as 400-500% by operators
according to actual well production data filed in various states... Shale oil wells are following the
same steep decline rates and poor recovery efficiency observed in shale gas wells." Deliberate
overproduction drove gas prices down so that Wall Street could maximise profits "from mergers
& acquisitions and other transactional fees", as well as from share prices. Meanwhile, the
industry must still service high levels of debt due to excessive borrowing justified by
overinflated projections: "... leases were bundled and flipped on unproved shale fields in much
the same way as mortgage-backed securities had been bundled and sold on questionable
underlying mortgage assets prior to the economic downturn of 2007." Seeking to prevent
outright collapse, the report argues, the US is ramping up gas exports so it can exploit the
difference between low domestic and high international prices "to shore up ailing balance sheets
invested in shale assets." Rogers, who testified last month before the Senate Committee on
Energy and Natural Resources, also expressed scepticism about the EIA's latest assessment: "The
EIA actually does retrospective assessments of their forecasting and their track record is dismal...
They admit that they overestimated natural gas production 66 per cent of the time and crude 59.6
per cent of the time in their March 2013 assessment for 2012." She added that "there is definitely
a bubble." Though it would not have an impact as devastating as the banking crisis, she said:
131
"The oil majors do have losses, but the smaller independents are being shaken out. Chesapeake
and others are struggling, like Devon, Continental, Kodiak and Range. Without exception, they
all have had a significant deterioration in negative free cash since 2010. This is obviously not
sustainable." The impact of this would be greater centralisation, with smaller companies and
their assets being absorbed by the oil majors through mergers and acquisitions. Rogers said:
132
Feasibility
133
A2 Safety Issues
Offshore drilling is safe
Milito 14 — Erik Milito, the group director of upstream and industry operations for the
American Petroleum Institute, 2014. (“Offshore Drilling Is Safer”, Forbes, April 25, 2014,
available at http://www.forbes.com/sites/realspin/2014/04/25/offshore-drilling-is-safer/, accessed
on 7/6/14)
Four years after the Deepwater Horizon oil spill in the Gulf of Mexico, we’re well into a new era
of safety for offshore energy exploration. Even before cleanup in the Gulf of Mexico was
complete, the oil and natural gas industry started working with federal regulators on a
comprehensive review of offshore operations. We in the industry clearly understand that
the future of offshore drilling depends on our ability to conduct operations safely. Federal
regulators and the public should rest assured. Despite claims to the contrary, the oil and
natural gas industry and the federal government have together taken great strides to
enhance the safety of offshore operations. Four joint industry task forces have now
reexamined every aspect of offshore drilling, from equipment and operating procedures to
subsea well control and oil spill response. Working with experienced regulators from the
Department of Interior, industry experts developed new recommendations and standards
for operations in both deep and shallow water exploration. One of the most urgent needs was
clearly to boost the rapid response capability for containment in case of a leak. New
collaborative containment companies established after the 2010 spill now stand ready to deploy
state-of-the-art containment technology at the first indication of a spill at the wellhead. Our task
forces found room for improvement in numerous other areas. The industry is now following
newly established or revised standards in areas ranging from well design and cementing to
blowout prevention, subsea equipment for capping wells, and protections for workers responding
to a spill. The American Petroleum Institute maintains more than 600 industry standards
covering all aspects related to production, and more than 100 have been incorporated into federal
regulations. Even before the Deepwater Horizon accident, spills were rare. Over the past
decade, 99.999% of oil shipped to the United States reached its destination without
incident. More than 40,000 total wells have been drilled in the Gulf of Mexico, and at the
time of the spill, 699 wells were operating at depths of 5,000 feet or greater, while more
than 3,900 were in production at 1,000 feet or more. It’s a common and understandable
misconception that deep water operations are inherently more risky. While deep water
wells present greater technical challenges in some cases, safety standards also change to
reflect the difference. As a result, working in deeper water does not equate to greater risk.
Obviously, even one incident is too many, let alone one on the scale of the 2010 crisis.
That’s why the industry has also created the Center for Offshore Safety (COS). Its mission
is to work with independent third-party auditors and government regulators to create an
industry-wide culture of continuous safety improvement. The federal Bureau of Safety and
Environmental Enforcement (BSEE) has already incorporated a number of guidelines
COS devised into its own regulations. BSEE is one of three new agencies formed from the
134
reorganization of the former Minerals Management Service in response to the Gulf spill. In
recent congressional testimony, Director Brian Salerno noted that 25 of the 33 BP
Deepwater Horizon Commission recommendations have been acted upon or are in the
process of being addressed. COS is also working on a major initiative on prevention. The
Center collects and analyzes data to better detect potential problems before they occur. The
prevention protocol includes a “blind source” reporting system, which allows companies to
provide data without incurring punitive action, enabling us to learn more and faster. Safe and
responsible offshore development is an essential part of America’s energy security. According to
new projections from the U.S. Energy Information Administration, domestic production has been
increasing so quickly that by 2040, the United States can be entirely energy self-sufficient.
Improved energy security has been the goal of every American president since Richard Nixon
and the 1973 oil embargo. Energy security on a scale that now seems likely was unthinkable as
recently as 10 years ago. Making energy independence a reality requires the ability to unlock our
abundant natural resources safely. The oil and natural gas industry understands and accepts that
challenge.
135
Disad Answers
136
Environment DA
137
No Link
No environmental harm – offshore drilling has a 100% safety record and
reduces leakages
Thornley 9 (Drew – Independent policy analyst focused primarily on energy, teaches
business law at Concordia University in Austin, Texas. graduated summa cum laude with
a B.A. in economics from The University of Alabama in 2002 and received a J.D. from
Harvard Law School in 2005, “ENERGY & ENVIRONMENTAL MYTHS”, April 2009,
http://www.manhattan-institute.org/energymyths/myth8.htm)
Since 1975, offshore drilling in the Exclusive Economic Zone (within 200 miles of U.S. coasts) has a
safety record of 99.999 percent , meaning that only 0.0001 percent of the oil produced has been
spilled.[103] With regard to the O uter C ontinental S helf (U.S. waters under federal, rather than state,
jurisdiction),[104] between 1993 and 2007 there were 651 oil spills, releasing 47,800 barrels of oil. Given 7.5 billion barrels of oil
produced during that period, one barrel of oil has been spilled in the OCS per 156,900 barrels produced.[105] Research published in 2000 by the
U.S. Minerals Management Service (MMS)[106] documents the decreasing occurrence of crude-oil spills in the OCS. Revising previous
estimates first published in 1994, the authors analyzed data through 1999 and concluded that oil-spill rates for OCS platforms, tankers, and barges
continued to decline.[107] Additionally, the number of oil spills from platforms, tankers, and pipelines is small, relative to the amount of oil
extracted and transported. Even so, oil spills remain an unpleasant reality of offshore oil drilling. Certainly, any amount of oil spilled into the
ocean is undesirable, but offshore oil operations
contribute relatively little of the oil that enters ocean
waters each year. For example, ocean floors naturally seep more oil into the ocean than do oil-drilling accidents and
oil-tanker spills combined. (However, such seepage generally does not rise to the surface or reach the coastlines and, thus, is not as apparent as
oil-drilling spills.) According to the National Academies’ National Research Council, natural processes are responsible for over 60 percent of the
petroleum that enters North American ocean waters and over 45 percent of the petroleum that enters ocean waters worldwide.[108] Thus, in
percentage terms, North America’s oil-drilling activities spill less oil into the ocean than the global average, suggesting that our drilling is
comparatively safe for the environment. Ironically, research
shows that drilling can actually reduce natural
seepage, as it relieves the pressure that drives oil and gas up from ocean floors and into ocean
waters. In 1999, two peer-reviewed studies found that natural seepage in the northern Santa Barbara Channel was significantly reduced by oil
production. The researchers documented that natural seepage declined 50 percent around Platform Holly
over a twenty-two-year period, concluding that, as oil was pumped from the reservoir, the pressure that drives natural
seepage dropped.[109] Offshore oil drilling is carefully monitored for environmental safety. Using state-of-the-art
technology and employing a range of procedural safeguards, U.S. offshore drilling has a
track record of minimal environmental impact . Modern oil drilling is even designed to withstand hurricanes and
tropical storms. According to the MMS, 3,050 of the Gulf of Mexico’s 4,000 platforms and 22,000 of the 33,000 miles of the Gulf’s pipelines
were in the direct path of either Hurricane Katrina or Hurricane Rita. The hurricanes destroyed 115 drilling platforms, damaged 52 others, and
All forms of
energy production come with risks, both to humans and to the environment. Offshore oil drilling is no exception. Spills
from offshore drilling and tankers undoubtedly will continue to occur, but they are rare and are decreasing in frequency;
damaged 535 pipeline segments, yet “there was no loss of life and no major oil spills attributed to either storm.”[110]
and the amount of oil spilled from rigs and tankers is small, compared with the amount of oil extracted and with the amount of oil that enters
ocean waters naturally from ocean floors. As
technology continues to advance, and as companies find themselves
accountable to a public increasingly concerned about environmental stewardship , drilling for oil in our coastal waters will continue
to be conducted in a safe and environmentally conscious manner.
