Tags: Trump Administration | kudlow | russia | energy | dominance

Kudlow: US Must Challenge Russia on Energy Dominance


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By    |   Monday, 08 October 2018 04:21 PM

National Economic Council Director Larry Kudlow contends that the United States must challenge Russia on its intention to be a global energy provider. 

“We are the dominant energy power. We will be producing 15 million barrels of oil per day in a couple of years. We’re passing the Saudis. We’re passing Russia," the veteran financial guru and former Ronald Reagan adviser told Hill.TV in an interview aired Monday.

"We have so much natural gas coming out of the Permian Basin, they don’t know what to do with it. They’re flaring it. They can’t use it," said Kudlow, who served as the Trump campaign's senior economic adviser.

"So what does that mean? Means we have to have infrastructure for pipelines, east, west, west, east. Get this stuff to the northeast, get this stuff to Europe and challenge Russia’s hegemony on nat gas and LNG [liquified natural gas]," said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.

"This is doable. We have to really focus on the energy sector. Most of this stuff can be done privately," said Kudlow.

To be sure, Russia and Saudi Arabia struck a private deal in September to raise oil output to cool rising prices and informed the United States before a meeting in Algiers with other producers, four sources familiar with the plan told Reuters.

U.S. President Donald Trump has blamed the Organization of the Petroleum Exporting Countries (OPEC) for high crude prices and called on it to boost output to bring down fuel costs before the U.S. congressional elections on Nov. 6.

The deal underlines how Russia and Saudi Arabia are increasingly deciding oil output policies bilaterally, before consulting with the rest of OPEC.

The sources said Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak agreed during a series of meetings to lift output from September through December as crude headed towards $80 a barrel. 

"The Russians and the Saudis agreed to add barrels to the market quietly with a view not to look like they are acting on Trump's order to pump more," one source said.

"The Saudi minister told (U.S. Energy Secretary Rick) Perry that Saudi Arabia will raise output if its customers asked for more oil," another source said.

Originally, the two countries had hoped to announce an overall increase of 500,000 barrels per day (bpd) from Saudi-led OPEC and non-OPEC Russia at a gathering of oil ministers in Algiers at the end of September.

But with opposition from some in OPEC, including Iran which is subject to U.S. sanctions, they decided to defer any formal decision until a full OPEC meeting in December.

In a separate interview, Kudlow said Democrats should support the new United States-Mexico-Canada Agreement (USMCA) if they really wanted to help workers.

Last week, the United States and Canada forged the last-gasp deal to salvage NAFTA as a trilateral pact with Mexico, rescuing a three-country, $1.2 trillion open-trade zone that had been about to collapse after nearly a quarter century, Reuters explained.

In a big victory for his agenda to shake-up an era of global free trade that many associate with the signing of NAFTA in 1994, President Donald Trump coerced Canada and Mexico to accept more restrictive commerce with their main export partner.

Trump’s primary objective in reworking NAFTA was to bring down U.S. trade deficits, a goal he has also pursued with China, by imposing hundreds of billions of dollars in tariffs on imported goods from the Asian giant.

While the new USMCA deal avoids tariffs, it will make it harder for global auto makers to build cars cheaply in Mexico and is aimed at bringing more jobs into the United States.

"If Democrats really are in favor of helping the working folks, they will sign on to this new deal for U.S., Mexico, and Canada. They will sign on. This is a good deal. Everybody's good with it. Cooperation," Kudlow told Hill.TV's Ned Ryun on Friday.

"We have a lot of openings on intellectual property rights. We have a lot of openings on financial services. Everybody's going to benefit. So this is a very positive, pro-growth deal," he said.

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National Economic Council Director Larry Kudlow contends that the United States must challenge Russia on its intention to be a global energy provider. 
kudlow, russia, energy, dominance
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2018-21-08
Monday, 08 October 2018 04:21 PM
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