Jonathan Elkind's Slides

On June 28, 2017, the Carnegie Moscow Center hosted a discussion on the changing global energy market at a time of abundant supply and high policy uncertainty, particularly in regards to American energy politics under the Trump administration. Present at the discussion was Jonathan Elkind, a fellow and adjunct senior research scholar at the Center on Global Energy Policy at Columbia University, and former Assistant Secretary for International Affairs at the U.S. Department of Energy.

In an overview of the development of the American oil sector, Mr. Elkind emphasized the significant reduction in costs of production witnessed over the last decade, as well as the growth in economically extractable resources across the U.S. However, as a result of the drop in oil prices over the past few years, U.S. production has steadily decreased. In the context of these trends, Mr. Elkind called to attention the heavily debated notion of a peak demand for oil - the theory whereby increasing moves to control greenhouse gas emissions across the globe will push demand for oil downwards. While these trends will certainly play a role in the evolution of the global energy market, Mr. Elkind underlined the importance of other sources of demand — namely the likelihood of increased demand for oil in the maritime industry, aviation, heavy-freight transport, and petrochemicals. In addition, the expected increase in demand for oil among developing countries could potentially offset the effects of tighter control over greenhouse gas emissions.

Following an analysis of the growing share of natural gas in the American power source and the growing volume and complexity of global LNG trade, Mr. Elkind raised the question of the possible existence of an oversupply of LNG in the global market. While the answer to this question remains heavily debated, Mr. Elkind presented evidence of a projected increase in the share of LNG in total natural gas trade by 2040, as well as the projected doubling of total traded gas within that time frame. Such estimates would suggest the gradual convergence of prices for gas across the North American, European, and East Asian gas markets.

In addition to these trends in the global oil and gas markets, the Trump administration has brought a significant degree of unpredictability in relation to U.S. energy politics. In the context of president Trump’s “America First” principle, the White House called for the reduction in costs of energy for American consumers, the reliance on U.S.-produced energy, the revival of the coal industry, the reduction in burdensome regulations, as well as the reversal of previous policies conducted under the Obama administration, including the Paris Climate Agreement. However, Mr. Elkind pointed out that many of these policies would encounter significant obstacles in their implementation — either as a result of laborious legal and analytical proceedings, or as a result of opposition from Democrats and Republicans.

Concluding the discussion, Mr. Elkind answered questions pertaining to the effects of the Gulf crisis on the energy market, free-trade and non-free trade agreements with the U.S., cost reductions in the renewable energy sector, as well as the development of energy trade between Russia and Asia.

Jonathan Elkind

Jonathan Elkind is a fellow and adjunct senior research scholar at the Center on Global Energy Policy at Columbia University, and former Assistant Secretary for International Affairs at the U.S. Department of Energy.

Andrey Movchan

Andrey Movchan is a senior associate and director of the Economic Policy Program at the Carnegie Moscow Center.