138
Outer Continental Shelf Natural Gas effects on the environment are benign,
natural seepages accounts for the majority of natural gas and oil in marine
environments
IER 2008 (Institute for Energy Research, a Washington, DC-based non-profit advocacy
organization http://instituteforenergyresearch.org/topics/policy/ocs/)
Outer Continental Shelf The Outer Continental Shelf (OCS) is the submerged area between a
continent and the deep ocean. It is a rich natural resource for the United States, containing an
estimated 86 billion barrels of oil and 420 trillion cubic feet of natural gas. What is the Outer
Continental Shelf (OCS)? The Outer Continental Shelf (OCS) is the submerged area between a
continent and the deep ocean. America’s OCS encompasses 1.76 billion acres of submerged,
taxpayer-owned lands. In 1953, Congress designated the Secretary of the Interior to administer
mineral exploration and development of the entire OCS through the Outer Continental Shelf
Lands Act (OCSLA). The OCSLA was amended in 1978 directing the secretary to develop oil
and gas in a timely manner to help meet the energy needs of the nation. How Much Energy Does
the OCS Contain? The Minerals Management Service (MMS) estimates that the outer
continental shelf contains 86 billion barrels of oil and 420 trillion cubic feet of natural gas.
These estimates are likely to be very conservative, as bans on offshore leasing have made it
illegal to explore. Offshore Energy Bans American oil and gas leasing has been prohibited on
most of the OCS since the 1982. Today, 97 percent of America’s offshore OCS lands are not
leased for energy exploration or production. The U.S. is now the only developed nation in the
World that restricts access to its offshore energy resources. There were two federal bans that kept
the U.S. from producing its vast offshore energy resources: an executive ban and a legislative
ban. On July 14, 2008 President George W. Bush lifted the executive ban on offshore drilling,
and the Congressional ban was allowed to expire on September 30, 2008, the end of the federal
FY2008 fiscal year. Prior to this year, the Congressional Moratorium had been renewed every
year since 1981. The Executive Moratorium was instituted by the President in 1990. Ending the
moratorium will allow energy exploration and production to move forward, but there are many
activities that need to occur for actual production to take place. Cleaner, Safer Oil Production
Technology The memory of offshore oil spills, like the 1969 blowout on Union Oil’s Platform
A offshore from Santa Barbara, may deter some individuals from supporting offshore
drilling. Opponents of domestic energy production on the OCS prey on the public’s fears
that such an event will occur again, even though advances in exploration and production
technology have greatly diminished the risks . The pursuit of safety has led to innovative
technologies and modern methods that are more efficient and environmentally sound. For
example: Advanced 3-D seismic and 4-D time imaging technologies enable offshore
operators to locate oil and gas resources far more accurately, resulting in less drilling and
greater resource recovery. [2] All offshore wells have storm chokes that detect damage to
surface valves and shut off the well in emergencies to prevent spills. [2] Blowout preventers
– devices that would have prevented the Santa Barbara accident had they existed in 1969 – are
installed beneath the seafloor. Sensors continuously monitor the subsurface and subsea-bed
conditions to prevent spills in the event of unexpected changes in well pressure. [2] Drill
139
cuttings, a waste product of rock pieces and drilling fluids produced when drilling a well,
are now finding new uses as raw material for bricks, roads, and even rebuilding Louisiana’s
wetlands. [2] The Environmental Benefits of Advanced Technology According to the U.S.
Department of Interior, offshore operators produced 7 billion barrels of oil from 1985 to
2001 with a spill rate of only .001% [4] In 2005, Hurricanes Katrina and Rita destroyed 115
Gulf of Mexico oil and gas platforms and damaged 535 pipeline segments, but there were
no major oil spills attributed to either storm. [4] Today, nearly all Outer Continental Shelf
operators are collaborating with the Minerals Management Service and other federal agencies to
implement Safety and Environmental Management Programs (SEMP); voluntary, nonregulatory
strategies designed to identify and reduce risks and occurrences of offshore accidents, injuries,
and spills [2] Less than 1 percent of all oil found in the marine environment comes from
offshore oil and gas development. According to the National Academy of Sciences, the
majority – 62 percent - is the result of natural seeps through the ocean floor . Natural Oil
Seeps Oil seeps are underwater cracks in the Earth’s crust that release naked crude oil into the
sea. As the graph below illustrates, offshore production accounts for the smallest fraction of
petroleum that is leaked into North American waters. Source: National Academy of Sciences
Natural seepage of crude oil from geologic formations below the seafloor is estimated to
exceed 47,000,000 gallons in North American waters and 180,000,000 gallons globally every
year. [3] Natural oil seeps are responsible for over 60 percentof the petroleum entering North
American waters, and over 45 percent of the petroleum entering the marine environment
worldwide. [3] Petroleum contamination from oil seeps in North American waters is about 60
times greater than the amount released through oil exploration and production. Coal Oil Point
The marine seepfield offshore from Coal Oil Point, Santa Barbara, California is one of the
largest natural oil seeps in the world. In fact, all of the tar found on Santa Barbara’s beaches and
55% of the tar on Los Angeles County’s beaches is derived from the Coal Oil Point seeps. [5]
With roughly 1 billion barrels of oil in place in the Monterey Formation offshore from Coal Oil
Point, it will take an estimated 18,000 years to drain naturally at the current oil seepage rate. [5]
According to former Jet Propulsion Laboratory (JPL) physicist Bruce Allen, the tectonically
active zone is estimated to have leaked some 800 million barrels of oil over the last 10,000 years.
[6] There is potential to drill the equivalent of 1.85 billion barrels of oil from the Santa Barbara
Channel from already discovered, but undeveloped fields. The production of these fields would
bring tax revenues of at least $1.05 billion per year to the State of California and $210 million
per year to Santa Barbara County. [9] The reactive organic gases (ROG) emission rates from the
Coal Oil Point natural seeps was about twice the emission rate for all the on-road vehicle traffic
in the county in 1990. [5] In spite of vigilant regulation of industrial sources of ROGs and large
reductions in automobile emissions over the past decade, Santa Barbara County has had
difficulty reaching Environmental Protection Agency (EPA) air quality standards because of the
gasses emitted through natural seeps. [5]
Natural gas seepage damages the environment, drilling reduces it
Allen, Bruce 11/30/2009 (Bruce Allen is co-founder of SOS California, an environmental and
energy non-profit based in Santa Barbara, California.
140
http://www.heritage.org/research/reports/2009/11/how-offshore-oil-and-gas-production-benefitsthe-economy-and-the-environment)
Abstract: Conventional wisdom holds that offshore oil and gas production harms the
surrounding environment. This blanket "wisdom" ignores the fact that the largest source
of marine hydrocarbon pollution is offshore natural oil seepage. It also ignores the fact that
offshore oil production has lowered the amount of oil released into the ocean by reducing
natural oil seepage, especially in areas with active offshore oil seeps, such as California's
Santa Barbara coast. This Heritage Foundation analysis cites studies, developments, and
biological facts that demonstrate often-overlooked benefits of offshore oil and gas production.
The oceans surrounding the United States hold tremendous oil and natural gas potential,
but much of that potential is not being realized. Nearly 85 percent of these waters -- the
Atlantic, the Pacific, and the eastern Gulf of Mexico -- are off-limits to exploration and
drilling. Government studies estimate that these restricted areas hold at least 19 billion
barrels of oil -- nearly 30 years' worth of current imports from Saudi Arabia -- and oil estimates
are known to increase as exploration occurs. The greatest untapped potential lies in the Pacific.
