I’ve written several times in this column about my experiences on 9/11, that fateful September day in 2001, as I was beginning my time on Capitol Hill.
I had the good fortune of working as the American Geosciences Institute Congressional Science Fellow for Rep. J.C. Watts, Jr., who represented Oklahoma’s 4th Congressional District and served as chair of the House Republican Conference. Watts also served on the House Armed Services Committee and had several military bases in his district, foremost among them Fort Sill, home to much of the U.S. Army’s artillery program.
In 2002, as the U.S. military moved into Afghanistan and Iraq in the aftermath of 9/11, the soldiers engaged in a different type of combat than they had prepared for during the Cold War. And one of the defense modernization programs that was designated for Fort Sill – the XM2001 Crusader artillery program – was put on the chopping block.
This was bad for our district and, in some opinions, the U.S. Army, and so our office pushed back, asking the Pentagon to reconsider and congressional appropriators to continue funding the program. Ultimately our efforts failed, and the Crusader’s funding was cut from the defense budget.
As the New York Times reported, a senior military official observed about Crusader, “It’s a wonderful system – for a legacy world.”
“There is no need for weapons designed to fight on the steppes of Ukraine,” is how I recall others characterizing that legacy, that world we’d left behind.
A Rude Awakening
My mind has repeatedly drifted back to those comments in the past month, as we watched the Russian invasion of Ukraine, a sovereign nation, amid tremendous suffering and grievous loss of human life.
In an instant, the balance of power that had defined central and western Europe since the fall of the Berlin Wall was shattered. Shocked and surprised nations opened their borders to refugees bundled in winter coats, carrying a few personal belongings and perhaps a dog or cat, who were streaming across Ukraine’s frontier to escape chaos and violence.
“This marks the end of an era that began three decades ago with the collapse of the Soviet Union,” wrote Dan Yergin in the March 19 edition of The Economist. “In the years afterward, for the first time since the Bolshevik revolution, the Russian oil industry rebounded and largely integrated with the global industry. Today Russia is one of the top three oil producers (after America and roughly equal with Saudi Arabia) and is also the world’s largest natural-gas exporter and second largest producer, again after America.”
And this reality – Russia’s prominence as an energy supplier – shifted the topic of energy security firmly into the spotlight, both in Europe and across the globe.
“Available, reliable and affordable” is how I characterize energy security. And building resilient systems based on diverse sources of supply is an essential part of delivering on that promise. As petroleum geoscientists, we are in the energy security business.
But in an era of capital constraints, transportation limits, little available spare capacity and inflation ticking upward, the energy markets were already tight. Couple that with a disaster like this, and the situation is grim.
Saudi Aramco’s CEO Amin Nasser has been sounding the alarm for months of the impact of chronic underinvestment in E&P projects coupled with false narratives about the energy transition. In January, I quoted his comments at the World Petroleum Congress held the previous month:
“Energy security, economic development and affordability imperatives are clearly not receiving enough attention,” he warned. “Until they are, and unless the glaring gaps in the transition strategy are fixed, the chaos will only intensify. So, the urgent new quest for our industry is to chart a course that will continue to realistically meet the world’s rising energy needs – reliably, affordably and sustainably.”
Speaking at CERAWeek last month, Oxy CEO Vicki Hollub told Yergin that increasing production is difficult because if producers hadn’t planned for growth in 2022 – and nobody had – today’s supply chain issues and availability of a qualified workforce were making it difficult to ramp up activity.
Rystad Energy in a March 2 Energy Impact Report did see the potential for U.S. oil production to grow but acknowledged that the logistical challenges were real and warned that it could come at the expense of “ruining the domestic gas market” by swamping the market with associated gas that has nowhere to go. LNG facilities are maxed out, both in terms of U.S. export capacity, but also the ability to deliver and offload in Europe.
Ryan Lance, CEO of ConocoPhillips, stated at CERAWeek that every country on Earth is focused on national security, energy security and environmental quality. He saw potential for production growth but recognized that the cost of doing business was going up and that companies need to focus on delivering returns on investment.
“Western governments, having rediscovered the concept of energy security, are scouring the world for additional supplies … they should be working much more closely with oil and gas companies to understand the changing logistics,” Yergin wrote in The Economist. “To facilitate collaboration, they would do well to put aside the customary populist language about market manipulation usually invoked when prices go up.”
Never let a crisis go to waste, goes the old saw. At CERAWeek, special envoy Sec. John Kerry acknowledged that the current situation was going to have an impact on the administration’s climate objectives.
Applause punctuated Energy Secretary Jennifer Granholm’s statement for the need for a comprehensive government-wide review of federal land leasing policy, which she promptly followed with, “Do you know how long it takes to lease a geothermal project today?”
Leadership, and Peace
In a crisis, the temptation for policymakers is to make a grab for the brass ring. It’s rarely the appropriate response. Instead, as Ryan Lance put it at CERAWeek, “We need medium and long-term planning.” We need leadership.
In the aftermath of 9/11, the global community drew together. The same is happening today, as we seek an end to the violence and destruction in Ukraine.
I am reading stories of selfless acts and leadership from the people of Ukraine and its neighbors, including from AAPG members, and hope we can share some of these stories with you in the future. Meanwhile, we pray for peace.