Mapping The Escher-like Landscape Of United States Fossil Fuel Sanctions
Dynamics of United States Manipulation of Fossil Fuel Supply & Prices Since 2009: How Oil & Natural Gas Fracking Became A Powerful US Lever For Global Control
The Role Of Fracking In US Oil Production
On the surface, the dynamics of US sanctions and other US manipulations of both the supply and price of oil and natural gas, may seem self contradictory.
Misperceptions arise when observers make the key mistaken assumption that manipulation of oil and natural gas supply, and connected fossil fuel prices, is for the simple, cynical purpose of the US profiting from its own domestic oil and gas production - production which is now largely (and strangely) derived from prohibitively expensive fracking (hydraulic fracturing) and other coal/oil shale and tar sands extraction.
Here are charts showing that by 2015, near the exit of the Obama administration, fracking had become the primary source of US fossil fuel production. (During his presidency, Barack Obama expanded US fossil fuel production more than any other president in US history, before or since.)
It's Not About the Profit
A closer look at the economics of US fracking policy shows that mere profit is not the objective. Fracking, shale, and tar sands fossil fuel extraction do not make money, they lose money. The cost of extracting these exotic resources (both in dollars and in energy input) exceeds the dollar revenue and the energy output from selling and using them. Here (below the photo) is the link to a Keiser Report exposé on the economics of fracking which shows that fracking is based on unsustainable debt funding (backed by US bailouts of bankrupt fracking operations).
Keiser Report: Frackers Scrounging for More Debt
http://kazan2024-en.rt.com/shows/keiser-report/464439-frackers-debt-companies-production
Why Fracking & Sanctions?
So if US fossil fuel policies do not hinge on profit making, then what are they designed for? For example, shortly after declaring its 2022 sanctions against Russian oil and natural gas production (seemingly to both punish Russia for its Ukraine intervention and make US fracked gas and oil dominant in the market) why did the US almost immediately scramble to make a deal with President Nicolas Maduro to increase Venezuelan oil output? After all, the US had been exacting similar draconian fossil fuel sanctions on Venezuela for years. Why the sudden turn about?
Maintaining Global Hegemony, By Controlling Fossil Fuels & Their Prices
The answer boils down to Obama administration manipulations to economically undermine the fossil fuel profits of both Russia and Venezuela, and in doing so, to torpedo their efforts to help end the US domination of global geopolitics.
The game is global power and economic dynamics. The Obama administration saw early on, that Venezuela was leading a South America-wide rejection of historical US control over that continent. Since the 1998 election of Hugo Chávez as its president, Venezuela had been directly using its oil wealth to support resistance in multiple countries that were rising up against the US.
Obama also saw that Russia, China, Iran, India, South Africa, Brazil, Syria, Libya, and others, were coordinating to challenge the US globally, making moves to escape the worldwide US petro-dollar currency system, and replace it with a new global system of exchange that is free of US domination. At the same time Russia and China were building new pipelines to work around US control of oil and natural gas transport. And China was concurrently developing new trade relations and trade transit routes with other nations all over the world to undermine legacy US colonial domination of global economic exchange.
(These powerful multinational efforts continue to this day, portend an end to the global US empire, are key triggers of US proxy conflicts with Russia in former USSR republics like Ukraine, Georgia, and Kazakhstan, and are a motivation for the US escalation of China regime change manipulations in Hong Kong, Taiwan, Xinjiang, Tibet, etc.)
See multiple reference links below laying out these strategies to work around global US dominance, and covering other geopolitical dynamics noted in this essay.
The World Lever of Fracking
Archimedes once stated confidently "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world."
The Obama administration discovered its world-moving lever, in the technology of fracking.
Because of the impending global power dynamics noted above, the Obama administration, under the leadership of Secretary of State Hillary Clinton, massively subsidized North American oil and natural gas fracking, and tar sands oil extraction. (As noted above, all of these mining and drilling methods inherently lose money and so don't make economic sense without subsidies and periodic economic bailouts.)
Secretary of State Clinton eventually expanded fracking far beyond the boundaries of North America to create the incredibly destructive, and climate threatening, global fracking industry that we know today. And she established the US as that industry's leading bull.
Undermining Russia & Venezuela
The US then used its fracking dominance to flood global fossil fuel markets with fracked natural gas and oil, and this triggered the prices of gas and oil to plummet so low that both the Russian economy, and especially the Venezuelan economy, went into downward tailspins. In turn, this pulled the rug out from under the aforementioned efforts of Russia and Venezuela to challenge the US on the global stage.