Producing this oil would increase oil supplies, lower prices, and generate large tax revenues
-- while creating thousands of jobs in the domestic energy industry. Drilling restrictions in
general are imposed due to environmental concerns, despite the fact that offshore
environmental damage has been greatly reduced by technologies that minimize the risk of
oil spills and other hazards to the environment. In fact, offshore oil production has lowered
the amount of oil released into the ocean by reducing natural seepage of oil, especially in areas
with active offshore oil seeps, such as California's Santa Barbara coast. Natural hydrocarbon
seeps have historically been used to locate the world's usable sources of oil and tar. Papers
published by British Petroleum in the early 1990s[1] show that over 75 percent of the world's oil
basins contain surface oil seeps. Most seeps emit small volumes of oil and gas that do not
significantly deplete hydrocarbon reservoirs over the short term, but can add up to significant
depletion of oil and gas over the longer term. The knowledge that surface seepage has a direct
link to subsurface oil and gas accumulations is not new and has been the impetus for many of the
world's early major oil and gas discoveries by pioneers of oil production -- as far back as ancient
China, and more recently the 1860s in Pennsylvania and the 1890s in Azerbaijan. Natural seeps
were the impetus for early exploration of oil in Iran and Iraq in the early 1900s. Natural
hydrocarbon seeps continue to be an important indicator of economic oil and gas resources. The
high cost of deep-water offshore oil and gas exploration has made the identification of
hydrocarbon seeps an important consideration in oil-exploration risk-reduction methods.[2]
Natural Seeps: The Largest Source of U.S. Marine Hydrocarbon Pollution Natural
hydrocarbon seeps generally result from pressurized hydrocarbon reservoirs that force oil
and gas up through fissures to the earth's surface either on land or the seabed floor where
the hydrocarbons escape in the form of oil, tar, and methane-rich gases. It is a widely
overlooked fact that natural hydrocarbon seeps generally have a larger impact on the
marine environment than do oil and gas exploration and production. According to the
National Academy of Sciences, 63 percent of hydrocarbon pollution in U.S. waters stems
from natural seeps, while only 1 percent is due to offshore drilling and extraction.[3]
141
Geologists believe that over the course of millions of years, more oil has seeped naturally into
the earth's environment than currently exists in all conventional oil reservoirs combined. The
Gulf of Mexico, for instance, is a major U.S. offshore oil and gas producing region where the
environmental impact of natural hydrocarbon seepage appears to far exceed the
environmental impact of accidental oil releases due to commercial extraction and
transportation.[4] Onshore hydrocarbon seeps are also pervasive in many areas of the world,
and are a source of contamination for many streambeds and rivers. The Santa Susanna
Mountains in California are estimated to contain 22,000 active oil seeps that are associated with
significant streambed contamination.[5] One of the most studied offshore oil and gas seep
regions over the last 40 years is the Santa Barbara coast of California, which has the world's
second most prolific oil seepage areas, extending for about 80 miles along the coastline.[6] The
offshore Santa Barbara oil seepage zones result in about 70,000 barrels per year of oil and tar
seepage into the Pacific, much of which washes up on California beaches.[7] Every four years,
the amount of offshore Santa Barbara oil seepage exceeds the 240,000 barrels that spilled from
the Exxon Valdez in 1989. By comparison, according to the U.S. Minerals and Management
Service, the total amount of oil spilled in California coastal waters due to offshore oil production
since 1970 has been less than 870 barrels.[8] Far more birds and wildlife have been killed in
the last 40 years by California's offshore oil seepage than by all previous California
offshore oil production spills combined, including the 1969 spill.[9] Seeps are also one of
t he world's largest methane gas emission sources,[ 10] and are a major source of air pollution
in Santa Barbara County.[11] These coastal California seeps release oil and tar that washes
ashore along nearly half the coastline of California, with the highest concentrations in Santa
Barbara County. In the winter, the Davidson current washes seep oil and tar ashore as far north
as the beaches of Santa Cruz and San Francisco.[12] The California Department of Fish Game
often receives public calls reporting a possible oil spill on California central coast beaches,
which is invariably determined to be natural seepage. The California Department of Fish Game
requires that seep oil and tar collected on California beaches be treated as hazardous waste, the
same as for industrial oil spills. Offshore Production: Significant Reductions in Oil Pollution on
California Beaches One of the side affects of offshore oil production has been the reduction
of oil and gas seepage due to decreases in subsea oil-reservoir pressure. Seep oil is
chemically the same as commercially extracted oil, although the seep oil and tar have often
undergone partial oxidation by the time they move into the water or onshore. The seepage
reductions due to offshore oil and gas extraction have, in some cases, resulted in
significant reductions in natural oil and gas seep pollution over the last 40 years.[13] There
are also anecdotal observations and research indicating that oil production around the world is
responsible for ongoing reductions in hydrocarbon seepage pollution.[14] Ironically, the
decreased oil and gas reservoir pressure due to ongoing "legacy" offshore oil and gas
production (which continued even after the state-wide offshore moratorium was imposed) near
the site of the famous 1969 Santa Barbara oil spill is resulting in reductions in California's
coastal seepage pollution. California beaches have become significantly cleaner over the last 50
years due to offshore oil and gas production. Modern slant and horizontal drilling is extending
these benefits into seep zones located further into the ocean than the areas immediately
142
surrounding existing offshore production platforms. Central and southern California beaches
have been polluted by this natural seep oil for well over 100,000 years. A 22-year study of the
offshore oil platform "Holly" off the Californian coast concluded that,"Oil production here has
resulted in an unexpected benefit to the atmosphere and marine environment."[15]According to
peer-reviewed University of California research, if offshore production were expanded in the
seep zone areas studied, there would be further reductions in seepage pollution and the
associated methane gas and ozone-forming reactive organic compounds (ROCs).[16] Longtime Santa Barbara residents have also observed for the last 50 years that their beaches have seen
significant reductions in seepage oil and tar beach pollution. The simple fact is that California
offshore oil and gas production has been the reason why California's prolific natural oil
and gas seepage pollution has been declining for decades. California beaches are becoming
cleaner thanks to existing legacy offshore oil and gas production. Geologists believe these
reductions in seepage pollution will last for thousands of years. Offshore hydrocarbon seeps
are also a naturally dynamic process. In addition to reduced seepage due to reservoir pressure
reductions from commercial extraction, seeps can also become active in new areas due to
earthquakes and other natural events. In 2007, an earthquake in New Zealand resulted in a new
offshore seepage area that led to exploration activity to determine the underlying reservoir's
production potential. This seep zone off the New Zealand coast had previously not been explored
for the presence of economically recoverable hydrocarbons.[17] In Santa Barbara, a 6.8
magnitude earthquake in 1925 resulted in a large spontaneous release of undersea reservoir oil
off the coast that boiled up from the seafloor and inundated the coastline and beaches with
extensive oil slicks.[18] The southern California 1971 Sylmar earthquake also resulted in new
offshore seep areas observed in previously unrecorded areas. In January 2005, an increase in
natural seepage off the California coast resulted in oil slicks that covered more than 20 square
miles. The increased seepage subsided over the following weeks. Since Californian offshore
production began in the late 1950s, far more wildlife has been killed (using bird death estimates
as a surrogate) by California's offshore natural oil seeps than by all of California offshore oil
production spills combined. It is an interesting artifact of the offshore oil debate that large
numbers of bird deaths due to natural oil seepage garners no media attention, whereas small
numbers of bird deaths due to a small oil spill causes extensive national attention and outrage by
opponents of offshore oil production -- even in areas where offshore production has been
consistently reducing pollution caused by natural seepage. A new study estimates that oil
seepage off the Santa Barbara coast from one seep area alone (Coal Oil Point) has resulted
in current oil sediment deposits between 8 and 80 times the amount of oil released from the
Exxon Valdez spill.[19] There are also concerns about air pollution resulting from seepage.
Gas emissions from hydrocarbon seeps are estimated to be one of the largest sources of
methane released annually into the earth's atmosphere, and studies indicate that existing
oil and gas production may be causing ongoing reductions in methane emissions
worldwide.[20] Methane is a potent greenhouse gas. Natural offshore seep emissions are
one of the largest sources of air pollution in Santa Barbara County. Oil Seeps: Indicators of
Oil and Gas Reserves The presence of natural oil seeps has led to the discovery of some of the
world's largest oil fields. The second-largest oil field ever discovered, the Cantarell "supergiant"
field, was discovered after a fisherman, Rudesindo Cantarell, repeatedly complained to the
143
Mexican national oil company PEMEX that his fishing nets were being covered with oil in the
Gulf of Mexico. PEMEX had no oil operations in Mr. Cantarell's fishing area. The company
investigated the source of the offshore oil and subsequently discovered an offshore oil field in
1976 which had produced more than 12 billion barrels of oil by 2007. Although being depleted
rapidly, the Cantarell field is still one of Mexico's largest single sources of oil production.[21] At
current rates of oil seepage off the Santa Barbara coast, about 7 billion barrels of oil may already
have seeped into the California coastal marine environment over the last 100,000 years. The
lifespan of the Santa Barbara offshore oil seeps is estimated to exceed 400,000 years. Seven
billion barrels of oil represents approximately 25 percent of all current U.S. oil reserves. Seven
billion barrels of new Santa Barbara offshore oil production would supply all of California's
current imported oil needs for the next 25 years. National Offshore Energy Policy Should
Consider Natural Oil and Gas Seepage Natural oil and gas seeps are by far the largest
sources of hydrocarbon pollution released into U.S. coastal waters and are a major source
of offshore oil pollution and atmospheric methane emissions worldwide. Oil and gas seeps
are also one of the most important indicators for locating recoverable hydrocarbon resources.
California's central and south coast has seen significant environmental benefits from the
reductions in coastal seepage pollution due to offshore oil and gas production. California's
coastal environment would benefit from offshore oil and gas expansion in active seep areas
that are currently off-limits in California waters, as well as in federal seep zone waters in the
Santa Maria basin in the Outer Continental Shelf. Thus offshore oil and gas production
represents both an effective means of addressing the problems of seepage pollution as well
as an economic opportunity. Continued research may also show that the long-term
environmental benefits that coastal California has experienced due to offshore oil and gas
extraction may be occurring in other regions as well -- albeit probably to a lesser degree. The
economic benefits from increased domestic hydrocarbon production are well known, but
many erroneously assume they come at an environmental cost. In truth, there are
opportunities, off Santa Barbara and elsewhere, to achieve substantial environmental
benefits from drilling as a consequence of reduced seepage of oil and natural gas into the
air and water . Expanded offshore oil and gas production can genuinely be a win-win
proposition.
144
Environment Resilient
Environment is resilient
Easterbrook 95 (Gregg, Distinguished Fellow – Fullbright Foundation, A Moment on Earth, p.
25)
In the aftermath of events such as Love Canal or the Exxon Valdez oil spill, every reference to the environment is prefaced with the adjective
"fragile." "Fragile environment" has become a welded phrase of the modern lexicon, like "aging hippie" or "fugitive financier." But the notion of
a fragile environment is profoundly wrong. Individual animals, plants, and people are distressingly fragile. The
environment that
contains them is close to indestructible . The living environment of Earth has survived ice ages; bombardments of
cosmic radiation more deadly than atomic fallout; solar radiation more powerful than the worst-case projection for ozone
depletion; thousand-year periods of intense volcanism releasing global air pollution far worse than that made by any factory;
reversals of the planet's magnetic poles; the rearrangement of continents; transformation of plains into mountain ranges and of seas into
plains; fluctuations of ocean currents and the jet stream; 300-foot vacillations in sea levels; shortening and lengthening of the seasons caused by
shifts in the planetary axis; collisions
of asteroids and comets bearing far more force than man's nuclear arsenals; and the years
without summer that followed these impacts. Yet hearts beat on, and petals unfold still. Were the
environment fragile it would have expired many eons before the advent of the industrial affronts of the
dreaming ape. Human assaults on the environment, though mischievous, are pinpricks compared to forces of
the magnitude nature is accustomed to resisting.
