Barack Obama has won a second four-year term as President of the United States. This victory will permit Obama to preside without any concern for re-election. Additionally, the U.S. is no longer in the middle of a deep financial crisis, as was the case in the 2008 elections. Now, being much more stabilized in many ways, the U.S. represents an era quite different for Obama to govern than 2008.
In this new period, there are many fields in world politics for the United States to be influential . The Middle East and Asia Pacific entered a politically sensitive period. The termination of the unremitting financial crisis and in terms of international security the nuclear programs and missile defenses consist of some of these fields.
The steps taken recently in the field of energy will directly affect the coming political and economic balance. Looking at the Obama’s presidential campaign speeches, the energy along with the education sector seems to be one of the two strategic areas through which U.S. leadership in the international arena can be maintained. Keynesian policies are carried out in this respect, and the importance of these two sectors in terms of generating new business opportunities is often voiced by Obama.
Keynesian policies in the United States
Looking at Obama’s past four years, the U.S. economy during the crisis provided a soft landing with state control. In particular, the using of rescue packages launched by the Bush administration was continued, and Obama avoided a large wave of unemployment by preventing failing firms from collapsing through government intervention. Still, it must be said that Obama’s current economic performance, which has maintained the 8% unemployment rate, hardly seems to be satisfactory for the vast majority of the American public.
In this new period, the U.S. retreat from Afghanistan and Iraq will provide extra resources for Obama’s administration to create new business opportunities. For this, Obama may revise infrastructure and sectors that concern major public utilities such as railways, roads and bridges. Considering the situation of the eastern side of the country after Hurricane Sandy, such policies are needed at the moment. Some criticism has been directed toward the current amount of infrastructure investment, with the more cynical labeling the status of the current structures as almost Jeffersonian or obsolete.
In Obama’s Keynesian plans, education reform has been turned into a key issue. Although rival Mitt Romney said that the United States has the best education scores, Obama’s goal is to reform the education sector. In this context, the development of the dialogue between industry and academia constitutes an important pillar of the U.S. economy, and innovation-oriented research and projects are now the biggest desire of the new president. Obama’s fundamental objective for the next four years is to hire 100,000 mathematics and science teachers.
Unconventional methods in energy policies
In terms of energy policies, Obama is trying to create a two-pillar policy. The first is to encourage the development of new energy technologies in the country and the second is to turn to local resources.
In this respect, the development model based on innovation strategies is directly related to energy policies. Particularly, it is intended to reduce the dependence on foreign countries for renewable energy technologies and to improve energy efficiency. With regard to the developments in recent years, since the Bush period, significant progress has been noticed.
Progress has been made in the gradual reduction of oil consumption in the United States. Accordingly, in 2005, the peak consumption of 20.8 million barrels of oil per day before the financial crisis started to decline in 2008, and in 2011, this figure had fallen to 18.8 million barrels. The second area of progress concerns the use of the reserves available in the country. Parallel to this, a significant decline in imports has been recorded. In 2005, the U.S. net import of 12.5 million barrels per day (bpd) fell to 8.5 million barrels in 2011.
From this data, a decrease in consumption is related to these different sources and a decrease in imports is associated with the convergence of the United States with non-conventional oil and gas reserves. In this respect, the development of new fracturing technologies and horizontal drilling generates the utilization of American resources more efficiently. With the production of 100,000 bpd of non-conventional oil, in 2012 the U.S. developed its capacity to up to 2 million barrels per day.
A similar scenario applies to shale gas. The U.S. gas consumption represented 21% of the global gasoline consumption in 2011. In the early 2000s, the United States was expecting to become, for the coming period, a net importer of natural gas. But, the shale gas production could turn the U.S. from a gas importer into a net exporter of gas in the next decade. Between this, the production of conventional gas at the same time makes it necessary to reconsider as well some of the predictions concerning global energy balances.
In the 2000s, the shale gas production amounted to only about 2 percent of the United States’ production. Today, with the production of 1.8bcm natural gas, it rises to 37 percent. Obama is quite enthusiastic about the further development of this sector. Thus, aiming to recruit 600,000 employees in this sector, Obama is evaluating at the same time the new global balance of natural gas.
In terms of national interests, Obama wants to expand the production of oil in the Arctic and Gulf of Mexico’s resources for domestic consumption. In this respect, he aims to effectuate new energy policies which focus on energy self-sufficiency. Indicating that the target is to reduce dependence on Venezuela and the Middle East for oil, President Obama wants also, in his second term, to resolve the prolonged economic crisis in the U.S.
The next steps taken by the United States will not affect only the American continent. The regression in the exports of a country which alone accounts for one-fifth of the globe’s total consumption indicates an era necessitating a reconsideration of expectations regarding demand, while it also signals again that national resources can be steered with consideration for energy security. In this respect, countries like Turkey, which seems to be rich in non-conventional oil and natural gas reserves, are encouraged to sustain more active energy policies. However, it is difficult to predict in advance if these coming policies will affect the oil and gas market. The ambiguities concerning Iran and Syria and rising suspicions concerning the nuclear issue in particular still keep the matter of energy at a complex and critical level.
(The Journal of Turkish Weekly)