With this historical context in mind, the many US wars, proxy wars, and coup operations in areas key to fossil fuel production, control, and pipeline transport, are no surprise. Pretzel-like US fossil fuel sanction regimes come into focus, and make a lot more sense. The US is carefully balancing the results of its pulls, on the world lever.
The Ukraine, Russia, Venezuela Sanctions Merry-Go-Round
This returns us to examine full circle, the almost comical US sanction acrobatics around Ukraine, Russia and Venezuela. Ironically, sanctions on Russian fossil fuel production dramatically raise global oil and natural gas prices by shrinking supply. Such price rises of course benefit Russia and Venezuela (who can then find higher paying alternative customers in ally nations like China and India). This in turn enables Russia and Venezuela to spend their newly increased oil and gas wealth to again ramp up their active opposition to US world dominance - a perfect Catch 22 quandary for the US.
On top of this, if oil and natural gas prices rise up too precipitously, it results in skyrocketing fuel price inflation at home that will deeply harm the neoliberal West's own economies.
The US Goes Begging
So, seeking to avoid all of these bad outcomes, in early March 2022, right after announcing sanctions to block Russian fossil fuel sales, the US almost immediately fell into begging Venezuela and Saudi Arabia to increase their fossil fuel outputs in order to stabilize global oil prices at lower levels. But unfortunately for the US, thus far Venezuela and Saudi Arabia have refused.
It's all just another day in the life of an empire, that Escher and Archimedes could only have imagined in their dreams.
References
Forbes: Graph showing dramatic increase of US oil production under Barack Obama
Fossil Fuel Industry Subsidized at Rate of $11 Million per Minute
https://projectcensored.org/1-fossil-fuel-industry-subsidized-at-rate-of-11-million-per-minute
Venezuela's Oil Wealth and Social Transformation ~ Dario Azzellini
http://www.azzellini.net/en/buchbeitraege/venezuelas-oil-wealth-and-social-transformation
21st Century South/Central/Caribbean American Coordination vs US Empire - Bolivarianism vs Monroism https://venezuelanalysis.com/images/15485
BRICS (Brazil, Russia, India, China and South Africa) New Development Bank Threatens Hegemony Of U.S. Dollar (Forbes, 2014)
https://forbes.com/sites/realspin/2014/12/22/brics-new-development-bank-threatens-hegemony-of-u-s-dollar/?sh=701318977f89
Russia-led Eurasia Economic Union & China agree to financial & monetary system to bypass dollar transactions (Pepe Escobar, 2022)
https://new.thecradle.co/articles/say-hello-to-russian-gold-and-chinese-petroyuan
Russian oil exports to India surge as Europe shuns cargoes: Delhi maintains close trading ties with Moscow despite western sanctions
https://ft.com/content/5efc6338-3f01-4015-aedf-53a4a1944ca8
Friends in Need: Geopolitics of China-Russia Energy Relations ~ Felix K. Chang (Includes descriptions of new pipeline routes.)
https://fpri.org/article/2014/05/friends-in-need-geopolitics-of-china-russia-energy-relations
Iran-Pakistan Pipeline: The “Peace Pipeline”
https://www.gem.wiki/Iran-Pakistan_Pipeline
Chatham House: What is China’s Belt and Road Initiative (BRI)?
https://chathamhouse.org/2021/09/what-chinas-belt-and-road-initiative-bri
National Geographic (Fracking): How Hydraulic Fracturing Works
https://education.nationalgeographic.org/resource/how-hydraulic-fracturing-works
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Eric Brooks is a full time grassroots organizer specializing in the interplay of global capitalist economics and war, with energy policy, the climate and extinction crisis, and environmental justice.
This is really good/interesting/helpful. I'm working on the "methane" section of my overall project and trying to get into this story of how fracking generated all this American natural gas that had no market, and so they had to liquefy natural gas, but there was no market for LNG because it's more expensive than regular gas and Russia could sell to Europe and Asia via pipelines... And so we go to war with Russia... this makes intuitive sense to me as a textbook case of petropolytics. But unlike the other sections of my project where I can draw on excellent journalistic sources, I'm having to do my own digging around gas and LNG. I'm looking on the boards of directors of frack companies like Chesapeake and LNG companies like Cheniere looking for Russia hawks.