145
Artificial Reefs Solve Impact
Abandoned platforms are great marine habitats – solves populations
Zaw 10 (Htun, Bachelor of Engineering (Mechanical) Mandalay Technological University,
Master of Engineering (Professional) in Offshore Technology and Management, Asian Institute
of Technology, “Offshore Oil and Gas Field Development Planning,” August 2010,
http://www.set.ait.ac.th/otm/thesis2010/11.pdf)
The reuse for abandoned platforms can be utilized in some purpose. Dokken, 1993; Gardner,
Wiebe, 1993 studied about an analysis of scientific potential of research stations permanently
based on abandoned oil platforms in the Gulf of Mexico. The regulation of the marine
populations and coral reproduction, making underwater observations, monitoring the sea
level, and collecting oceanographic and meteorological information within the framework
of international projects were studied. Rowe (1993) mention that transformation of
abandoned platforms into places for power generation using wind/wave and thermal
energy should be considered. Side (1992) suggested that platforms could be utilized as bases
for search and rescue operations or centers for waste processing and disposal . From the
point of view of fisheries, the project has aim to convert the marine structures into artificial
reefs . Artificial reefs were widely and effectively used on the shelves of many countries to
provide additional habitats for marine life. The offshore structures can attract many
species. In particular, observations in the Gulf of Mexico discovered a strong positive
correlation between the amount of oil platforms and commercial fish catches in the region.
Positive impact of offshore oil and gas developments on the fish populations and stock are
occurred.
146
No Impact - Methane
No Impact – Bacteria will eat methane from leaks
Doyle, Alister 4/28/2014 (Environment Correspondent, climate change and other environmental
themes writer at Reuters. Postings included Paris, Central America, Brussels and London
http://www.reuters.com/article/2014/04/28/environment-bacteria-idUSL6N0NK24N20140428)
(Reuters) - A type of bacteria that eats natural gases may provide a small defence against
leaks such as BP's Gulf of Mexico oil spill in 2010 and curb global warming, a scientific report
said on Monday. The study identified a strain of microbe able to grow on both methane, a
powerful greenhouse gas, and propane. Both are found in unrefined natural gas and scientists had
previously thought that bacteria could only grow on one or the other. In consuming both
methane and propane the bacteria prevent the gases reaching the atmosphere, Britain's
University of East Anglia said of the report written by two of its scientists in the journal Nature.
That means the microbes "could help mitigate the effects of the release of greenhouse gases
to the atmosphere from both natural gas seeps in the environment and those arising from
man-made activity such as fracking and oil spills," it said. The versatile diet of the bacteria,
methylocella silvestris, may mean a microbial ally in absorbing pollution and greenhouse gases
that a U.N. panel of scientists says are extremely likely to be the main cause of global warming
since 1950. First found in northern Europe, the bacteria were also detected after BP's spill in the
Gulf of Mexico in 2010, the worst U.S. offshore disaster, the study said. The explosion of the
Deepwater Horizon rig killed 11 workers and spewed oil and gases into the Gulf of Mexico.
GROW Colin Murrell, a co-author, told Reuters that scientists did not know how far bacteria
limited leaks. The study said natural seepage of gases from underground deposits was
widespread but "largely undocumented." Still, he said it might be possible sometime to grow
the microbes and seed them in areas where gas is leaking. "There is potential ... it may be
seeding, leaving it and helping nature a bit along its way," he said. But another expert who was
not involved in the study said the bacteria seemed able to adapt on their own. "The good
thing about such bacteria is that they can grow fast: the one found here can double every 10
hours," Antje Boetius, a professor at the Max Planck Institute for Marine Microbiology in
Germany, told Reuters. "After an oil spill, it can theoretically make up most of the
bacterial community in the environment after a week and consume a lot of the methane or
propane leaking," she said. That explosive growth meant it would not be necessary for
companies to try to grow bacteria, for instance, in case of oil spills. "Nature grows them for
us," she said. Methane comes from human sources such as livestock - the digestive tracts of
cows, for instance, produce large amounts - rice paddies and fossil fuel extraction. Such sources
account for about 50 to 65 percent of methane with the rest coming from natural wetlands, lakes,
wildfires or permafrost, according to a U.N. report last year.
147
LNG Turns Environment
LNG is good for the environment
Odano 10 (Dr. Sumimaru Odano is Professor and Director, Center for Risk Research, Shiga University, Japan.
The authors gratefully acknowledge the data and information that were provided by Alidi Mahmud (Head of Energy
Division at the Prime Minister’s Office), Sofian Kipli (External Affairs Adviser, Brunei LNG Company), and Jill
Heys (BP Distribution Services, United Kingdom "LNG EXPORTS FROM BRUNEI TO JAPAN"
http://www.econ.shiga-u.ac.jp/10/2/3/res.3/A20SaifulOdano201003.pdf) SM
LNG has also environmental advantages compared with oil or coal. LNG is typically made up mostly of
methane (over 90 percent). Methane is composed of one carbon and four hydrogen atoms, CH4 [Foss 2007, p. 7]. Because LNG
contains the least amount of carbon, when burned it produces less carbon dioxide
(CO2) than
oil or coal, which are considered the main contributors to the greenhouse effect. LNG also produces fewer nitrogen oxides (NOx) and sulfur
oxides (SOx), both of which cause air pollution.
Because of its
relatively
lower impact on the environment,
there is growing worldwide demand for LNG as an environmentally friendly source of
energy.
LNG is good for the environment
Levi 12 (Michael A. Levi is the David M. Rubenstein senior fellow for energy and environment
at the Council on Foreign Relations, a nonpartisan foreign-policy think tank and membership
organization."A Strategy for U.S. Natural Gas
Exports"http://www.brookings.edu/~/media/research/files/papers/
2012/6/13%20exports%20levi/06_exports_levi.pdf) SM
Exported natural gas is also likely to displace coal. Indeed, since allowing natural gas
exports appears to primarily increase the volume of gas produced, rather than displace gas
previously destined for domestic consumption , allowing natural gas exports could
ultimately reduce global emissions.
The prospect of exports thus strongly reinforces the importance of ensuring that shale gas
development proceeds in ways that gain the support of local communities and
environmental skeptics. Specific measures for doing that are beyond the scope of this paper, but a long list of wise steps that should
be taken can be found in a recent report of the Secretary of Energy Advisory Board Natural Gas Subcommittee, “Improving the Safety and
Environmental Performance of Hydraulic Fracturing” (DOE 2011). It will be several years at the earliest until natural gas exports might
commence; authorities should
use the intervening time to ensure that gas development is done to
the highest standard.
148
149
A2 Russia Gas DA
150
No Tradeoff
U.S. natural gas will not affect Russia
Silverstein, Ken 3/27/2014 (American business journalist specializing in writing about energy.
He is the editor-in-chief of the online publication EnergyBiz Insider and a Forbes contributor.
“U.S. Natural Gas Is Not A Weapon To Be Wielded Against Russia”
http://www.forbes.com/sites/kensilverstein/2014/03/27/u-s-natural-gas-is-not-a-weapon-to-bewielded-against-russia/)
All things considered, natural gas exports may not be a useful weapon in the United States’
quest to punish Russia after its annexation of Crimea. In fact, it may not even amount to a slap
on the wrist. With the approval this week of the export facility, Jordan Cove in Coos Bay, Ore.,
the thinking is that liquefied natural gas, or LNG, can be shipped around the world and compete
head on with Russian natural gas that travels through international pipelines and into Europe. But
that’s not likely to be the case: It will take billions of dollars to retrofit the U.S.
infrastructure and to transport the resulting fuel , meaning the Europeans won’t get much of
a deal. In due time, a global natural gas foundation may be laid here — but the whole geopolitical chessboard will have been reshuffled. The argument that the United States must show
its strength and move forward is therefore a bit spurious, although the points about opening
borders and allowing free trade remain formidable. “U.S. Exports are unlikely to make much
of a dent into European and Asian markets currently serviced by Russia within the next
next decade,” says Hill Huntington, executive director, Energy Modeling Forum, at
Stanford University, in an interview. “There are other sources in the Middle East and
elsewhere that may be a lot more competitive with Russian supplies than U.S. exports.”
Conversion of an LNG import facility to one that can export the fuel is a multi-billion enterprise.
The natural gas must first be processed and super-cooled before it would be sent on tankers to its
ultimate destination, where a receiving facility on the opposite end re-gasifies the shipment. As
for Europe, it now gets about a quarter of its natural gas from Russia and it pays about $11 per
million Btus. In this country, we’ve been paying $4 for the same unit, although this winter the
price did spike in certain areas of the country. Asia pays about $18 per million Btus. Cheap U.S.
gas seems like a solution — but not much of one after after all the costs are tacked on to its
product. Interestingly, 10 years ago no one thought this country would be an exporter of natural
gas. But the newfound discoveries of shale gas through fracking technologies have changed all
that. Now, the U.S.Energy Information Administration is projecting that the unconventional fuel
will make up about 50 percent of all natural gas discoveries here by 2040. Even before the whole
Russia-Ukraine flare up, producers such as ExxonMobil have said that they should be able to
ship their product to where they get the best prices. And they have friends in high places — the
ones who control the committee process in the U.S. Congress and who want a faster permitting
process. But U.S. Energy Secretary Ernest Moniz says that the approach will continue to be
methodical and that regulators will not cut any corners, although he has said that the Obama
administration will consider the global political and economic context. In 2012, Cheniere Energy
, which owns the Sabine Pass that sits on the Texas and Louisiana border, became the first
151
operator to get government permission to export LNG. Its unit is now under construction and it is
expected to start shipping LNG by 2016. Among the others to have to also gotten approval:
Freeport McMoRan Energy, Sempra U.S. Gas and Power and Dominion Resources . Altogether,
about 93 billion cubic feet of this country’s natural gas wealth could be shipped overseas. In a
national economy that values the free flow of goods and services, should this not be acceptable?
