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US oil, gas exports will flow regardless of politics, energy experts say

Although U.S. oil and natural gas exports can have measurable impacts on economic growth and international energy security, American companies will ship their supplies overseas regardless of the geopolitical benefits, a group of energy policy experts told lawmakers.

U.S. oil and gas exports generate attention from Congress and presidential administrations for their influence on geopolitics. Politicians tout U.S. LNG exports as a way to loosen Russia's grip on Europe and say crude exports offer an alternative to supply from countries such as Venezuela and Iran.

The main benefit of sending American oil and gas overseas is that the companies behind those exports are not fueled by political aspirations, a group of researchers told a U.S. House of Representatives subcommittee May 22.

"Unlike the national oil companies of OPEC, the U.S. industry is made up of dozens of companies that make individual investment and production decisions based on profits, not on policy," said Samantha Gross, a fellow focused on energy and climate at the Brookings Institution. "The U.S. supply of price-responsive, nonpolitical oil and gas contributes to well-functioning global energy markets and reduces the influence of those who want to use their oil and gas supply towards political ends."

The U.S. House of Representatives Subcommittee on Terrorism, Nonproliferation and Trade held a hearing May 22 to discuss the geopolitical impacts of growing U.S. oil and gas exports, which have surged following the lifting of a crude oil export ban in 2015 and the emergence of the LNG export industry in 2016.

"For decades, many of the planet's great energy producers have been despotic regimes who leveraged their oil wealth to oppress their own people or pursue nefarious foreign policies," Rep. Ted Poe, R-Texas, who chairs the subcommittee, said in a statement announcing the hearing. "But as the U.S. has developed innovative new ways to extract oil and gas resources where they were previously unreachable, we now have the power to greatly minimize the influence of states like Russia, Iran and Venezuela over the international energy market."

U.S. LNG has been credited with a reduction in prices for Russian gas supply to Lithuania, but American energy has not "fundamentally changed" the Europe-Russia relationship, Sarah Ladislaw, director and senior fellow of the energy and national security program at the Center for Strategic and International Studies, said during the hearing. The same applies in the Middle East, where Ladislaw said the U.S. is "no freer from entanglements" now than before the American oil and gas boom.

"Energy and foreign policy are often inextricably intertwined, but the ability for policymakers to use energy resources as a tool for targeted foreign policy leverage, or even energy dominance, is misguided," Ladislaw said.

Instead, where U.S. oil and gas exports end up is driven by simple economics, said Ken Medlock, senior director of the center for energy studies at Rice University's Baker Institute for Public Policy. "At the end of the day, it's really about moving product from a low price to a high price."