The arguments against doing so are coming from environmentalists who are concerned about the
added development and the increased air emissions as well as from heavy industry. Those
companies have relied on cheap energy to fuel their expansions. Chemical makers, led by Dow
Chemical, are arguing that if they are less competitive in today’s brutal international market, then
jobs will be lost. Projecting future exports and fuel prices is not a science but it stands to reason
that if those sales are modest, price pressures would be minimal. Similarly, if that demand is
great, then producers would work harder to keep up, thus curbing fuel costs. Research done by
Stanford University says that the price increases as a result of U.S. exports could be as much as
$1 per million Btus, although it would likely be in the area of 40 cents per million Btus. “If the
size of that additional export demand is modest relative to the scale of domestic supply—as most
experts believe—then the impact on domestic energy prices will also be modest,” adds Richard
Newell, who is the director of Duke University’s Energy Initiative and the former administrator
of the Energy Information Administration, in an interview. “If U.S. gas prices were to increase
substantially, U.S. LNG would become less competitive, decreasing its demand, and bringing
prices back down.” Fearing free trade is not the answer, insists Newell. The United States cannot
chastise China for limiting exports for rare earth minerals, for example, while taking a similar
approach with regard to natural gas exports. In a global marketplace that is committed to open
borders, some players are bound to get hurt but the broader society should benefit. Indeed, the
United States is not the only country in the business of developing natural gas and
potentially marketing it to other countries. Around the world, there are reported to be at least
a dozen liquefaction plants under construction that would serve to increase supplies and to
moderate prices. In all cases, regulatory approvals are required along with sizable investments
and firm contracts that bind customers. By the time the U.S. primes its LNG export business,
the international picture will likely have changed. In the interim, other countries may tap
their own shale gas resources while Russia will probably have re-ingratiated itself with the
world community. American natural gas may be a prized domestic asset — but it’s not a
silver bullet in the global effort to neuter Russia.
U.S. natural gas exports will not affect Russia
Kroh, Kiley 3/28/2014 (Co-Editor of Climate Progress. Prior to joining Think Progress, she
worked on the Energy policy team at the Center for American Progress as the Associate Director
for Ocean Communications and served as a media consultant and strategic adviser to Democratic
candidates and committees at the federal, state, and municipal levels, working as a member of
the executive production team for the 2008 Democratic National Convention and serving as a
U.S. Peace Corps volunteer in Ukraine from 2005 to 2007. “Why Exporting Natural Gas Isn’t A
Simple Solution To The Russia Problem”
http://thinkprogress.org/climate/2014/03/28/3419785/natural-gas-exports-russia/)
152
As the conflict between Russia and Ukraine continues with no end in sight, the search for actions
that could weaken Russian President Vladimir Putin’s influence in the region has international
leaders, members of Congress and numerous editorials calling for the U.S. to export liquefied
natural gas (LNG) to Europe. The natural gas industry is predictably pleased. Experts, however,
counter that exporting natural gas to Europe would be costly, time-consuming, environmentally
risky and, in the end, unlikely to have a significant impact on Russia. On Wednesday, the U.S.
and EU issued a joint statement affirming their partnership and common interest in wielding
energy resources as a diplomatic tool. “The situation in Ukraine proves the need to reinforce
energy security in Europe, and we are considering new collaborative efforts to achieve this goal,”
the statement reads. “We welcome the prospect of U.S. LNG exports in the future since
additional global supplies will benefit Europe and other strategic partners.” “Expediting the
approval of U.S. natural gas exports would send a clear signal that Russia’s energy stranglehold
on Europe will not continue, and just as important, it would create more American jobs and help
more Americans as they face the squeeze of not enough jobs and not enough increase in wages,”
Speaker of the House John Boehner (R-OH) said at a Tuesday press conference. Several bills
have been introduced in both the House and Senate to speed LNG exports, notably by rivals in
the hotly contested Colorado Senate race, Sen. Mark Udall (D-CO) and Rep. Cory Gardner (RCO). Using natural gas as a tool to undercut Russia’s influence in the region seems promising at
the outset — Ukraine relies heavily on Russia for its natural gas supplies and because a
significant portion of the pipelines run from Russia through Ukraine, so does the rest of Europe.
The U.S. is in the midst of a domestic fossil fuel boom, so why not just send a bunch of natural
gas over there? The reality is a lot more complex. “While the prospect of U.S. energy exports
could usefully reduce Russian energy export revenues, U.S. exports will not displace Russia
from its dominant position in the European market; claiming otherwise reduces U.S.
credibility,” Michael Levi, Senior Fellow at the Council on Foreign Relations, explained in
testimony before the House Committee on Foreign Relations Wednesday. The first issue, Levi
explains, is infrastructure. Significant construction would need to occur on both ends and
“unless European companies build a large number of LNG terminals and pipelines and
then idle them — something that profit-seeking companies rarely do on purpose — there
will be limited capacity to absorb a sudden influx of U.S. LNG in a crisis.” Furthermore,
because Russian gas is significantly cheaper than delivered U.S. LNG and American
producers wouldn’t be willing to sell their product at a loss just to hurt Russia, it’s unlikely
the U.S. could diminish Russia’s share of the European market in any meaningful way. And
because exporting natural gas would increase demand, gas prices in the U.S. would go up —
something Levi points out would hit lower-income Americans the hardest. Increased demand
also means more drilling and with that, more of the environmental concerns that have already
driven opposition to natural gas production both in the U.S. and Europe. Hydraulic fracturing, or
fracking, a process that involves injecting a high-pressure stream of chemicals and water into
rock formations to release the oil and gas deposits trapped within, has drawn the ire of
communities around the U.S. for the threat it poses to air and water quality and public health.
And what of the climate impact? Natural gas is often touted for being less damaging to the
climate than burning coal, for example. However, natural gas is mostly methane — an extremely
potent greenhouse gas that traps 86 times as much heat as carbon dioxide over a 20-year period.
153
And as Joe Romm points out, methane leakage from natural gas production is nothing to ignore.
According to a recent Stanford study, “a review of more than 200 earlier studies confirms that
U.S. emissions of methane are considerably higher than official estimates. Leaks from the
nation’s natural gas system are an important part of the problem.” And Romm explains that “the
situation is even worse with liquefied natural gas (LNG) because the LNG life-cycle shown
above is itself so energy intensive, consuming a considerable amount of natural gas and
transportation fuel.” A 2009 report by the Joint Research Centre of the European Commission
found that the extra greenhouse gas emissions from the entire cycle, including shipping, “can
equal 30 percent or more of combustion emissions.” With the approval of the Jordan Cove export
facility in Oregon this week, seven permits have now been approved by the Department of
Energy for export facilities in the U.S. — a rate Boehner described as “excruciatingly slow” and
“amount[ing] to a de facto ban on American natural gas exports.” Levi argues that there are
benefits to exporting natural gas — increased energy security, an open global trading system —
but claims that exports could be a serious weapon against Russia “have consistently been
overstated.” “The Russians understand this empty threat. We have no LNG [Liquefied
Natural Gas] export facilities, Ukraine has no LNG import facilities, other than that — it’s a
great idea,” Edward Chow, a Senior Fellow at the Center for Strategic International Studies, told
TIME.
U.S. LNG won’t replace Russian natural gas in Europe
Almeida, Isis and Shiryaevskaya, Anna 5/20/2014 (Shiryaevskaya is a reporter for Bloomberg
News in Moscow and Isis Almeida is a reporter for Bloomberg News in London. “U.S. LNG
Won’t Replace Russian Gas as Europe Seeks Supply” http://www.bloomberg.com/news/201405-19/u-s-lng-won-t-replace-russian-gas-as-europe-seeks-supply.html)
U.S. exports of liquefied natural gas won’t be able to replace Russian exports to Europe as
the Ukrainian crisis threatens to disrupt flows to the region. U.S. LNG supplies expected to start
in the first quarter of 2016 won’t be enough to compensate for Russia supplies that meet
about 30 percent of Europe’s gas needs, said Jean Abiteboul, president of Cheniere Supply
& Marketing Inc. U.S. LNG exports won’t have any bearing in the current conflict and
deliveries will likely target higher-price markets in Asia, said Will Pearson, director for
global energy and natural resources at consultant Eurasia Group. “You cannot replace
Russian gas with any kind of LNG, especially by U.S. LNG only,” Abiteboul said yesterday
in an interview at the Flame conference in Amsterdam. “It will probably force people to think
more accurately on the diversification of supply, security of supply and not only price and could
give an additional chance for LNG imports into Europe, including U.S.” The European
Commission, the 28-nation bloc’s executive, will by June prepare a road map on how to cut
reliance on Russian imports and increase security of supply as tensions between Russia and
Ukraine escalate. About half of Russia’s gas exports to Europe are carried through pipelines
crossing Ukraine. Disputes between the two nations disrupted supplies of the fuel to Europe in
2006 and 2009. Sabine Pass Houston-based Cheniere Energy Inc.’s Sabine Pass terminal is the
only facility in the lower 48 states to obtain a full U.S. export permit. U.S. LNG and alternative
supplies such as the Shah Deniz project in Azerbaijan are unlikely to come to Europe after U.K.
gas prices on the National Balancing Point fell 36 percent this year and freezing weather boosted
154
U.S. futures on the Henry Hub by 6.8 percent, said Thierry Bros, an analyst at Societe Generale
SA. U.K. prices need to be at Henry Hub plus $6 per million British thermal units for the
arbitrage to work, he said in Amsterdam. U.K. next-month gas rose fell 0.9 percent to 43.99
pence a therm ($7.39 per million Btu) on London’s ICE Futures Europe exchange, the lowest
level since September 2010. The comparable U.S. contract was little changed at $4.47 per
million Btu. No Panacea “Europe can do things, but I don’t think U.S. exports or global
LNG is a panacea for Europe,” Andrew Walker, head of LNG strategy at BG Group Plc,
said in Amsterdam yesterday. “If Europe needs LNG, it has the infrastructure, it has an
option to pull global gas. The trouble is that global gas is more expensive than Russian
gas.” The global impact of future LNG exports has already started, Abiteboul said at the
conference, citing U.S. coal exports to Germany, price reviews in Europe and pressure on prices
in Asia linked to the Japan Crude Cocktail marker. U.S. LNG exports to Europe are profitable
versus current oil-linked gas prices, he said. Gazprom sells most of its gas to the region under
long-term contracts at prices linked to oil, in a system that has been challenged by buyers
including RWE AG, Germany’s second-largest utility. Gazprom billed Ukraine for 114 million
cubic meters of gas a day in June, or about $1.66 billion, assuming a price of $485 a thousand
cubic meters charged since April. Supplies will stop on June 3 unless Gazprom receives some
payment by June 2, according to Sergei Kupriyanov, a spokesman for Gazprom. Killing
Competition Russia is boosting gas supplies to Europe to “kill competition” from potential
new projects before they even start, Bros said. They also want to have European storages filled
in case of a supply disruption to Ukraine, he added. OAO Gazprom’s gas exports to western
Europe were at 448 million cubic meters on May 15, up from 425 million at the beginning of the
month, according to data from the Russian Energy Ministry’s CDU-TEK unit. “It’s a matter of
political willingness, it’s also a matter of costs and my guess is that in the end is that Russia will
continue to play a very important role in Europe especially if the crisis in Ukraine finds a
peaceful solution,” Abiteboul said.
US won’t sell enough LNG to affect Russia, because of economic incentives
David, Javier E. 3/16/2014 (Journalist in the realms of finance, public policy, media and
strategic communication with bachelors degree in Economics and Political Science “Think US
natgas can threaten Russia? Think again” http://www.cnbc.com/id/101481288)
The prospect of the U.S. harnessing its soaring natural gas reserves to stay Russia's heavy hand
in Ukraine may be far easier said than done. In the days after Ukraine's political turmoil and
Russia's subsequent incursion into Crimea, a groundswell of support has emerged for the U.S.—
which is expected to churn out 2 trillion cubic feet of natural gas this year—to use its fuel bounty
to counter Moscow's global influence. The thinking is that America's cheap natural gas could
undercut Russia's exports of the liquid fuel to Ukraine and Western Europe. However, some
observers are deeply skeptical that American fuel supplies can have an immediate impact, if any
at all, on events unfolding abroad. Unlike in Russia or the petrostates of the Middle East, private
companies own and supply U.S. natural gas. Accordingly, producers make decisions on
where to ship fuel based on commercial needs such as supply, demand and price, rather
than geopolitics. "Essentially the U.S. government cannot force that upon private-sector
companies," said Tim Boersma, a fellow at the Energy Security Initiative at the Brookings
155
Institution. "There are rare examples of the government forbidding companies to sell a product
somewhere, e.g., Iran, but to sell somewhere for arguably a lower price than the company
could get elsewhere" is unrealistic, he added. Meanwhile, five years into the U.S. energy
revolution, the country's nat gas infrastructure remains underdeveloped, with barely 200
pipelines in operation. That pales in comparison with Russia's sprawling network—many of
which run through Ukraine, and which supply a third of Continental Europe's natural gas. There's
an additional problem of scale. In 2012, Russia shipped nearly 200 billion cubic meters of
natural gas abroad, according to the CIA's World Factbook, with Qatar coming in a distant
second with 114 billion cubic meters. Those amounts eclipse the 46 billion cubic meters
exported by the U.S. during the comparable time frame. William Frohnhoefer, managing director
of research firm BTIG, said in an interview that the U.S. doesn't need to supplant all of Russia's
supply to European countries—but just enough to send Moscow a strong message. "You don't
need to replace it all, you need to show Russia [Ukraine] has alternatives," Frohnhoefer said. The
Russian economy is heavily reliant on gas revenue, which could help Europe reverse the power
dynamic. "If Ukraine and other countries dependent on Russia can wean themselves away, they
will be emboldened to seek other [nat gas] sources, and that would be the U.S.," he added. Still,
the U.S. has a queue of 20 companies waiting for the federal government to approve LNG export
facilities. The Department of Energy has approved four new terminals in the past year, a pace
some industry participants consider too slow. The primary market for U.S. nat gas is made up
of countries that have free trade agreements with the U.S.—something Ukraine and other
European countries currently lack, although consulting firm Ernst & Young points out that the
DOE has "greater latitude" in deciding whether to approve exports to non-free-trade countries.
As it stands, approximately 80 percent of the LNG exports coming online in the next few
years are committed to Asia, currently the largest market for U.S. nat gas producers. The
stagnant Ukraine economy has made it hard pressed to pay back the whopping $2 billion it owes
Gazprom, the natural gas giant that's controlled by Russia's government. It also makes it hard for
U.S. companies to see the country as a worthwhile investment, noted Kartik Misra, senior analyst
at Energy Intelligence. "The problem is Ukraine doesn't have the ability to pay for this gas,"
Misra said, adding that Kiev "has been historically bad about paying gas debts. Even if we could
ship this gas to Ukraine, they don't have the ability to pay for it." Most U.S. LNG exports won't
come online until 2016 at the earliest, Misra said, which is likely to be too late to resolve the
Ukrainian crisis. "The timing is instrumental in this argument," he said. "U.S. exports are not
necessarily going to be helpful to Ukraine."
156
Politics
157
2AC No Link
No link – doesn’t require congressional approval
Janofsky 6 (Michael, Veteran Journalist, “Offshore Drilling Plan Widens Rifts Over Energy
Policy,” New York Times, 4-9, http://www.nytimes.com/2006/04/09/washington/09drill.html)
A Bush administration proposal to open an energy-rich tract of the Gulf of Mexico to oil and gas drilling has touched off a tough
fight in Congress, the latest demonstration of the political barriers to providing new energy supplies even at a time of high demand and record prices. The two-million-acre area, in deep waters
100 miles south of Pensacola, Fla., is estimated to contain nearly half a billion barrels of oil and three trillion cubic feet of natural gas, enough to run roughly a million vehicles and heat more
than half a million homes for about 15 years. The site, Area 181, is the only major offshore leasing zone that the administration is offering for development. But lawmakers are divided over
competing proposals to expand or to limit the drilling. The Senate Energy Committee and its chairman, Pete V. Domenici, Republican of New Mexico, are pushing for a wider drilling zone,
while the two Florida senators and many from the state's delegation in the House are arguing for a smaller tract. Other lawmakers oppose any new drilling at all. The debate could go a long way
toward defining how the nation satisfies its need for new energy and whether longstanding prohibitions against drilling in the Outer Continental Shelf, the deep waters well beyond state
coastlines, will end. The fight, meanwhile, threatens to hold up the confirmation of President Bush's choice to lead the Interior Department, Gov. Dirk Kempthorne of Idaho. Mr. Kempthorne was
nominated last month to replace Gale A. Norton, a proponent of the plan, who stepped down March 31. Like Ms. Norton, Mr. Kempthorne, a former senator, is a determined advocate of
developing new supplies of energy through drilling. While environmental groups say that discouraging new drilling would spur development of alternative fuels, administration officials say that
timely action in Area 181 and beyond could bring short-term relief to the nation's energy needs and, perhaps, lower fuel costs for consumers. "It's important to have expansions of available acres
in the Gulf of Mexico as other areas are being tapped out," Ms. Norton said recently. She predicted that drilling in the offshore zone would lead to further development in parts of the Outer
Continental Shelf that have been off-limits since the 1980's under a federal moratorium that Congress has renewed each year and that every president since then has supported. States are
beginning to challenge the prohibitions. Legislatures in Georgia and Kansas recently passed resolutions urging the government to lift the bans. On Friday, Gov. Tim Kaine of Virginia, a
Democrat, rejected language in a state energy bill that asked Congress to lift the drilling ban off Virginia's coast. But he did not close the door to a federal survey of natural gas deposits.
Meanwhile, Representative Richard W. Pombo, Republican of California, the pro-development chairman of the House Resources Committee, plans to introduce a bill in June that would allow
states to seek control of any energy exploration within 125 miles of their shorelines. Senators John W. Warner of Virginia, a Republican, and Mark Pryor of Arkansas, a Democrat, introduced a
similar bill in the Senate last month. Currently, coastal states can offer drilling rights only in waters within a few miles of their own shores. Mr. Pombo and other lawmakers would also change
the royalty distribution formula for drilling in Outer Continental Shelf waters so states would get a share of the royalties that now go entirely to the federal government. Senators from Alabama,
Louisiana and Mississippi are co-sponsoring a bill that would create a 50-50 split. As exceptions to the federal ban, the western and central waters of the Gulf of Mexico produce nearly a third of
By its
current boundaries, the pending lease area is a much smaller tract than the 5.9 million acres the Interior Department
first considered leasing more than 20 years ago and the 3.6 million acres that the department proposed to lease in
2001. This year, two million acres of the original tract are proposed for lease as the only waters of the Outer
Continental Shelf that the administration is making available for 2007-12. The proposal is an administrative action
the nation's oil and more than a fifth of its natural gas. But Area 181 has been protected because of its proximity to Florida and the opposition of Mr. Bush's brother, Gov. Jeb Bush.
that does not require Congressional approval , but it is still subject to public comment before being made final.
Unless Congress directs the administration to change course, the administration's final plan would lead to bidding on new leases in 2007.
158
2AC No Link - Jobs
Plan gets spun as jobs- shields blame
Izadi 12
[Elahe is a writer for the National Journal. “Former Sen. Trent Lott, Ex-Rep. Jim Davis Bemoan Partisanship on Energy Issues,” 8/29/12,
http://www.nationaljournal.com/2012-election/former-members-bemoan-partisanship-on-energy-issues-20120829]
in political gridlock, it will take serious willingness to
compromise to get formerly bipartisan energy issues moving from the current partisan standstill. “If we get the right political leadership and the
willingness to put everything on the table, I don’t think this has to be a partisan issue,” former Rep. Jim Davis, D-Fla., said during a Republican
In a climate where everything from transportation issues to the farm bill have gotten caught
National Convention event on Wednesday in Tampa hosted by National Journal and the American Petroleum Institute. Former Senate Republican Leader Trent Lott of Mississippi said that
Republicans who want to produce more of everything have to also be willing to give a little on the conservation side.” The event focused on the
“
future of energy issues and how they are playing out in the presidential and congressional races. Four years ago, the major presidential candidates both agreed that climate change needed to be
casting energy as a defense or
jobs issue , in the current political climate, will allow debates between lawmakers to gain some steam ,
Lott and Davis agreed. The export of coal and natural gas, hydraulic fracturing, and how tax reform will affect the energy industries are all issues that will
have to be dealt with by the next president and Congress. “The job of the next president is critical on energy and many of these issues, and the job is very
addressed. However, since then, the science behind global warming has come into question by more and more Republicans. But
simple: adult supervision of the Congress,” Davis said.
159
Plan Popular
Ending the moratorium popular
Russell 12
[Barry Russell is President of the Independent Petroleum Association of America, August 15, 2012, “Energy Must Transcend Politics”,
http://energy.nationaljournal.com/2012/08/finding-the-sweet-spot-biparti.php#2238176]
legislators have reached across the aisle to construct and support common-sense legislation that
energy production. Recent legislation from Congress which would replace the Obama administration’s five-year offshore
leasing plan and instead increase access America’s abundant offshore oil and natural gas is one example of such
bipartisan ship. The House passed legislation with support from 25 key Democrats. The support from Republicans and Democrats is obviously not equal, but this bipartisan legislative
victory demonstrates a commitment by the House of Representatives to support the jobs, economic growth
and national security over stubborn allegiance to political party . The same is happening on the
Senate side. Democratic Senators Jim Webb (VA), Mark Warner (VA), and Mary Landrieu (LA) cosponsored the Senate’s legislation to
expand offshore oil and natural gas production with Republican Senators Lisa Murkowski (AK), John Hoeven (ND), and Jim Inhofe (OK). Senator
There have been glimpses of great leadership, examples when
encourages American
Manchin (WV) is another Democratic leader who consistently votes to promote responsible energy development.
Natural gas production is popular
Strahan 12 (David, Energy Reporter – New Scientist, “The Great Gas Showdown,” New
Scientist, 2-25, 213(2835), Academic Search Complete)
I FIRST heard the idea on a private jet flying from New York to London. The US oil billionaire Robert Hefner III, known as the "father of deep natural gas", had
offered me a lift to discuss a book he was planning. The
idea was, perhaps unsurprisingly, that natural gas will solve the supply problem of
"peak oil" -- when global oil production starts to decline -- and dramatically cut US emissions of greenhouse gases,
making it a perfect bridging fuel to a low-carbon future. With gas prices approaching record highs at the time, I was sceptical to say the least.
But things have changed. Today the US is awash with cheap gas, thanks in part to the newfound ability to extract large amounts of shale gas. So could it be that
Hefner, despite his obvious commercial interest, was right all along? Fellow tycoon T. Boone
their ideas have found
Pickens has also been pushing the gas agenda and
enthusiastic support among the US public and in Congress. Replacing oil imports with
domestically produced gas may promise better energy security and economic benefits. Is it the best route for cutting carbon
emissions, though? Natural gas, which is mainly methane, may generate less carbon dioxide than oil and coal when burned, but as recent research has found, there's
more to greenhouse gas emissions than just combustion.
Turn – Republicans and natural gas industry loves the plan
Clark 12 (Aaron, “Obama Stance on Fossil Fuel Angers Industry,” Bloomberg, 1-24,
http://www.bloomberg.com/news/2012-01-24/obama-claiming-credit-for-fossil-fuel-gainsangers-industry.html)
President Barack Obama
is taking credit for higher U.S. oil and gas production and lower imports,
angering industry
groups and Republicans who say he is working against domestic energy production. American energy will be a
major theme of Obama’s State of the Union address to Congress tonight, Jay Carney, the White House spokesman, said in a briefing yesterday. In
his first campaign ad this year, Obama boasts that U.S. dependence on foreign oil is below 50 percent for the first time in 13 years. Since
Obama took office, U.S. natural gas production averaged 1.89 trillion cubic feet a month through October, 13 percent higher
than the average during President George W. Bush’s two terms, according to Energy Department data. Crude oil production is 2 percent
higher, the department said. “To be sure that is not because the White House meant for that to happen,” said Pavel Molchanov,
an analyst at Raymond James & Associates Inc. Republicans say the numbers are misleading. Onshore oil and gas production on
federal lands directly under Obama’s control is down 40 percent compared to 10 years ago, according to Spencer Pederson,
a spokesman for Representative Doc Hastings, a Washington Republican and chairman of the House Natural Resources Committee. In 2010, the
160
U.S. signed the fewest number of offshore drilling leases since 1984. ‘Drill Baby Drill’ “The
president is responding to what
America’s gut feeling is, that we should be less dependent on foreign oil, and he’s trying to take credit for it ,” Hastings
said in an interview. “ His
policies are exactly the opposite .” Four years ago, Obama campaigned against Republican vice
presidential nominee Sarah Palin’s rally to “Drill Baby Drill.” Today he is highlighting fossil fuel gains to blunt charges that his policies are
contributing to higher energy costs, according to Tyson Slocum, energy program director for Public Citizen, a Washington-based consumer
advocacy group, said in an interview. “The Republican narrative is that Obama is shoveling huge amounts of money to his cronies in the
renewable industry, and blocking the real energy that American needs,” Slocum said in an interview. “It’s a false narrative. The administration
has been focused on green energy, but they haven’t been against fossil fuels.” Federal Leases In a January report, the American Petroleum
Institute in Washington said that in two years the number of new leases to drill on federal lands declined 44 percent
to 1,053 in 2010. The report blamed “new rules, policies and administrative actions that are not conducive to oil and natural gas production.”
Lower imports are the result of lower demand, and increasing production has come despite Obama’s policies , according to
Jack Gerard, American Petroleum Institute President. The U.S. needs a “ course correction ” on energy policy
that includes faster permitting on federal lands in the West and in the Gulf of Mexico, he said. The group, whose members
include Exxon Mobil Corp., the largest U.S. oil company, convened a conference call with reporters today to comment on what Obama is
expected to say on domestic energy in tonight’s address. “We hope that the actions match the words,” Gerard said on the call. “The truth
is
that the administration has sometimes paid lip service to more domestic energy development , including more oil and
natural gas development.” Offshore Drilling The American Enterprise Institute, a Washington group that supports free markets, called Obama’s
Jan. 18 decision to deny a permit for TransCanada Corp. (TRP)’s $7 billion Keystone XL oil pipeline, part of his “crusade against fossil fuels.”
“The losses due to the Obama administration’s death-grip on offshore drilling and its unwillingness to open federal
lands or issue timely permits for exploration
far outweigh any energy gains that the White House may tout this
week,” Thomas Pyle, president of the Washington-based Institute for Energy Research, said in a statement. Obama last year called on Congress
to eliminate “billions in taxpayer” subsidies for oil companies and to invest instead in renewable sources of power. In 2010, he proposed drilling
for oil and natural gas off the U.S. East Coast, weeks before BP Plc (BP/)’s Macondo well in the Gulf of Mexico failed, spewing 4.9 million
barrels of oil and triggering a temporary administration ban on offshore exploration.
Nat gas lobbyists have tremendous influence in congress
Browning and Clifford 11 (James, Regional State Director – Common Cause, and Pat, Stone
Senior Fellow – HUC-UC Ethics Center, “Fracking for Support: Natural Gas Industry Pumps
Cash Into Congress,” Common Cause, 11-10,
http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=7831813)
Natural gas interests have spent more than $747 million during a 10-year campaign – stunningly successful so far – to
avoid government regulation of hydraulic “fracking,” a fast-growing and environmentally risky process used in Ohio and at least a
dozen other states to tap underground gas reserves, according to a new study by Common Cause. A faction of the natural gas industry
has directed more than $20 million to the campaigns of current members of Congress – including $600,000 to Ohioans -and put $726 million into
lobbying aimed at shielding itself
from oversight, according to the report, the third in a
series of “Deep Drilling, Deep Pockets” reports produced by the non-profit government watchdog group. Rep. John Boehner led Ohio’s
Congressional delegation with $186,900 raised from fracking interests, followed Sen. Rob Portman with $91,000, Rep. Steve Chabot with
$59,050, and Rep. Steve Stivers with $51,250. “Players in this industry have pumped cash into Congress in the same way they
pump toxic chemicals into underground rock formations to free trapped gas,” said Common Cause President Bob Edgar. “And as fracking for gas
releases toxic chemicals into groundwater and streams, the industry’s political fracking for support is toxic to efforts for a cleaner environment
and relief from our dependence on fossil fuels.” The report also tracks $2.8 million in campaign contributions to Ohio’s state elected officials and
notes that Ohio’s fracking regulations are among the weakest of any state. Gov. John Kasich was the leading individual recipient with $213,519,
followed by former Gov. Ted Strickland with $87,450 and Secretary of State John Husted with $84,750. In Congress, the industry’s
political giving heavily favors lawmakers who supported the 2005 Energy Policy Act, which exempted fracking from
regulation under the Safe Drinking Water Act. Current members who voted for the bill received an average of $73,433, while those who voted
against the bill received an average of $10,894. The report comes as the Environmental Protection Agency is scheduled to publish new,
preliminary findings in 2012 about the potential dangers of fracking. That gives the industry a powerful incentive to increase
political spending now in an attempt to
shape public opinion and the debate over fracking in
Congress , as well as affect the outcome of the 2012 congressional elections. “Thanks to the Supreme Court and its Citizens United
decision, the
natural gas industry will be free to spend whatever it likes next year to elect a Congress that will do its
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bidding,” Edgar said. “The industry’s political investments already have largely freed it from government oversight .
Controlling the flow of that money and other corporate spending on our elections is critical to protecting our environment for this and future
generations.”
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1AR – Bipartisan Link Turn
Bipartisan support for plan
Washington Independent 11 (“Offshore drilling vote sees bipartisan support in U.S. House,
but not for Florida delegation”, 5/12, http://washingtonindependent.com/109468/offshoredrilling-vote-sees-bipartisan-support-in-u-s-house-but-not-for-florida-delegation)
The U.S. House of Representatives passed the second of its three-part package of bills aimed at
encouraging offshore drilling on Wednesday. # More than two dozen Democrats joined Republicans
in supporting the measure, but the Florida delegation voted strictly along party lines, with Republicans in support and Democrats in
opposition. # Democratic Rep. Ted Deutch of Boca Raton made some noise about a provision that would steer drilling-related court cases – even
those affecting Florida – to the Fifth Judicial Circuit, which has a reputation for being oil-friendly. Deutch offered an amendment to strike that
provision, which failed. # The third piece of the
domestic oil and
pro-drilling package, which sets production targets for
gas production , could pass as early as today. The bills face long odds in the Senate, where oil
executives are getting grilled on industry tax breaks.
More warrantsA) Committee votes
Hastings 12
[Doc, R- Wash, 7/23/12, http://thehill.com/blogs/congress-blog/energy-a-environment/239529-president-obamas-offshore-drilling-plan-must-bereplaced]
the Congressional Replacement of President Obama’s Energy-Restricting and Job-Limiting Offshore Drilling Plan, would
replace President Obama’s plan with an environmentally responsible, robust plan that supports new offshore drilling. This plan passed out of the House Natural Resources
Committee with bipartisan support and will be considered by the full House this week. It sets up a clear choice between
the president’s drill-nowhere-new plan and the Congressional replacement plan to responsibly expand offshore American energy
production. President Obama’s plan doesn’t open one new area for leasing and energy production. The Atlantic Coast, the Pacific Coast and most of the water off Alaska are all placed
H.R. 6082,
off-limits. This is especially frustrating for Virginians who had a lease sale scheduled for 2011, only to have it canceled by President Obama. The president added further insult to injury by not
The president’s plan only offers 15 lease sales limited to the Gulf of
doesn’t open one new area for leasing and energy production. According to the non-
including the Virginia lease sale in his final plan, meaning the earliest it could happen is late 2017.
Mexico and, very late in the plan, small parts of Alaska. It
partisan Congressional Research Service, President Obama’s 15 lease sales represent the lowest number ever included in an offshore leasing plan. President Obama rates worse than even Jimmy
Carter.
B) Obama allies
Wilson 12
[Todd, Daily Press, 9/2/12, http://adamcook2012.com/news/story/daily-press-both-off-shore-drilling-wind-farms-could-be-spoils-o/]
drilling for natural gas and oil off the coast will bring in 1,900 new jobs and provide $19.5
billion in revenue to federal, state and local governments. While Obama has expanded oil and natural gas production domestically, in the wake
of the 2010 BP oil spill in the Gulf of Mexico he has been reluctant to expand off-shore drilling. That has Virginia Democrats
bucking the president on the moratorium against off-shore drilling in Virginia. Democratic Sens. Jim Webb and Mark
Caldwell said latest figures received by the governor's office show that
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Warner have introduced legislation that would allow drilling in Virginia's coastal waters and includes provisions for revenue sharing between the federal and state governments. Senate candidate
and former Gov. Tim Kaine, a close political ally of Obama , and the Democratic challenger in the state's 2nd Congressional District, Paul Hirschbiel, both support
the Webb-Warner plan. Local Republican U.S. Reps. Randy Forbes, Chesapeake, Rob Wittman, Westmoreland, and Scott Rigell, Virginia Beach, are all on board, as is Newport News businessman
Dean Longo, the GOP challenger in the 3rd District. Republican U.S. Senate candidate and former Gov. George Allen says if elected he will sponsor legislation that allows for off-shore drilling with Virginia's share of the revenue
being dedicated to funding the state's transportation infrastructure.
C) GOP Support
Largen 12
[Stephen, Post and Courier, 6/12/12, http://www.postandcourier.com/article/20120612/PC16/120619771/haley-congressional-republicans-pushoffshore-drilling]
leading Republicans said Monday as they launched a renewed push for offshore
drilling. But an environmental group said it’s unclear that there’s sufficient oil and natural gas deposits off the coast to support drilling, and doing so would risk the bread and butter of South Carolina’s economy: tourism.
U.S. Sen. Lindsey Graham and U.S. Rep. Jeff Duncan said Monday that they will introduce companion bills that would open the state’s
coastline for oil and natural gas exploration from 10 to 50 miles offshore. “Let’s get on with it,” Graham said during a news conference with Duncan and
Gov. Nikki Haley. “I’m tired of talking about being energy independent . I’m tired of sending the hardworking people of America’s money overseas to buy oil
All can and should be in the Palmetto State’s future, a trio of some of the state’s
from people who hate our guts.” In 2005, Graham said offshore drilling could harm the coastal economy due to concerns about the impact of drilling on the environment and tourism. And he said offshore drilling represented nothing
more than buying time and not addressing the fundamental problem with fossil fuels. He explained his change of heart Monday by saying that his bill addresses environmental concerns with its requirement that no drilling be allowed
within the 10-mile buffer. South Carolina would also have to clear all exploration within the 10- to 50-mile zone off the coast, he said. Graham’s measure would allocate 37.5 percent of all revenue from any drilling to the state. Fifty
. Graham said his bill also would allow drilling off Virginia’s
coast and has the support of the commonwealth’s two U.S. senators. The S.C. Republicans and several business
groups in attendance Monday highlighted a new report estimating that drilling could bring $87.5 million in annual
revenue to the Palmetto State years down the line.
percent of revenue would be used to pay down the federal debt, and the remaining 12.5 percent would be used to fund conservation efforts
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1AR – Boehner Link Turn
Boehner supports the plan
Geman 12 (“House GOP ready to move on Boehner’s plan to link drilling and infrastructure,”
1-27-12,
http://thehill.com/blogs/e2-wire/e2-wire/207043-house-gop-begins-moving-on-boehnersdrilling-and-infrastructure-plan)
A House panel will likely approve bills next week that form the drilling portion of Speaker
John Boehner’s (R-Ohio) plan to fund infrastructure projects with cash raised through
expanded oil-and-gas development. The bills will provide Republicans a hook for continuing political attacks against White
House energy policies, but are highly unlikely to advance in the Senate or win Obama administration support. The House GOP plan
would open the Arctic National Wildlife Refuge (ANWR) to drilling — a nonstarter for the White House and most Democrats — and
require a vastly greater expansion of offshore oil-and-gas leasing than the administration
supports. The House Natural Resources Committee will meet Wednesday to mark up three
bills. They would open ANWR; require oil-and-gas leasing off the Atlantic and Pacific coasts and remove restrictions in the eastern Gulf of
Mexico; and require commercial leasing for oil shale projects in Western states. “Expanding access to America’s
abundant offshore and onshore energy resources will create millions of new American jobs,
lower energy prices and generate new revenue to help pay for infrastructure improvements. When new energy resources are developed, we’ll
need updated infrastructure to bring it to market. This creates a link that will allow for both American energy jobs and American infrastructure
jobs to be created simultaneously,” said
Wash.) in a statement.
House Natural Resources Committee Chairman Doc Hastings (R-
165